The Board of Directors of the African Development Bank Group has approved a $50 million Trade Finance Transaction Guarantee facility to support to trade finance activities of Awash Bank S.C. (Awash), in Ethiopia.

This facility will enable the Bank to provide a guarantee of up to 100 percent to confirming banks for the non-payment risk arising from the confirmation of Letters of Credit and similar trade finance instruments issued by Awash. The facility will provide much needed import trade finance requirements to Small and Medium Sized Enterprises (SMEs) and local corporates in Ethiopia. It will also support intra-Africa trade, thus directly contributing to the successful implementation of the African Continental Free Trade Area (AfCFTA) agenda.

Following the approval, African Development Bank Head of Trade Finance, Lamin Drammeh said: "Supporting Trade in Africa is a key priority at the African Development Bank. Trade finance is an important driver of economic growth and is critical for cross-border trade, particularly in emerging markets. We are delighted to work with Awash, a strong partner with extensive knowledge and network in Ethiopia, on a shared ambition to support the region's Trade."

Commenting on the approval, Tsehay Shiferaw, CEO of Awash Bank S.C., said: "The Trade Finance Transaction Guarantee facility approved to our bank by the African Development Bank will ease the burden of arranging cash collateral with banks, thereby improving our liquidity and enabling us to support more trade customers." He added: "The facility will enhance our trade relationships with other International and African confirming banks.

Awash looks forward to further strengthening its partnership and benefiting more from the resources and extensive capabilities of the African Development Bank and its partners, Shiferaw said.