OREANDA-NEWS. On August 04, 2008 The EBRD’s Trade Facilitation Programme (TFP) has passed another milestone by issuing its first guarantee in local currency, facilitating exports of wheat flower from Russia to Tajikistan and removing currency risks on the part of the Russian exporter, reported the press-centre of EBRD.

The EBRD’s guarantee covers 100% of the payment risk of a letter of credit worth Russian Roubles (RUB) 4,377,240, issued by Tajprombank in Tajikistan to Sberbank Russia.

Established in 1999, the Trade Facilitation Programme supports trade to, from and within the EBRD’s 29 countries of operations. The TFP assists participating banks in building track records with their correspondent confirming banks, reducing cash collateral requirements and freeing up clients' working capital by providing guarantees to the confirming banks for the payment of various trade finance instruments issued by local banks.

Since the start of the programme, in Tajikistan alone, the TFP has guaranteed more than 500 letters of credit from four Tajik banks, supporting imports from 30 countries in Europe, Asia and North America.

One goal of the programme is support for intra-regional trade, not only by helping to create jobs but also by supporting the restoration of traditional trade links. Since the start of the programme, the TFP has financed more than 1,000 intra-regional trade transactions in foreign currency. “The EBRD’s first guarantee in RUB meets the increased demand for local currency financing in intra-regional trade and eliminates the currency risk for the Russian exporter”, said Rudolf Putz, Operation Leader of the TFP.

The Trade Facilitation Programme is an important tool of the EBRD’s Early Transition Countries initiative which aims to stimulate market activity in the Bank’s poorest countries of operations by financing smaller projects. Transactions benefiting small and medium-sized enterprises form the majority of TFP business: More than 50 per cent of deals concluded since the start of the programme cover transactions below ?100,000.

This year the programme is again on course for a new record in terms of completed transactions and business volume. In 2007, the best year so far, the business volume rose to EUR781 million from EUR 707 million in 2006. The programme now includes more than 100 issuing banks in the region, with limits exceeding ?1 billion in total, and 646 confirming banks throughout the world.