Trade and Commodity Finance Solutions

2017 PRODUCT GUIDE

Best Global DFI 2017 & 2016 Best Best DFI Americas 2017 & 2016 Development Supplier Best Global SME Finance Bank 2017 Finance Finance Deal of the Year: GTFP 2016 Institution Program Trade and Commodity Finance Products

Global Trade Finance Program (GTFP) 3-7

Global Trade Liquidity Program (GTLP) 8-9

Critical Commodities Finance Program (CCFP) 8-10

Working Capital Solutions (WCS) 11-13

Structured Trade & Commodity Finance (STCF) 14-16

Global Warehouse Finance Program (GWFP) 17-20

Global Trade Supplier Finance (GTSF) 21-23

2 Global Trade Finance Program (GTFP)

Launched in 2005, the US$5 billion GTFP provides risk

mitigation by guaranteeing trade-related payment GTFP Guarantee for a Letter of Credit obligations of over 285 eligible financial institutions (FIs). In 2014, IFC introduced the US$500 million Medium-Term GTFP, which extends guarantees up to five years to selected

partners to support imports of equipment and capital goods. L/C in favor of exporter

Payment Payment Payment Local International Bank Structure Program Features Importer Bank Exporter (Issuing Bank) (Confirming Bank)

• Pre-approved list of banks • Coverage up to 100 percent Documents Documents • Banks contact IFC’s regional • Umbrella guarantee covers trade specialists for coverage country and commercial risk Goods and pricing • Guarantees issued within 48 • If agreed, Confirming Bank hours IFC IFC guarantee by SWIFT sends a SWIFT request for • 3-year maximum tenor (5yr guarantee for select banks under • IFC issues its guarantee by Medium-Term GTFP) SWIFT • Issuing Bank consent is required (no silent 3 guarantees) Global Trade Finance Program (GTFP)

Under GTFP, IFC has issued over 54,000 guarantees to date LIFETIME PROGRAM STATISTICS for US$60 billion. In FY17, IFC issued 3,400 guarantees (as of August 2017) totaling US$6.1 billion. The program has had zero losses Total # / US$ of guarantees 54,000 / US$60B since inception. IFC continues to add new issuing and confirming banks under Transaction Size 80K- 80M US$ GTFP. For the most updated lists please see www.ifc.org/gtfp Average Tenor 5 months

CLAIMS ZERO Benefits for Banks Covered Instruments FY17 AVERAGE PORTFOLIO BALANCE BY REGION • Expands geographical • Import Letters of Credit • Standby Letters of Credit (WITH TOP TWO COUNTRY EXPOSURES) Middle East & North Africa coverage for import and 1.Lebanon • Guarantees: IFC covers the payment 2.Pakistan export clients Latin America & 13% obligation of the issuing bank for the Caribbean • Provides risk coverage to 1.Brazil 26% performance bonds, bid bonds, 2.Guatemala Asia & the Pacific enhance trade lines in new 1.Vietnam or challenging markets payment/advance payment 18% 2.Bangladesh • Builds new correspondent guarantees • Promissory Notes for Trade: IFC 23% bank relationships on a Europe & Central covers the payment obligation of Asia 20% Sub-Saharan Africa low-risk basis 1.Turkey 1.Nigeria • Mitigates provisioning and the issuing bank for pre-export 2.Romania 2.Kenya Basel capital requirements financing or post-import financing extended by a participating 4 (AAA-rating) Confirming Bank GTFP Climate Smart Trade

• Through the Climate Smart Trade Initiative, we may provide a price incentive or longer tenors for equipment and projects that have clearly defined climate change benefits. • Banks may be asked to provide additional information to ensure that the goods qualify under international protocols. • Eligible goods include: Technology Goods

5 GTFP Transaction Highlight

Financing Energy-Efficient Equipment in Armenia

IFC guaranteed a three-year letter of credit with post-financing for ASCE Group, a leading steel construction materials and scrap metal recycling firm in Charentsavan, Armenia, to support the import of equipment for a new steel rolling mill.

The issuing bank was Ameriabank in Armenia and the confirming bank was Deutsche Bank in Germany. The beneficiary was Siemens Metals Technology in Italy. Payment was deferred up to 18 months from each shipment.

