International Finance Corporation, a member of the World Bank Group, has decided to extend an unfunded short-term facility under the Global Trade Finance Programme to Global IME Bank, one of the largest commercial banks in Nepal.
A portion of the portfolio is allocated towards climate-smart trade finance, the first IFC green trade finance line globally.
Joon Young Park, regional manager of IFC Financial Institutions Group South Asia, said this was IFC’s first-ever partnership in climate finance in the world.
Ratna Raj Bajracharya, CEO of Global IME Bank and Joon Young Park, signed the agreement on behalf of their respective organisations.
The Global Trade Finance Programme is IFC’s response to the shortage of trade finance limits in developing economies such as Nepal and the project will support Global IME Bank in addressing the demand and supply gap for its growing trade business, the bank said in a statement.
Inclusion of the “green” component in this Global Trade Finance Programme is a strong value proposition for the bank to do climate trade business responding to the need of the hour, the statement reads.
Speaking on the occasion, Chandra Prasad Dhakal, chairman of Global IME Bank, said that the agreement would be a roadmap for climate-smart trade financing in Nepal.
“This fund will allow Global IME Bank to connect with more global confirming banks with a better capacity which will help the bank to process more transactions for its clients in different geographies,” said Bajracharya, the CEO. “In fact, this fits into our strategic agenda as it has a climate component to it.”
“This will help the bank better address the growing demand for trade finance in Nepal,” said Babacar S Faye, IFC’s Resident Representative in Nepal. “While responding to Nepal’s shortage of trade finance, this facility also focuses on addressing the impact of climate change, by supporting the adoption of energy-efficient technologies, ensuring the sustainability of operations, and cutting carbon emissions.”
He said that IFC has now had partnerships in trade and finance, but it would go into other sectors such as energy, manufacturing and agriculture, among others in the days to come.
This is the second partnership between IFC and Global IME. In 2019, IFC invested $20 million in the bank to support SMEs.