WTO Public Forum 2014

Demonstrating Positive Effects of EBRD’s Trade Facilitation Programme in the Region

Marco NindlGeneva, 1 October 2014

What is the EBRD?

‒ International financial institution, promotes transition to market economies in 34 countries from central Europe to central Asia

‒ In 2011, the Bank expanded its operations to include Egypt, Morocco, Tunisia, and Jordan (Southern and Eastern Mediterranean –SEMED region)

‒ Owned by 64 countries and twointer-governmental institutions

‒ Capital base of €30 billion Cumulative commitments of €86bn

Where we invest

2 October, 2014 © European Bank for Reconstruction and Development 2012 3

EBRD TFP – The Strategy

Strong focus on

Small- and medium-sized private banks in the CIS and South-East Europe

Early Transition Countries

Southern and Eastern Mediterranean (SEMED)

Intra-regional trade (= trade between EBRD countries of operation)

Foreign trade transactions of SMEs

Co-financing with the private sector

EBRD supports trade by providing:

Guarantees that cover risks arising from trade finance transactions in favour of Confirming Banks• TFP guarantee agreements are signed with local issuing banks

(IBA) plus agreement with confirming banks (CBA) all over the world• Currently: 104 Issuing banks and over 800 Confirming banks

Short-term advances/financing to banks in the Countries of Operation for trade finance purposes

• TFP Revolving Credit Agreements are signed with local banks (RCA)

TC funded trade finance training and advisory service to service local banks

TFP – How does it work?

• Always involves a local bank (“Issuing Bank”) which issues a trade finance instrument (e.g. a letter of credit) and a foreign bank which confirms it to the exporter (“Confirming Bank”)

• The trade finance instrument (e.g. L/C) ensures that the exporter receives payment upon or after delivery

• EBRD Guarantee covers payment risks of the Issuing Bank to the Confirming Bank

TFP – Guarantee Transaction

TFP: Structure and Application

Confirming Bank,Worldwide

Seller

Application for L/C openingL/C Confirmation

EBRD issues a Stand-By Letter of Credit covering the risks of Issuing Bank

towards the Confirming bank

Issuing Bank,Country of Operations

Buyer

L/C Issuance with request to confirm (L/G Issuance with counter-guarantee,

other banking trade finance instruments)

SALES-PURCHASE AGREEMENT

Case Study: 2013 Deal of the Year

Ucom LLC is a telecommunication company, founded in Armenia in 2007

In 2013 they imported optical cables from Romania

Ameriabank opened a letter of credit with post-financing in the total amount of USD_901,246.68 confirmed by Commerzbank

Case Study: 2013 Deal of the Year

This transaction was part of a larger project that is aimed at setting up the largest new generation fibre-optic network in Armenia

With this transaction, the EBRD supported intra-regional trade between Armenia and Romania

The tenor of the underlying transaction was for a total of three years, a tenor that would not have been possible without the support of the EBRD

EBRD guaranteed 100% of the political and commercial payment risk. Dutch Development Bank FMO shared part of the risk.

TFP – Exports from Austria to Georgia

• Doppelmayr Seilbahnen, Austria sells mono-cable gondola equipment to Tbilisi Park, Georgia

• Bank of Georgia opens a letter of credit, confirmed by UBS, Switzerland

• The EBRD guarantees 100% of the political and commercial payment risk

TFP Deal of the Year 2010 – NBD Bank

Dener Makina, Turkey sold plasma cutting and press brakes machines to Ruskomtrans Ltd, Balakhna, Russia

NBD Bank, Russia opened a Letter of Credit confirmed by Commerzbank, Germany payable in several instalments before, at and after delivery with post-financing

EBRD guaranteed payment of Letter of Credit toCommerzbank (risk shared 60 to 40 percent)

TFP Deal of the Year 2010 – Supporting local SMEs

Ruskomtrans Ltd established in 1996 in Nizhniy Novgorod region with 100 employees producing chassis and vehicle steel shells for various transportation needsNewly purchased machinery allows higher assortment of offered products and helped to increased profitability by 70 percent

Business Volumes p.a. 1999 - 2013

0.

200.

400.

600.

800.

1,000.

1,200.

1,400.

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Volume, € million

TFP - Supporting SMEs

2,033 transactions in 2013 87% of all transactions are below EUR 1mln

0

100

200

300

400

500

600

700

800

900

1000

< 100,000 0.1-1mln 1-5m >5m

771

993

231

38

Number of TFP Transactions by transaction value, EUR millions

Trade Finance Training & Advisory Projects 2012 & 2013

Topics:

Trade Finance Practices Advanced and Structured Trade Finance Factoring UCP 600 Fraud Prevention Correspondent Banking Restructuring Trade Finance Deals Legal Proceedings in connection with defaulted trade finance transactions e-learning

Projects were generously sponsored by Taipei China, Switzerland, Italy, the Netherlands, New Norway Cooperation Fund, Western Balkans Fund, Early Transition Country Fund, Special Share-holder Fund of EBRD.

EBRD: Capacity Building Projects

EBRD – Blended Learning Solution

TFP – TC Funded Trade Finance Consulting ING IGA - Chelindbank, Chelyabinsk (Russia)

EBRD Guarantees – Exports from Italy to Russia

Dolce and Gabbana Italy sells clothing to an importer in Chelyabinsk, Russia

Chelindbank Russia issues a payment guarantee, confirmed by BNL Italy

EBRD guarantees to BNL Italy up to 100% of the political and commercial payment risk

TFP – Italian clothes in Chelyabinsk, Russia

“Without your help these goods would never reach our city and our women will never be able to wear them”

Thank you for co-operation.

Best regards,

Tatiana Skurlatova

Chelindbank Chelyabinsk

EBRD TFP: Capacity Building ProjectsTrade Finance Training Courses

The ICC’s technology partner Coastline Solutions has assisted EBRD to develop an online training programme, incorporating ICC content on rules and operations in trade finance;

Project funded by the EBRD’s special shareholder’s fund and offered free of charge to Issuing Banks in EBRD’s countries of operations.

To date over 300 trade professionals from over 80 banks in 21 countries have enrolled.

EBRD E-Learning Programme

EBRD Trade Finance e-Learning Programme

Best students receive furtherscholarships and sponsoredtraining programmes in leadingEuropean confirming banks andtraining companies:

• Commerzbank, Germany • ICC PARIS• ICC Vienna• Banca Popolare di Sondrio,

Italy• BHF-Bank, Germany

EBRD ICC e-Learning Programme

What our students say...

TFP Trade Exchange Magazine: www.ebrd.com/tfp

TRADE EXCHANGE TFP MAGAZINELAUNCHED IN 2011

EBRD PUBLICATION DEDICATED TOTRADE FINANCE AND EBRDTECHNICAL ASSISTANCE PROJECTS

5,000 READERS FROM 1,000 BANKS

REPORTS ON:

NEWS AND EVENTS

REGIONAL FOCUS FEATURES

INDEPTH SECTOR KEY ISSUES

TRADE PROJECTS

Best Development Bank in Trade

Readers of Trade & Forfaiting Review (TFR), Global Trade Review (GTR) and Trade Finance Magazine have voted the EBRD in 2012 and 2013

“Best Development Bank in Trade”

EBRD invites other development banks, commercial financial institutions, export credit agencies and donors to co-finance or co-finance with the EBRD

www.ebrd.com/tfp