Global Trade & Supply Chain Solutions 2014 Product Guide

Best Trade Best Development Climate Smart Finance Program Finance Trade Program Institution

Global Trade Global Trade Supplier Finance Finance Program Program

Structured Trade Commodity Finance

Renminbi Trade Asset Financing

Trade & Supply Chain Value Proposition

Our solutions provide essential working capital to emerging market firms, propelling goods through the economic value chain. MARKET NEEDS

Inputs, Harvest

OUR SOLUTIONS

Pre- and Post-Harvest Import Financing

Storage, Transportation

Raw Materials, Labor, Energy

Inventory and Working Capital and Warehouse Supply Chain Receipts Financing Financing

Export

Pre-Export Financing

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Trade & Supply Chain Products

Transactional trade  Global Trade Finance Program (GTFP)  Medium-Term Global Trade Finance Program

Trade portfolio and systemic solutions  Global Trade Liquidity Program (GTLP)  Critical Commodities Finance Program (CCFP)  Working Capital Systemic Solutions (WCSS)

Supply chain finance  Structured trade commodity finance  Global Warehouse Finance Program (GWFP)  Global Trade Supplier Finance (GTSF)  Distributor finance

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8 April 2014

Global Trade Finance Program (GTFP)

Launched in 2005, the $5 billion GTFP provides risk mitigation by guaranteeing trade-related payment obligations of over 275 eligible financial institutions in emerging markets. PROGRAM FEATURES

 AAA-rated – Basel III benefits  Coverage up to 100 percent  Umbrella guarantee covers country and commercial risk  Same-day issuance  Three-year maximum tenor  L/C applicants must be majority private sector

Cumulative Program Statistics Since 2005 (as of March 31, 2014)

Total # / USD of Gtees

18,377 / $30.5B

No. of Issuing Banks

278 in 96 countries

No. of Confirming Banks

259 in 105 countries (1,200 with affiliates)

TOTAL CLAIMS

ZERO

FY14 GUARANTEES BY REGION

(year-to-date; most active countries listed) Sub-Saharan Africa

Middle East & North Africa 1. Lebanon 2. Pakistan

Europe & Central Asia 1. Turkey 2. Russia

Asia & Pacific 1. Vietnam 2. Bangladesh

15%

25%

1. Nigeria 2. Ghana

19% 21% 20%

Latin America & the Caribbean 1. Brazil 2. Honduras

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Medium-Term Global Trade Finance Program (GTFP)

NEW FOR 2014 — Approved by the IFC Board in January, the $500 million Medium-Term GTFP provides risk mitigation by guaranteeing medium-term (three- to five-year) trade-related payment obligations of selected existing GTFP issuing banks. The program is set to launch in May with its first cohort of issuing banks. PROGRAM FEATURES

AAA-rated – Basel III benefits Coverage up to 100 percent Umbrella guarantee covers country and commercial risk Same-day issuance Five-year maximum tenor L/C applicants must be majority private sector

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Trade Portfolio Solutions (GTLP & CCFP) Funded and unfunded risk-sharing facilities in trade portfolios by IFC and program partners (governments, DFIs, or private insurance companies) aimed at increasing trade finance in developing countries GTLP: Global Trade Liquidity Program (launched 2009, renewed 2012) CCFP: Critical Commodities Finance Program (launched 2012) Benefits to Bank: • Risk mitigation: IFC’s AAA rating, effective in managing the effects of Basel II & III • Capacity enhancement: relieves headroom, single-client, countryexposure constraints • Ease of administration: deal only with IFC, as agent • Large facilities: sizeable solutions permit effective trade portfolio risk management

Structure: • IFC provides funding or guarantees as agent and primary guarantor, with counter-guarantees from program partners • Two-year program with one-year extension • Pricing: market-based pro-rata sharing Focus Areas: • Global: emphasis on Africa and lowincome countries • Sectors: Agriculture, energy

Program partners Program partners co-finance with funding or counter-guarantees

IFC channels funding or guarantees for up to 50% on portfolio of trade transactions

Originating bank Originating bank retains 50% of the aggregate amount of portfolio of trade transactions

Emerging market corporates (CCFP only) and banks (GTLP and CCFP)

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Working Capital Systemic Solutions (WCSS)

Under our Working Capital Systemic Solutions, we issue shortterm loans to emerging market banks to inject USD liquidity in markets where macro events have led to a USD liquidity squeeze. Benefits to Bank: • Foreign exchange: fills void left by international commercial banks in the FX market due to concerns over regulatory uncertainty and/or sovereign risk • Risk mitigation: IFC’s AAA rating, effective in managing the effects of Basel II & III • Ease of administration: deal only with IFC, as agent