6 GTFP Sustainable Shipment Letter of Credit

• Through the Sustainable Shipment Letter of Credit initiative, we may provide a price incentive for agri commodities that have clearly defined to contribute to sustainability. • Banks may be asked to provide additional information to ensure that the goods qualify under this initiative. • Eligible goods include: RSPO Palm Oil.

7 Trade Portfolio Solutions (GTLP & CCFP)

Funded and unfunded risk-sharing facilities in trade portfolios by IFC and program partners (governments, DFIs or insurers) aimed at increasing trade finance in developing countries. Program partners GTLP: Global Trade Liquidity Program for Financial Institutions (FI) exposure. Program partners co-finance with funding or counter-guarantees CCFP: Critical Commodities Finance Program for FI and corporate exposure for emerging market trade in soft commodities and energy imports.

Structure Benefits to Bank IFC channels funding or guarantees for up to 50% on portfolio of trade transactions • IFC provides funding or guarantees • Risk mitigation: IFC’s AAA Originating bank as agent and primary guarantor, rating, effective in managing with counter-guarantees from the effects of Basel I & II Originating bank retains 50+% of the program partners • Capacity enhancement: aggregate amount of portfolio of trade • Up to three-year program with one- relieves headroom, single- transactions year run-off client, country-exposure Emerging market banks • Pricing: market based pro-rate constraints sharing • Ease of administration: deal (GTLP and CCFP) and only with IFC as agent corporates (CCFP only) • Large facilities: sizeable solutions permit effective trade portfolio risk 8 management Trade Portfolio Solutions (GTLP & CCFP)

Since 2009, IFC has signed 28 trade portfolio facilities with banks LIFETIME PROGRAM STATISTICS and mobilized additional funding through an array of program (as of August 2017) partners. GTLP CCFP Launched in 2009 2012 New Areas of Focus: single region or single country facilities, # of facilities committed 22 6 multiple currencies. Total IFC participation (in US bn) 18.5 11.2 Total trade supported (in US bn) 53.0 23.5 GTLP Partner Banks CCFP Partner Banks Total # of trade transactions 23,961 2,508 Banco Galicia Bladex Banco Itau Paraguay BNP Paribas Citibank BTMU CUMULATIVE TRADE SUPORTED BY REGION ING Commerzbank Europre & Central Middle East & N. Asia, 2% Africa, 7% Credit Agricole CIB Rabobank Société Générale Fimbank South Asia, 1% Standard Chartered Sub-Saharan Intesa Sanpaolo Africa, 40% J.P. Morgan Program Partners SMBC East Asia & the Pacific, 38% Standard Bank AfDB, Afreximbank, CDC, Standard Chartered DFID, Govt. of Canada, Latin America & Unicredit Govt. of China, Govt. of the Caribbean, 12% Wells Fargo Netherlands, JBIC, KBD, Munich Re, Saudi Fund for 9 Dvlpmt., Swiss Re CCFP Deal Highlight

Société Générale Facility Expands Funding for Critical Commodities Shipment

IFC partnered with Société Générale (SG) to launch a US$500 million, 3-year commodity trade finance facility to expand funding for trade flows of agricultural and refined energy commodities through SG’s global client network.

This partnership helps channel additional working capital to emerging market firms to expand their commodities production and trade in many of the world’s poorest countries.

The facility is helping sustain and expand commodity trade finance for over 200 emerging market financial institutions and corporates, mainly in Africa and the Middle East.

10 Working Capital Solutions (WCS)

Short-term loans to emerging market banks to provide US$ liquidity in low-income countries where macro events have Program partners created US$ constraints (e.g., FX shortages in Bangladesh) or hindered investment (e.g., Ebola crisis in West Africa). Program partners co-finance alongside IFC

Structure Benefits to Bank

IFC extends loan to one • One-year traditional “A” loan • Meet clients’ immediate trade or more local banks with potential to be renewed finance and working capital twice for total of 3 years requirements • IFC provides funding as • Provides multi-year FX funding Local bank #1 Local bank #2 lender, with co financing from certainty Local banks extend US$ program partners if needed • Increases banks’ funding options financing to their SME • Pricing: 6-month Libor + • Competitive pricing terms clients to support their spread • No additional documentary working capital needs requirements Emerging Emerging market SMEs market SMEs

