IFC, a member of the World Bank Group, is extending an unfunded short-term facility under the Global Trade Finance program (GTFP) to Global IME Bank, one of the largest commercial banks of Nepal, with a carve out allocated towards climate smart trade finance.
This is the first IFC green trade finance line globally.
Chief Executive Officer of Global IME Bank Ratna Raj Bajracharya and Joon Young Park, Regional Manager Financial Institutions Group South Asia singed on the document on behalf of their respective organisations.
GTFP is IFC’s response to shortage of trade finance limits in developing economies such as Nepal and the project will support Global IME Bank in addressing the demand and supply gap for its growing trade business. Inclusion of “Green” component in this GTFP is a strong value proposition for the Bank to do climate trade business responding to the need of the hour.
The GTFP line is expected to improve the access to Trade Finance for GIBL and its trade finance customers. IFC anticipates that GTFP improves overall market integration by maintaining and expanding trade finance, financial linkages and trade across multiple markets through strengthening bilateral correspondent banking connections and serving as an enabling platform to make new connections between local and international banks and their customers, according to a statement issued on Wednesday by the GIBL.
Speaking on the occasion, Chairman of Global IME Bank Chandra Prasad Dhakal said that the agreement would be a roadmap for climate smart trade financing in Nepal.
He said further thanked IFC in extending its trade facility to Global IME Bank first in the world.
“This IFC GTFP line will allow Global IME Bank to connect with more global Confirming Banks with better capacity which will help the Bank to process more transaction for its clients in different geographies.” said Ratna Raj Bajracharya, CEO of Global IME Bank. “In fact, this fits into our strategic agenda as it has a climate component to it.”
"This will help the bank better address the growing demand for trade finance in Nepal," said Babacar S. Faye, IFC's Resident Representative in Nepal. “While responding to Nepal’s shortage of trade finance, this facility also focuses on addressing the impact of climate change, by supporting the adoption of energy efficient technologies, ensuring sustainability of operations, and cutting carbon emissions.”
He said that IFC has now had partnership in trade and finance, but it would go in other sectors such as energy, manufacturing and agriculture, among others in the days to come.
Joon Young Park, Regional Manager FIG South Asia, said this was IFC's first ever partnership in climate GTFP in the world, read the statement.
He also thanked and congratulated Global IME Bank to be the first Bank to receive the first GTPF line in the world.
This is the second partnership between IFC and Global IME. In 2019, IFC invested $20 million in the bank to support SMEs.