By Axel Reiserer
The European Bank for Research and Development(EBRD) provided a record level of support for trade activity in March as demand rose in response to the impact of the coronavirus pandemic across the emerging countries where it invests.
The Bank responded to the economic crisis caused by Covid-19 with the launch of an initial €1 billion(US$1.083billion) Solidarity Package in support of its partners.
The provision of trade finance is vital to keep up global trade under extremely challenging circumstances. With its Trade Facilitation Programme (TFP) the EBRD is well-positioned to lend its support.
Under the TFP, there were a 144 transactions worth €385.6 million in March, the highest turnover ever recorded in a single month.
So far this year, the EBRD has issued 424 TFP transactions for €682 million, compared with 445 transactions worth for €559 million in the same 2019 period.
The EBRD extended tenors of its guarantees in support of imports of equipment from China into Albania and export of services from Greece into Spain, where shipments had been delayed or projects have been put on hold.
The EBRD also supported imports of ambulances from Portugal into Morocco and of medicines from Switzerland into Jordan and from Turkey into Georgia.
The Bank also provided an extension to a trade-related cash advance where a bank in Armenia granted a repayment holiday to their small business client, a manufacturer of confectionery.
The coronavirus pandemic is having a serious impact on trade flows and supply chains across the world, increasing the demand for trade finance as importers and exporters juggles with new and sometimes more complex supply routes.
Under the coronavirus response package, the EBRD is also reaching out to existing clients with support to meet short-term working capital and liquidity needs.
The €1 billion financing package is just an initial step and the Bank’s stands ready to do more in response to the needs of its recipient countries.
The Bank’s Trade Facilitation Programme has been running since 1999 with the aim of promoting foreign trade to, from and amongst the EBRD countries of operations and offers a range of products to facilitate this trade.