11 Working Capital Solutions (WCS)

Since 2011, WCS facilities have been an entry product for new IFC WCS Program Statistics clients with a first-time relationship in 2 out of every 3 WCS client (As of August 2017) bank. Small and Medium Enterprises (SMEs) have been the primary Mandated Transactions: 34 beneficiaries of WCS financing with about 12,000 entities supported Committed Facilities: 31 via pre-export/post-import financing, bill discounting, and New IFC Clients: 19 refinancing of letters of credits. Key sectors supported include agri-

business, manufacturing, garments, and energy efficient products. Regions: 6

Countries (o/w IDA): 18 (o/w 9 IDA)

Mandated Volume by Region = US$998mn Committed Projects by Region = 34 Total Mandated Volume: US$998million

CEA Total Commitment Volume: US$778 million CAF $40 CEU CEA $138 $82 2 CAF Volume of Trade Financed: US$2.37 billion 7 CEU Number of SMEs Supported: ~11,850 CLA 6 $220 Repaid/Cancelled Volume: US$363 million CSA CLA $443 3 Repaid/Cancelled Facilities: 19 CME CSA CME $75 15 1 NPL Ratio: Nil (0.00%)

12 WCS Deal Highlight

Rapid Response: Providing Critical Working Capital amid Ebola Crisis

A direct result of the epidemic has been a severe disruption in trade and supply chains and a precipitous decline in foreign currency earnings.

Under the Ebola Emergency Liquid Facility, IFC received Board approval to extend one-year loans totaling US$75 million to banks in Guinea, Liberia and Sierra Leone.

The banks benefitting from IFC support can now continue to provide trade finance facilities and FX to pay for critical energy food and other manufactured products.

13 Structured Trade & Commodity Finance (STCF)

Supports large cross-border commodity trades using collateral management to support lending at all stages of the supply chain (exporter/producers, trading companies, importer/processors).

Structures Benefit to Banks Benefit to Suppliers/Buyers • Multiple structures, including • A partner, not a competitor working capital financing facilities, • Risk mitigation: IFC’s AAA rating, • Risk appetite for emerging pre-export finance facilities, effective in managing the effects markets and commodity sectors receivable discounting facilities, of Basel regulations • Fills a gap in absence of borrowing base facilities, • Capacity enhancement: relieves commercial banks transactional financing facilities headroom, single-client, country- • Having IFC as lender/guarantor • IFC participates by risk sharing or exposure constraints pursuant to a stringent due co-lending jointly with a Bank or by diligence can attract more providing credit guarantee Sectors lenders • Bank should have solid track record in managing the transaction flow and • Emphasis on strategic Structured Commodity Finance specialists can act as the security agent commodities, such as energy and optimize the various IFC programs (STCF, • Environmental and Social (E&S) soft (agri) commodities GWFP, CCFP) to better support all players requirements to be met by facility of the commodity value chain in emerging markets

14 STCF Deal Highlight: Providing oil import facilities to African countries

• Ghana (2010): IFC financed, • Mauritania (2012): IFC and Société • Ethiopia (2013-2017): IFC has been jointly with a local bank, the Générale (SG) established a fully secured, guaranteeing international banks (BNPP imports of petroleum products by revolving 2-year facility of US$400m for and Natixis) to finance the imports of Chase Petroleum, a bulk BB Energy to import oil products sold to oil products by Ethiopian Petroleum distribution company. The facility 11 licensed oil marketing companies, Supplier Enterprise (EPSE) from was secured by assignment of including state-owned mining company international suppliers (IPG, Vitol, receivables on acceptable SNIM. IFC and SG each invested Petrochina). IFC participated for up to retailers and cash on pledged US$127.5m, with the remainder from US$150m in these guarantees/ accounts. other commercial investors and DFIs. discounting facilities.

