Trade Finance Guarantee Facility

Project Description

This summary covers an application by Deutsche Bank AG and/or any of its subsidiaries (Deutsche Bank), and/or other lenders yet to be determined for coverage of a proposed short-term loan facility, focused on supporting trade, to the Government of Angola. The Multilateral Investment Guarantee Agency (MIGA) would provide the lenders with up to €225 million in trade finance guarantees against the risk of non-payment by the Government of Angola. 

The MIGA-covered facility would be used to provide short-term loans for trade-related payments, aimed mainly at supporting the agriculture and healthcare sectors. The tenor of each loan to be made under the facility is up to one year.

Environmental Categorization 

The MIGA-covered facility will support short-term trade payments to suppliers of the Government of Angola. These transactions pose minimal environmental and social (E&S) risks and impacts and as such, the overall portfolio risk is considered low. The project has thus been categorized as ‘FI-3’ under MIGA’s Policy on Environmental and Social Sustainability (2013). 

The applicable E&S requirements for this project are the MIGA Exclusion List and applicable E&S laws in Angola. Deutsche Bank will be responsible for screening the transactions. Deutsche Bank will also be required to comply with the labor standards set forth in MIGA Performance Standard 2: Labor and Working Conditions. 

Development Impact  

The Project is expected to help the Government of Angola unlock new liquidity for trade finance transactions essential for economic development, at a time when the country is facing tight financing conditions. With the MIGA-supported facility, Angola would be able to access trade finance loans at more affordable rates to maintain critical trade activities, which are key to achieving inclusive growth, including imports of essential agriculture and medical items. The Project is also expected to contribute to maintaining market resilience for government-backed trade finance transactions, thereby improving investors’ confidence. 

The Project is aligned with the priorities set under the MIGA’s FY24-26 Strategy and Business Outlook, as it will support the expansion of trade finance (a new product innovation for MIGA). The Project is also consistent with MIGA’s crisis response strategy, of providing countercyclical support in times of crisis.