AFR ICA
“Morocco is a key global African player
when it comes to fertilizers, so we supported their
exports to the rest of Africa with hundreds of millions of dollars of related trade financing.” Admassu Tadesse, President and Managing Director, Trade and Development Bank Group
and inflation are still quite high, and debt sustainability issues, prevalent. That’s taken its toll on many clients who typically have floating rates. So overall, there’s a lot of demand for financing, but also a lot of stress and constraints. OFQ : What new products are you preparing to mobilize new funding? What opportunities do you see on the horizon? AT: TDB Group continues to be a growth-orientated DFI and our balance sheet has just crossed the US$10 billion mark. We’re working with many strategic partners, expanding our o ff erings while targeting specific sub-segments in development finance, especially around renewable energy, but also looking deeper at o ff -grid and small-grid solutions. We’re also looking at innovation in technical assistance and project preparation, moving upstream from where we’d normally engage only at the financing level. That requires more risk appetite and suitable funding. In this regard, we have put in place a special
purpose vehicle in the form of the Trade and Development Fund. Here we’re looking for partners to provide more concessional financing to help blend with projects that need to take o ff . We also have an asset management platform, a trade finance fund and a green housing value chain fund, among others. These are all new o ff erings we’re looking to expand with strategic partners like the World Bank Group, which has become a very strong partner. We look forward to others joining in those initiatives, notably the OPEC Fund as one of our strategic partners. OFQ : Compared to commercial banks, what is the regional role of a DFI like TDB Group? Is that role likely to change and evolve over the next decade? AT: We’re naturally sustainably- orientated with the classic triple bottom-line dimensions of financial, environmental and social sustainability. We complement markets, often working closely with commercial banks but also go where commercial banks wouldn’t normally go. So we address market
failures, but at the same time crowd in private capital where we can. Commercial banks have always been strong partners for TDB Group, but there are challenges with risk taking. Many international commercial banks have retreated from several of our frontier markets, notably those that have typically provided acceptable letters of credit for trade purposes. The regulatory environment has become very strict and onerous in many ways. So we’ve had to step in and do more to ensure that gaps are covered as much as possible. The gap in trade finance is well over US$100 billion per annum in Africa. As a US$10 billion institution, we have quite a bit of leverage but it’s still very short of filling that big gap. OFQ : In which sectors and regions are we seeing retreats? AT: It’s mostly in sub-Saharan Africa, in pockets of eastern, western and southern Africa. But there’s been a systemic retreat for several years. Access to finance has always been an issue
48
Powered by FlippingBook