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GTLP Phase 2 As the global financial crisis evolves, the proven GTLP platform (operational processes, IT/MIS, human resources, standardized documentation, accounting, agency role, mobilization framework) is providing solutions to meet market demands as well as IFC’s and program participants’ development priorities. Generally, market demand is shifting from liquidity support to a mix of liquidity and guarantees, the latter of which should have greater demand as market recovery takes root. Though an increasing number of global banks has improved liquidity positions, these institutions face increased risk aversion and lower lending appetite, particularly in Africa. Large global banks continue to focus on improving their capital base and are increasingly seeking efficient risk mitigation support. This shift in market demand is expected to be gradual as the secondary market remains inactive. Banks continue to find GTLP attractive to expand trade finance in emerging markets while prudently managing risk exposure. GTLP - G GTLP Guarantee is a component of GTLP Phase 2 that will respond to increasing demand for unfunded regional and multi-regional solutions, and also meet the needs of program participants who do not have liquidity yet wish to support trade finance. IFC and the program participants will provide credit guarantee coverage for up to 40% on portfolios of trade transactions (or 50% in Africa to provide inducement to expand in this region) originated by utilization banks through their networks of emerging markets issuing banks. IFC will provide the guarantee as primary guarantor, with the program participants providing a pro-rata counter-guarantee in the countries that they have agreed to support. This structure allows IFC to fulfill its agency role to quickly mobilize and channel risk-sharing support from various mobilization sources to banks as well as providing AAA guarantee coverage. GTLP Guarantee will encourage banks to finance trade by helping to mitigate the credit risk of re-entering and expanding into emerging markets. GTLP Phase 2 - Food & Agri GTLP Food and Agriculture is the other main component of GTLP Phase 2, with a primary focus on the agricultural industry. It complements the G-20 pledge to establish the Global Food Security Program to improve food security through support to the agribusiness sector and increased agriculture investments. GTLP Food and Agriculture provides short- to medium-term funding. It is designed to extend trade and working capital loans through regional banks in developing countries to eligible food and agribusiness farmers and small and midsize businesses in regions with an active food and agriculture export market to achieve a wider reach and greater development impact. Our target is to raise $500 million from program participants over the next 12-18 months to develop a $750 million GTLP Food and Agriculture program. Initial transactions are expected to have facility sizes of approximately $50 million, and a mobilization portion that at least equals IFC's portion. |