Example of transactional financing structure in Mauritania Example of limited recourse discounting facility

Financiers: US$400m facility Supplier EPSE BB Energy Storage Eligible Commercial Contract local buyers Delivery of goods Oil sales Discounting of BBE’s SNIM receivables collection 90-day open account against Issuance of Facility account assignment of payment undertaking SG as agent for lenders agreement with SG rights, notified to and Payment of

and acknowledged Onshore Offshore Offshore receivable at Commercial banks & securities 90-day L/C Confirming Local banks by the buyer maturity development financiers banks and banking 15 partner Payment L/C Commodity STCF Deal Highlight: Promoting Agriculture with a Syndicated Trade Facility

IFC participated in a one-year, US$155 million pre-export finance facility for Trans-Oil, an existing IFC client and a leading grain Example of pre-export financing structure and seeds trading and processing company in Moldova, to cover the company’s peak-season pre-export funding needs. Offtakers Offshore Agent Bank Offtakers The facility was structured as a borrowing base. make payment before taking Commodities possession of commodities

shippedL/C flow Disbursement Offshore based on Security package included agri commodities, receivables, and TRANS-OIL and bank share risk on borrowing base pledge of collection account. exporter’s obligations report

Commodities moved to port, ownership Why was Trans-Oil a good candidate? transferred • Export-oriented business (80+% of sales for export) Suppliers Local Agent Bank • Diversified portfolio of overseas buyers who pay for goods at Payment to

delivery Onshore suppliers and • Commodities and export contracts can be pledged to lenders domestic farmers • Agent (Société Générale) is a long-term lender to the company FacilityPayment structure flow Payment Commodity and a strategic IFC partner in commodity finance

16 Global Warehouse Finance Program (GWFP)

Support for the agriculture sector by providing banks with liquidity or risk coverage backed by warehouse receipts, which can be used to provide financing to producers and traders ahead of export. Program partners Program partners co-finance Structure Benefits to Banks alongside IFC • Expands lending capacity to • Funded or unfunded: 50-50 risk agricultural sector clients against sharing; can also take the form their warehoused commodities of a direct loan IFC channels funding or guarantees for up to • Prepayment, bilateral or 50% on portfolio of warehouse receipts/CMA syndicated transactional facility, Benefits to Producers borrowing base, etc. Originating bank • Enables increased use of financing Warehouse • Facility tenor: one year, receipts used extendable up to three years based on warehouse receipts (SMA, Originating bank open facility for clients as collateral • Beneficiaries: prequalified sub- CMA or equivalent) borrowers • Enhances income by having more flexibility in timing sales to protect Agricultural Warehouse against price seasonality players • Faster implementation based on Suppliers store crops in third-party warehouse delegation from the Board

17 Global Warehouse Finance Program (GWFP)

GWFP facilities have two typical formats:

Credit Line Risk-Sharing Facility IFC offers a short-term loan to a IFC may guarantee up to 50% of short bank, which in turn uses the funds term loans extended to agricultural TRACK RECORD SINCE 2010 to on-lend to farmers, agricultural producers or traders against Program Inception 2010 producers or traders against warehouse receipts or equivalent as # of projects committed/disbursed 25 warehouse receipts of equivalent collateral. A bank can transfer credit Total committed/disbursed (in US mn) 702 as collateral. risk to IFC from its own portfolio or Mandated projects (in US mn) 915 from a new portfolio it originates. The Transactions supported (in US bn) 6.2 Participating Banks: assets typically remain on the bank’s Total # of countries reached 66 Banco Regional (Paraguay) balance sheet, while IFC provides a NPL Ratio 0% BBVA (Paraguay) partial credit guarantee. # of farmers reached 750,536 Fimbank (Global) Participating Banks: Food security (in mn) 7.4 Interbanco (Guatemala) BNP Paribas (Africa) Sudameris (Paraguay) AUB (Egypt) Techcombank (Vietnam) Nedbank (Africa) CRDB (Tanzania) BICIS (Senegal) NMB (Tanzania) HSBC (Africa) Societe Generale SCB (Africa) 18 ING (Africa) GWFP Deal Highlights

Providing Pre-Harvest Loans to Cotton Growers in Africa

• Burkina Faso (2016/2017): IFC extended a 1-year, US$47 million facility to Sofitex. • Cameroun (2016/2017): IFC extended a 1-year, US$17 million facility to Sodecoton. • Mali (2013/2014): IFC extended a 1-year, US$6 million facility to Compagnie Malienne pour le Development du Textiles (CMDT).

