Azerbaijan, Baku / corr Trend I Khalilova / The OPEC Fund for International Development (OFID) has signed a co-operation agreement with the European Bank for Reconstruction and Development (EBRD).
Signed by Suleiman J. Al Herbish, OFID Director-General, and Jean Lemierre, President of the EBRD, the agreement will enable OFID to share the risk in EBRD's Trade Facilitation Program (TFP), and will initially benefit five banks in Azerbaijan and Tajikistan.
Commenting on this agreement, Al Herbish said: "This is an important region for OFID and we are pleased to participate in EBRD's efforts to help those countries to strengthen and sustain development in their economies, which is part of the mandate of OFID."
International trade remains a challenge in developing countries due to the weakness of their banking sectors. OFID's guarantees will help lower the cost of local banks to obtain credit confirmation by western corresponding banks, thereby connecting them to the international trade system and facilitating the export and import of commodities and capital equipment. It will also help banks and their exporting clients to establish new markets, thereby fostering open market economies.
Small and medium enterprise transactions, a fundamental objective for OFID, are expected to form the majority of OFID's guarantee business with more than one half of all transactions likely to be for under 100,000.
Jean Lemierre stated that the new agreement will help foster the long standing cooperation between the two institutions, and would allow the Bank to increase its risk-taking capacity to further develop trade across the Commonwealth of Independent States, thereby boosting economic growth and helping create jobs.