Two of Egypt’s largest state banks may become the latest recipient of the World Bank-member Multilateral Investment Guarantee Agency’s (MIGA) support under its trade finance guarantee (TFG) partnership with the European Bank for Reconstruction and Development (EBRD).
MIGA is considering earmarking up to $100 million worth of TFG for the National Bank of Egypt (NBE) and Banque Misr under its co-financing agreement with the EBRD, it said in a note on its website.
In February, the EBRD and MIGA signed a landmark first co-financing agreement, under which the World Bank arm will issue up to $200 million in trade finance guarantees to the EBRD to take part in the EBRD’s risk under its Trade Facilitation Programme (TFP).
With up to $200 million in guarantees over a period of up to six years, the TFP-MIGA partnership will support trade transactions conducted through state-owned banks. There are over 100 issuing banks in 26 countries participating in the TFP-MIGA guarantees.
The guarantees will provide increased capacity to select markets by covering the risk of non-payment by state-owned banks, this will help to increase trade flows and support the economic development of emerging market countries. This is especially important at a time of growing economic pressures and mounted geopolitical risks affecting trade, supply chains, and critical imports.