Structure: • IFC provides funding as agent with co-financing from program partners • One-year traditional “A” loan with potential to be renewed twice for total of three years • Pricing: 6-month Libor + spread Focus Areas: • Global: low-income countries where macro factors create USD constraints • Sectors: SMEs, including exportoriented enterprises, in need of trade finance and working capital

Program partners Program partners co-finance alongside IFC

IFC extends loan to one or more local banks

Local bank #1

Local bank #2

Local banks extend USD financing to their SME clients to support their working capital needs Emerging market SMEs

Emerging market SMEs

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Structured Trade Commodity Finance (STCF)

Funding for commodity players and risk mitigation for partner banks • Supports large cross-border commodity trade using collateral management to support lending at all stages of the supply chain: exporter/producers, trading companies, importer/processors • Emphasis on strategic commodities, such as energy, soft commodities, and agricultural inputs • IFC risk-shares by lending in parallel with Bank on underlying assets or by providing credit guarantee • Bank should have solid track record in managing the transaction flow and can act as the security agent • Environment & social requirements to be met by facility

Products supplied

Exporters

L/C extinguishes

Issuing bank

60-90 days L/C

Approved facility

Products sold Import/sale

Retailers

L/C request

Payment from distributors to exporters [60-90 days credit]

Payment from retailers to importers [15-21 days credit] Facility structure

share risk with bank on importers ’ obligations

Payment flow Product flow L/C flow

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Global Warehouse Finance Program (GWFP)

Risk mitigation for banks’ food/agriculture portfolio • Supports banks when lending to the agricultural sector against warehoused commodities • Banks can support increased use of Warehouse Receipts or CMA by trading companies or producers • Prequalified sub-borrowers • Funded or unfunded: 50-50 risk sharing

Program partners

Bank

2. Warehouse receipts issued by warehouse

4. WHR facility

• Facility tenor: one year extendable up to three years • Average transaction tenor: 4-6 months

Program partners cofinance with funding or counter-guarantees

3. IFC channels funding or guarantees for up to 50% on portfolio of warehouse receipts

Agricultural producers

1. Grain/produce stored in third-party warehouse

Storage company

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Global Trade Supplier Finance (GTSF)

Funding and risk mitigation for banks’ supply chain finance clientele • Provides banks with additional credit capacity to support clients’ suppliers from higherrisk countries • Provides funded and unfunded risk-sharing of up to 100% of a client’s accounts receivable • IFC may also provide liquidity and discount A/R itself • A/R is discounted using marketbased pricing • IFC accepts bank proposed discount rate on risk-shared receivables

Buyer

1. Buyer uploads invoices (automated process)

SCF platform

3. Financier accepts early payment requests

6. Buyer pays full invoice amount on due date (automated transfers established)

2. Supplier views invoices and requests early payment of approved invoices

Emerging market suppliers

5. Financier pays discounted invoice amount

Bank 4. IFC provides funding or guarantee coverage

Mobilization

Program partners

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Distributor Finance

Financing corporates’ emerging-market distribution chains Benefits to Bank: •

Risk-mitigation: portfolio management tool

•

Strengthening business line with global corporate clients

•

Capacity expansion in distributor finance business

Focus: food, agribusiness, health, energy efficiency, infrastructure, and pharmaceuticals SELLER provides some contractual support: first loss or counterguarantee, stop shipment clause, etc.

Bank

Seller (anchor)

IFC ROLE • Funded or unfunded risk-sharing facilities and partial guarantees • Capacity building: IFC’s Advisory Services, including SME Management Services, can engage to improve financial sustainability of distributors BANK ROLE Origination and monitoring in: • Receivables-based financing to seller • Overdrafts or loans to distributors/sub-distributors • Floor-planning and equipment financing, including enduser financing

Distributor

in emerging market

Sub-distributor in emerging market

End customer

in emerging market

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Trade and Supply Chain Contacts

MANAGEMENT TEAM

GEORGINA BAKER Global Head Washington, USA +1 202 473 3175 [email protected]

SCOTT STEVENSON Senior Manager, GTFP & Trade Advisory Istanbul, Turkey +90 212 385 2573 [email protected]

SABRINA BORLINI Global Manager, Business Development Washington, USA +1 202 458 4115 [email protected]

HYUNG AHN Global Manager, Trade Products Washington, USA +1 202 458 9288 [email protected]

TRADE PRODUCTS

TRANSACTION OPERATIONS

SUPPLIER FINANCE (GTSF)

