Marco Nindl, Trade Finance Banker, EBRD

1. 3rd Mongolia Trade & Commodity Finance Conference
Introduction to Panel Discussion:
Utilising international partnerships to extend access
to trade finance
Marco Nindl
Ulaanbaatar, 13 May 2014

2. What is the EBRD?
‒ International financial
institution, promotes transition
to market economies in 34
countries from central Europe
to central Asia
‒ In 2011, the Bank expanded
its operations to include
Egypt, Morocco, Tunisia,
and Jordan (Southern and
Eastern Mediterranean –
SEMED region)
‒ Owned by 64 countries and
two
inter-governmental institutions
‒ Capital base of €30 billion Cumulative commitments of €86bn
Note: Unaudited as at 31 December 2013

3. Where we invest
9 May, 2014 © European Bank for Reconstruction and Development 2012 3

4. TFP Objectives
• Support and develop trade, both inter- and intra-
regional
• Help local banks create track records with foreign
banks
• Provide liquidity to the trade finance system
• Strengthen EBRD relationships with local banks,
develop opportunities for further operations
• Institutional development is a key goal
The Trade Facilitation Programme (TFP)

5. Export
Production
Transport Storage &
distribution
Receivables
TFP application areas
Facilitates financing of all stages of the trade chain

6. EBRD supports trade by providing:
Guarantees that cover risks arising from trade finance transactions in
favour of Confirming Banks
• TFP guarantee agreements are signed with local issuing banks
(IBA) plus agreement with confirming banks (CBA) all over the world
• Currently: 106 Issuing banks and over 800 Confirming banks
Short-term advances/financing to banks in the Countries of
Operation for trade finance purposes
• TFP Revolving Credit Agreements are signed with local banks
(RCA)
TC funded trade finance training and advisory service to
service local banks
TFP – How does it work?

7. • Always involves a local bank (“Issuing Bank”) which
issues a trade finance instrument (e.g. a letter of
credit) and a foreign bank which confirms it to the
exporter (“Confirming Bank”)
• The trade finance instrument (e.g. L/C) ensures that
the exporter receives payment upon or after
delivery
• EBRD Guarantee covers payment risks of the
Issuing Bank to the Confirming Bank
TFP – Guarantee Transaction

8. TFP: Structure and Application
Confirming Bank,
Worldwide
Seller
Application for L/C openingL/C Confirmation
EBRD issues a Stand-By
Letter of Credit covering
the risks of Issuing Bank
towards the Confirming bank
Issuing Bank,
Country of
Operations
Buyer
L/C Issuance with request to confirm
(L/G Issuance with counter-guarantee,
other banking trade finance instruments)
SALES-PURCHASE
AGREEMENT

9. Sample: TFP – Import of car tyres and spare parts to
Mongolia
A German automobile
producer sells car tyres and
spare parts to Mongolia, EUR
940,000
A Mongolian bank issues a
L/C, confirmed by a bank in
Germany
EBRD guarantees 100% of
the political and commercial
payment risk

10. 106 Issuing Banks (IB) in 21 Countries
Country IB #
Armenia 9
Azerbaijan 7
Belarus 9
Bosnia & Herzegovina 2
Egypt 1
Georgia 6
Jordan 2
Kazakhstan 5
Kyrgyz Republic 2
Lithuania 1
Latvia 1
Country IB #
FYR Macedonia 5
Moldova 4
Mongolia 2
Morocco 3
Romania 2
Russia 27
Serbia 7
Tajikistan 4
Turkmenistan 1
Ukraine 7

11. 800 Confirming Banks in 77
Countries

12. Trade Finance Cash Facility
Local Company
Local Bank (EBRD’s borrower)
•Takes local company risk
•Borrows from EBRD
•On-lends to the local company
EBRD
Takes local bank risk and lends to the
local bank against sub-borrower base
Repayment to EBRD EBRD’s disbursement
loan repayment loan disbursement

13. Case study – Import of cars from Japan
Local UB based car dealer
imports cars from Japan
Local bank requests a
cash disbursement from the
TFP of the EBRD
EBRD disburses USD 1
million for 6 months to
cover the post-import
financing

14. • Total number of transactions: 15,545
 Transactions issued by 151 banks in 25 countries of EBRD’s
Operation
 Confirmed by over 400 banks in 57 countries
• Amount of EBRD guarantees and advances: EUR 9.5 billion
• Transaction size from EUR 10,000 to EUR 30 million
• Average deal size: EUR 0.6 million
• Around 50% of transactions are below EUR 100,000
• Average guarantee tenor: 10 months
Achievements to Date (1999 - 2013)

15. EBRD TFP – 2,033 transactions in 2013
1. Russian Federation (631)
2. Belarus (322)
3. Armenia (270)
4. Ukraine (200)
5. Georgia (163)
6. FYR Macedonia (92)
7. Moldova (88)
8. Azerbaijan (87)
9. Kazakhstan (68)
10. Romania (19)
11. Croatia (17)
12. Mongolia (17)
13. Serbia (12)
14. Turkey (11)
15. Morocco (10)
16. Kosovo (10)
17. Kyrgyz Republic (6)
18. Bosnia and Herzegovina (5)
19. Bulgaria (2)
20. Jordan (2)
21. Tajikistan (1)

16. The Panellists:
Nomulin Basbish, Senior Officer, Trade Finance &
Correspondent Banking, Khan Bank
Munhmandah O. Borjigin, Head of International
Banking Unit, XacBank
Yuji Kawasaki, Vice President, Global Trade Finance
Department, SMBC Seoul
Arnaud Maurissen, Vice-President, Transaction
Services Asia, ING Hong Kong
Panel Discussion: Utilising international
partnerships to extend access to trade finance