The Board of Directors of the African Development Bank Group has approved a trade finance transaction guarantee facility of EUR 15 million for Bank of Africa, Benin.

The transaction guarantee will support imports of supplies, production machinery and telecommunications equipment needed to drive the industrialization process of this country in the Gulf of Guinea. Although support for agro-industry and light manufacturing industry are the main sectors targeted by the operation, it will also facilitate imports of basic necessities to satisfy short term local demand.

"This facility will allow the African Development Bank to provide a guarantee of up to 100 percent to confirming banks to facilitate the confirmation of letters of credit and other similar trade finance mechanisms issued by Bank of Africa Benin to large local businesses and small and medium-sized enterprises (SMEs)," said Lamin Drammeh, Head of Trade Finance at the African Development Bank.

"By supporting imports of the supplies, equipment and production machinery needed to promote manufacturing industry, this facility will help contribute to the achievement of three of the African Development Bank's five strategic priorities - the "High 5" - namely Feed Africa, Industrialize Africa and Improve the Quality of Life for the People of Africa," declared Robert Masumbuko, head of the Bank's Country Office in Benin.

Abdel Mumin Zampalégré, General Manager of Bank of Africa Benin, professed delight at this first direct relationship with the African Development Bank, declaring: "this partnership is closely aligned with the Bank of Africa Group strategy, which has made international trade finance one of the main thrusts of its intervention strategy in Africa". "This facility will allow us to provide more effective support to several businesses in Benin's economic landscape," he added.

The facility will last three years and will also benefit women-led businesses. The target projects will be those that are least vulnerable to climate risks and have only a minor impact on greenhouse gas emissions.

About the African Development Bank Group transaction guarantee:

The transaction guarantee is one of the trade finance mechanisms established by the African Development Bank to support commercial banks in Africa. It was launched in 2021 and covers a range of trade finance mechanisms, including confirmed letters of credit, commercial loans, irrevocable reimbursement undertakings, guaranteed bills and promissory notes, among others. The facility is available to all banks registered and operating in Africa that have been through the Bank's due diligence process.