OREANDA-NEWS. On July 16, 2009 The European Bank for Reconstruction and Development has approved a 10-fold increase in the amount of foreign trade that Belgazprombank, one of Belarus’s leading banks, can finance. Its maximum exposure at any one time to foreign trade deals under the EBRD’s Trade Facilitation Programme (TFP) has now been raised to US10 million. The previous limit was US 1 million, reported the press-centre of EBRD.

The EBRD launched its TFP initiative in 1999 in order to revive east-west trade which had collapsed in the aftermath of the Russian financial crisis a year earlier. Over 8,200 trade deals worth over EUR5.2 billion (US7.3 billion) have since been facilitated through this EBRD programme, including 194 transactions in Belarus worth EUR 200 million (US 280 million).

At a time when trade finance is scarce as many foreign banks take a more cautious approach to providing this type of facility, the increase will help Belgazprombank both to meet rising demand and provide support for its local clients, especially the small and medium businesses. These have everywhere been particularly hard hit by the current market turmoil.

As part of its global anti-crisis response, the EBRD has been making extra trade finance volumes available for some of most active issuing banks participating in its Trade Facilitation Programme, including Belgazprombank, one of five Belarus banks taking part in this EBRD initiative.

Belgazprombank joined the programme in 2004 and has so far used it to finance foreign trade transactions worth over EUR 2.3 million (over US3 million).

The programme supports trade involving the EBRD’s 30 countries of operations. By providing guarantees to confirming banks for the payment of various trade finance instruments issued by local banks, this EBRD programme allows participating banks to reduce the cash they would otherwise be required to deposit as collateral, thus freeing up their working capital.