TDB, KEXIM sign $100mn funding cooperation agreement

The Eastern and Southern African Trade and Development Bank (TDB) has recently made a significant step towards enhancing private sector business activity between TDB member states and the Republic of Korea. In a groundbreaking move, TDB has signed a $100 million inaugural loan program with the Export-Import Bank of Korea (KEXIM). This partnership aims to facilitate trade and development initiatives in the Eastern and Southern African region. Admassu Tadesse, the President and Chief Executive of TDB, shed light on this new development in an exclusive interview with CNBC Africa. Tadesse highlighted the importance of this new funding partnership with KEXIM, emphasizing how it will promote trade between South Korea and the region. He mentioned that discussions for this collaboration had been ongoing for some time, with the recent agreement enabling TDB to finance trade in services and equipment. The funding program offers flexibility in its scope, covering various trade-related activities such as short-term trade, services, heavy equipment, and industrial projects aligned with the region's industrialization agenda. Tadesse mentioned that the facility is open to institutions as well as companies involved in trade with South Korea, enhancing export credit facilities to facilitate trade. When asked about potential beneficiaries, Tadesse explained that TDB would evaluate and consider credits under its risk framework to manage limits, client types, transaction sizes, and geographic locations. This approach ensures comprehensive risk management while maximizing the funding's impact. Reflecting on TDB's growth trajectory, Tadesse acknowledged the bank's remarkable progress over the years with a compounded growth rate of over 20% annually. Despite robust growth, TDB aims to expand its trade and development initiatives further. Tadesse emphasized the importance of intra-regional trade within Africa, citing the challenges posed by economic disparities among African countries. He noted that the African Continental Free Trade Area presents an exciting opportunity to boost regional trade dynamics and incentivize local producers and traders. However, Tadesse recognized the need for enhanced industrialization strategies to add value to commodities and foster regional economic growth. Addressing sector bias concerns, Tadesse clarified that the funding facility targets value-added activities, particularly focusing on equipment, construction services, and select value-added commodities like fertilizers. He highlighted the versatility of the funding, which can support a wide range of sectors including construction, mining, ICT, and electronics. Tadesse underscored the importance of sourcing equipment from South Korea to drive multi-sectoral development in the region, aligning with TDB's trade and development mandate. The collaboration between TDB and KEXIM marks a significant milestone in fostering trade and development opportunities in the Eastern and Southern African region. By leveraging the $100 million funding cooperation agreement, both institutions are poised to catalyze economic growth, facilitate trade, and advance industrialization initiatives in the region.