The GWFP facilities were used to finance the repayment of pre-harvest loans, the purchase of seed cotton from farmers, the transit and storage of cotton, and to meet other working capital needs.

IFC also offered advisory services in productivity improvement (including irrigation) and weather insurance solutions through the Better Cotton initiative.

19 GWFP Deal Highlights

Providing Transactional Facilities to Fertilizers Traders in Africa and Latin America

• Latin America (2016): IFC participated in a 1-year, Example of transactional financing with a multi country approach US$150 million transactionally secured facility for NITRON, arranged by BNPP Geneva. Bank Borrower • Africa (2017): IFC participated in a 1-year, US$25 million Facility agreement package of transactionally secured and syndicated Guaranteed transactions L/C flow facilities for ETG Group. Sells fertilizers to 1 • Africa (2017): IFC is currently working on several other Guarantee Agreement million farmers in Latin facilities with international fertilizer suppliers and banks. America and Africa Farmers The GWFP facilities were used to finance the purchase, storage, transportation and sales of fertilizers to farmers in Farmers several African countries, and other working capital needs. Farmers…

20 Global Trade Supplier Finance (GTSF)

Multicurrency investment and advisory program that provides short-term finance to emerging market suppliers and SME exporters backed by receivables from investment grade international buyers.

Sectors Financed Suppliers GTSF Average Outstandings by Country FY2017 • Retail, branded garments • 800+ from 14 countries Sri Lanka, 2% India, • Transport equipment El Salvador, 2% 1% Indonesia, 0.003% Egypt, 4% • Food & Agribusiness Thailand, 4% Honduras, 4%

Pakistan, 35%

LIFETIME PROGRAM STATISTICS China, 6% (as of Jan 2017)

Year launched 2012 Mexico, 6%

Active buyer programs 15

Total trade supported ~ US$3 bn Vietnam, 12% Countries supported 14

Total suppliers financed ~ 900 Bangladesh, 24%

21 GTSF Project Example Global Buyer (through Partner Bank- Funded/Unfunded Participation)

1 IFC’s value-added to Partner Banks Goods are shipped by the Supplier on open account terms and invoice is submitted to Buyer • IFC signs a Master Participation Agreement Buyer uploads approved invoices, with the Partner Bank and agrees to buy a providing irrevocable payment obligation (automated process, post Supplier views and requests participation in the bank’s structured finance shipment) early payment for approved invoices (SF) program for a buyer and provides 2 incremental funding and/or coverage for Buyer 3 Emerging PARTNER BANK supply chain finance 7 Market 4 • Supports expansion of SF programs to Buyer pays full invoice SCF Suppliers Bank accepts early amount on due date emerging market suppliers payment requests, (standard payment routines) Platform and pays discounted • Flexible delivery models through platform of invoice choice and utilizing existing framework 8 5 documentation Bank pays IFC full IFC invoice for funded 6 Bank submits request for provides • IFC works with buyers and suppliers on transactions or funding/guarantee coverage funding or the guarantee fee improving sustainability compliance – IFC’s guarantee coverage review includes review of the buyer’s sustainability and Corporate Social Responsibility (CSR) strategy

22 GTSF Deal Highlight

Pioneering a Pricing Model to Drive Supply Chain Sustainability

Through GTSF, suppliers to Levi’s can now access competitively-priced financing based on their environmental, health and safety, and labor standards score. The better the score, the more favorable the financing. And if their scores improve, financing costs decrease.

As customer demand for fair labor and environmentally responsible manufacturing continues to grow, buyers, suppliers and financiers will need to work together to achieve both social compliance and profitability.

23 Trade & Commodity Finance Contact List MANAGEMENT

Hyung Ahn Global Manager Washington, DC +1 202 458 9288 [email protected]

Inho Lee Head, Portfolio and Structured Trade Washington, DC +1 202 458 2709 [email protected]

Makiko Toyoda Acting Head, GTFP Washington, DC +1 202 473 7196 [email protected]

TRADE PORTFOLIO & WORKING CAPITAL SOLUTIONS (GTLP / CCFP / WCS)

Inho Lee Principal Investment Officer Washington, DC +1 202 458 2709 [email protected] Juan Andres Mosquera Senior Investment Officer Washington, DC +1 202 458 5152 [email protected] Heather Miller Operations Officer Washington, DC +1 202 458 5218 [email protected]

