ISLAMABAD: The Asian Development Bank (ADB) and the OPEC Fund for International Development (OFID) have signed a risk distribution agreement to support trade in emerging Asian countries, including Pakistan, under the ADB’s Trade Finance Program (TFP).
The agreement will support an estimated incremental trade flow of between $800 million and $1.2 billion in countries such as Bangladesh, Mongolia, Pakistan, Sri Lanka and Uzbekistan, and other markets where financing from private financial institutions is limited.
“By supporting trade transactions in emerging Asia, OFID and ADB will help create economic growth and jobs,” said Philip Erquiaga, ADB’s director general for the Private Sector Operations Department. According to an ADB press statement received here on Thursday, the ADB’s Trade Finance Program fills private sector market gaps in trade finance by providing guarantees and loans through over 200 partner banks to support trade.
The TFP supports hundreds of small and medium-sized enterprises in developing Asia and is expected to record approximately $4 billion in annual turnover this year through more than 2,000 transactions. The TFP operates in 18 developing markets and the program is currently targeting expansion to Myanmar, Papua New Guinea, Fiji, Vanuatu, and Timor Leste next year.
“This new partnership provides an opportunity to strengthen OFID and ADB’s longstanding cooperation,” said Tareq Alnassar, OFID’s acting head of the Private Sector and Trade Finance Operations Department.
He added that OFID was happy to team up with a like-minded institution to increase the availability of trade finance for developing Asian nations.
Published in The Express Tribune, November 9th, 2012.
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