Standard Chartered and CDC Group, the UK’s development finance institution and impact investor, today announced an additional $100 million commitment to their existing master risk participation agreement. The increase in commitment will provide Standard Chartered with systemic liquidity to directly support trade lines to local banks across South Asia and sub-Saharan Africa.
This new commitment comes at a particularly challenging time as the COVID-19 pandemic has created severe liquidity pressures for banks and businesses across Africa and South Asia, exacerbating the existing pressure on trade finance availability as international banks limit their risk appetite. In this context, development finance institution capital becomes even more critical to maintain trade flows and support economic growth.
Standard Chartered and CDC have taken an innovative approach to funding. The capital will be channeled into some of Africa’s most fragile countries and will address major challenges in the food and agriculture and healthcare sectors as they benefit from preferential terms.
This deepening partnership between CDC and Standard Chartered demonstrates the need to channel more trade finance towards vulnerable countries most affected by the impacts of the crisis, as well as support sectors that are critical to serving people’s basic needs.
The new commitment strengthens CDC’s longstanding relationship with Standard Chartered, marking a key milestone in the partnership, and contributes to two of the United Nations’ Sustainable Development Goals: Zero Hunger (SDG 2) and Decent Work and Economic Growth (SDG 8).
Admir Imami, Director, Head of Trade and Supply Chain Finance, CDC, said: “We continue to ramp up our trade finance programme as part of CDC’s “Strengthen” pillar response to COVID-19. Our partnership with Standard Chartered Bank will support vital trade and supply chains in sub-Saharan Africa and South Asia, thereby protecting jobs and economic growth. Our trade finance programme aims to alleviate poverty, and ensure vital goods get to those that need it most across our markets.”
Nicolas Langlois, Global Head of Trade Distribution, Standard Chartered, said: “We are delighted to partner with CDC on this initiative, which will enable us to support business sectors across sub-Saharan Africa and South Asia that are impacted by COVID-19, as well as provide them with the much-needed access to trade finance in these challenging times. This is not only testament to our commitment to be Here for good for our clients and the community, but more importantly, to continue to play a role in facilitating trade flows for businesses that are the life-blood of their local economies.”
James Duddridge, FCDO Minister for Economic Development, said: “As we work to support global economic recovery from Covid-19, this additional $100m through the CDC and Standard Chartered partnership will be critical for many businesses in sub-Saharan Africa and South Asia. This investment will help protect jobs, support economic growth and ensure vital goods get to those most in need.”
Standard Chartered has been actively supporting businesses, communities and individuals through the global pandemic. The Bank committed to providing USD1 billion of financing on a not-for-profit basis for companies that provide goods and services to help the fight against COVID-19 in March, and has since completed a number of drawdowns including recent disbursals to a leading plastics manufacturer in Vietnam to accelerate the production of plastic bottles supplied to sanitiser manufacturer, as well as a USD50 million loan to support a global technology, supply chain and manufacturing solutions company in addressing the supply chain issues facing the manufacturers of medical equipment. It also established a USD50 million COVID-19 Global Charitable Fund in April to help the recovery of the communities and markets it operates in.
Under the first phase, the Bank has to date donated USD21.9 million to 128 NGOs, charities and other partners across 52 markets. Under phase two where USD25 million will go towards supporting economic recovery and protecting livelihoods, it recently announced its commitment to support education, employability and entrepreneurship projects for young people through Futuremakers by Standard Chartered, its global initiative to tackle inequality.