STRUCTURED TRADE & COMMODITY FINANCE (STCF, GWFP)

Pierre Ligneul - de Villeneuve Senior Investment Officer Washington, DC +1 202 473 9423 [email protected]

Gregory Lorne Investment Officer Washington, DC +1 202 458 5424 [email protected]

Yoshitomo Tada Investment Officer Washington DC +1 202 458 8306 [email protected]

Lili Wang Financial Officer Washington, DC +1 202 458 9626 [email protected]

Ebrahim Farouk Portfolio Officer Washington, DC +1 202 473 0863 [email protected] SUPPLY CHAIN FINANCE (GTSF)

Nevin Turk Principal Investment Officer Washington, DC +1 202 458 8069 [email protected]

Beatrix Von Heintschel Trade Finance Analyst Washington, DC +1 202 473 0071 [email protected]

Mauricio Cifuentes Operations Assistant Washington, DC +1-202-473-4516 [email protected]

Corinne Harrison Operations Assistant Washington, DC +1-202-473-8812 [email protected] GLOBAL BANKS

Zeynep Ersel Senior Trade Finance Officer Washington DC +1 202 4582502 [email protected]

24 Trade & Commodity Finance Contact List

TRANSACTIONAL TRADE – SUB-SAHARAN AFRICA

Florian Wicht Regional Lead South Africa [email protected]

Alexei Timofti Trade Finance Officer South Africa +1 202 473 8963 [email protected]

Benie Kouakou Associate Trade Finance Officer South Africa +27 83 780 6073 [email protected]

TRANSACTIONAL TRADE – ASIA & THE PACIFIC

Anurag Mishra Regional Lead India +91 77 3870 7535 [email protected]

Gimhani T. Senevirantne Sr. Trade Finance Officer Tailand +66 2 686 6532 [email protected]

Lien Hoai Nguyen Trade Finance Officer Vietnam +84 4 3934 2282 [email protected]

Alok Kumar Trade Finance Analyst India +91 22 4230 2400 [email protected]

TRANSACTIONAL TRADE – EUROPE & CENTRAL ASIA

Aleksey Nikiforovich Regional Co-Lead Russia +7 495 411 7555 [email protected]

Mark Rozanski Regional Co-Lead Washington, DC +1 202 473 4640 [email protected]

TRANSACTIONAL TRADE – MIDDLE EAST & NORTH AFRICA

Ahmed Hanna Trade Finance Officer Egypt +20 2 2461 4275 [email protected]

Zeynep Attar Trade Finance Analyst Turkey +90 212 385 1329 [email protected]

TRANSACTIONAL TRADE – LATIN AMERICA & THE CARIBBEAN

Susanne Kavelaar Regional Lead Argentina +54 11 4114 7229 [email protected]

Raquel Segrera Trade Finance Officer Colombia +57 1 313 6454 [email protected]

Giorgio Felici Assoc. Trade Fin. Officer Argentina +51 11 4114 721 [email protected]

Karla Lopez Flores Trade Finance Analyst Washington, DC +1 202 458 8683 [email protected]

25 Trade & Commodity Finance Contact List

TRANSACTIONAL OPERATIONS

Murat Ayik Sr Trade Finance Officer Turkey +90 212 385 2579 [email protected]

Hande Berdan Associate Trade Finance Officer Turkey +90 212 385 2523 [email protected]

Fide Maksut Trade Finance Analyst Turkey +90 212 385 3094 [email protected]

Ozlem Ates Eraydin Trade Finance Analyst Turkey +90 212 385 3072 [email protected]

Sinan Onat Trade Finance Analyst Turkey +90 212 385 2594 [email protected]

Dharmendra Deepak Operations Officer Washington, DC +1 202 473 8817 [email protected]

Fiona Chen Operations Officer Washington, DC +1 202 458 2545 [email protected]

Virginia Ziulu Assoc. Operations Officer Washington, DC +1 202 473 4410 [email protected]

Jessica Kim Assoc. Operations Officer Washington, DC +1 202 473 6362 [email protected]

Yasser Hassan Operations Analyst Washington, DC +1 202 458 0183 [email protected]