UK sovereign wealth fund CDC Group has announced Sh11 billion ($100 million) debt commitment to the Trade and Development Bank (TDB) for short-term lending to businesses.
The institutional investor announced Tuesday that the money is expected to support trade areas such as import, export and production of strategic inputs and agricultural commodity goods in the 22 member states where TDB operates.
This means that businesses in the East African community countries including Kenya stand to benefit from the CDC financing.
CDC said the commitment will provide top-up loans and capital for TDB’s new and existing clients emerging from the economic challenges brought by the Covid-19 crisis.
TDB president and CEO Admassu Tadesse said the commitment cements the crucial role that CDC has played as a funding and risk-sharing partner.
“This short-term financing facility will foster business continuity and support our build-back-better agenda via which we shall continue to intensify our commitment to development finance flows and SDGs, the Paris Agreement and Agenda 2063,” said Mr Tadesse.
Other countries served by TDB include those in the Common Market for Eastern and Southern Africa (Comesa) and Southern African Development Community (SADC).
Access to finance has become limited for many companies as financiers face increased defaults and requests for delays in repayments.
Since 2016, CDC has signed three loan facilities with TDB and a master risk participation agreement that facilitates trade flows in the region where the lender operates.
CDC managing director Tenbite Ermias said the money will cement partnership with TDB and support vital trade and investment in Eastern and Southern Africa.
“We are delighted to strengthen our partnership with TDB to support vital trade and investment in Eastern and Southern Africa. Protecting trade is central to accelerating the economic recovery from Covid-19, maintaining livelihoods, and facilitating inclusive growth,” said Mr Ermias.
“As a development finance institution, it is our role to provide capital in constrained markets, helping to support the economic and social development of the communities we remain committed to.”
Kenya is among the shareholders of TDB whose trade finance facilities seek to facilitate trade flows from, to and within the Comesa region and also to assist in technology and expertise transfer into the region.
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