STRUCTURED FINANCE (STCF)

PORTFOLIO SOLUTIONS (GTLP & CCFP)

NEVIN TURK Product Lead Washington, USA +1 202 458 8069 [email protected]

YASMIN SAADAT Product Lead Washington, USA +1 202 473 6391 [email protected]

INHO LEE Product Lead Washington, USA +1 202 458 2709 [email protected]

JUMANA POONAWALA Investment Officer Washington, USA +1 202 473 5145 [email protected]

OLIVIER BUYOYA Senior Trade Fin. Officer Johannesburg, S. Africa +27 11 731 3025 [email protected]

FANG CHEN Senior Investment Officer Washington, USA +1 202 473 0720 [email protected]

GREGORY LORNE Investment Officer Washington, USA +1 202 458 5424 [email protected]

MOBILIZATION

WAREHOUSE FINANCE (GWFP)

MAKIKO TOYODA Product Lead Washington, USA +1 202 458 0142 [email protected] SYSTEMIC SOLUTIONS (WCSS)

JUAN ANDRES MOSQUERA Investment Officer Washington, USA +1 202 458 5152 [email protected]

LILI WANG Associate Financial Officer Washington, USA +1 202 458 9626 [email protected]

BILGE OZISIK Global Lead, Transaction Operations Istanbul, Turkey +90 212 385 2542 [email protected]

DHARMENDRA DEEPAK Assoc. Trade Finance Officer Washington, USA +1 202 473 8817 [email protected] ZEYNEP ERSEL Trade Finance Officer Washington, USA +1 202 458 2502 [email protected]

ZUBEROA MAINZ Trade Finance Officer Washington, USA +1 202 473 5573 [email protected]

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Trade and Supply Chain Contacts

GTFP & BUSINESS DEVELOPMENT ASIA & THE PACIFIC

ANURAG MISHRA Regional Head Mumbai, India +91 77 3870 7535 [email protected]

WESTERN EUROPE

LIEN HOAI NGUYEN Trade Finance Officer Hanoi, Vietnam +84 4 3934 2282 x603 [email protected]

ALOK KUMAR Trade Finance Analyst Mumbai, India +91 22 4230 2400 [email protected]

EUROPE & CENTRAL ASIA

ALEKSEY NIKIFOROVICH Regional Co-Head Moscow, Russia + 7 495 411 7555 x2129 [email protected]

MARK ROZANSKI Regional Co-Head Washington, USA +1 202 473 4640 [email protected]

CONFIRMING BANKS

ALEXEI TIMOFTI Assoc. Trade Fin. Officer Washington, USA +1 202 473 8963 [email protected]

LATIN AMERICA & THE CARIBBEAN

ANTONIO ALVES Regional Head Washington, USA +1 202 458 5056 [email protected]

JOSE ALBERTO VIVANCO Trade Finance Officer Mexico City, Mexico +52 55 3098 0232 [email protected] AHMED HANAA Trade Finance Officer Cairo, Egypt +20 2 2461 4275 [email protected]

ZEYNEP ERSEL Trade Finance Officer Washington, USA +1 202 458 2502 [email protected] TRANSACTION OPERATIONS

KARLA LOPEZ FLORES Trade Finance Analyst Washington, USA +1 202 458 8683 [email protected]

MIDDLE EAST & NORTH AFRICA

SHEHZAD SHARJEEL Regional Head Istanbul, Turkey +90 212 385 2561 [email protected]

SUSANNE KAVELAAR Trade Finance Officer Paris, France + 33 1 4069 3173 [email protected]

MURAT AYIK Senior Trade Fin. Officer Istanbul, Turkey +90 212 385 2579 [email protected] TRADE ADVISORY

ZEYNEP ATTAR Trade Finance Analyst Istanbul, Turkey +90 212 385 1329 [email protected]

GIMHANI T. SENEVIRATNE Lead, Trade Advisory Bangkok, Thailand [email protected]

SUB-SAHARAN AFRICA

GBOYEGA SONGONUGA Regional Head Johannesburg, S. Africa +27 11 731 3133 [email protected]

MARCELLE AYO Senior Trade Fin. Officer Johannesburg, S. Africa +27 11 731 3296 [email protected]

OLIVIER BUYOYA Senior Trade Fin. Officer Johannesburg, S. Africa +27 11 731 3025 [email protected]

BENIE KOUAKOU Trade Finance Analyst Johannesburg, S. Africa +27 83 780 6073 [email protected]

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Our Web Site

ifc.org/trade • Partner bank lists • Contact information • Latest news and events • Updated product offerings • New business opportunities

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