The Board of Directors of the African Development Bank Group has approved a $25 million Trade Finance Transaction Guarantee Facility for Bank of Africa Madagascar to accelerate the island's industrialization and support local businesses.

The three-year facility represents a comprehensive approach to supporting Madagascar's economic development, specifically focusing on large local businesses and SMEs, including those led by women. The guarantee targets critical sectors such as agro-industry and light manufacturing, enabling the import of essential inputs, production machinery, and telecommunications equipment. The operation will also help improve food and nutritional security.

Lamin Drammeh, Head of Trade Finance at the African Development Bank, emphasized the facility's significance: "This guarantee will enable the Bank to provide up to 100 percent coverage for confirming banks to facilitate the confirmation of Letters of Credit and similar trade finance instruments issued by Bank of Africa Madagascar."

Adam Amoumoun, the Bank Group's Country Manager for Madagascar, noted: "This trade support operation will contribute to the development of agro-industry and manufacturing industry. It is completely aligned with the Bank's 2022-2026 Country Strategy for Madagascar, particularly its support for agriculture transformation and developing the manufacturing industry."

Jamal Ameziane, Managing Director of Bank of Africa Madagascar, highlighted the partnership's strategic importance: "This facility will enable us to provide more effective support to a number of companies in Madagascar's economic landscape."

The transaction guarantee supports projects with minimal climate risks and low greenhouse gas emissions. It covers a range of financial instruments, including confirmed Letters of Credit, business loans, irrevocable reimbursement undertakings, endorsed drafts, and promissory notes. Since its launch in 2021, the facility has been a crucial tool for supporting commercial banks across Africa.