Project Description
This summary is for a potential MIGA guarantee to be issued to Deutsche Bank AG (DB) to support a portfolio of trade transactions facilitated via State-Owned Banks and Central Banks (Obligors) in Emerging Markets and Developing Economies (EMDEs). MIGA would issue Trade Finance Guarantees (TFG) of up to EUR 1 billion against the risk of non-payment by Obligors for over a period of 3 years (with a potential 3-year extension).
Environmental Categorization
The MIGA-covered facility will support short-term trade transactions in EMDEs. These transactions pose minimal environmental and social (E&S) risks and impacts and as such the project has 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, applicable E&S host country’s laws and sector specific screening as applicable. The project will not support coal and non-RSPO palm oil related activities, among others. 1 The project will also be required to comply with the applicable labor requirements specified under MIGA Performance Standard 2: Labor and Working Conditions.
DB’s has a Sustainable Finance Framework and an E&S risk management process which includes trade-related transactions. MIGA will have the ability to exclude or suspend from participating in the project any SB based on their E&S performances and ability to implement MIGA E&S requirements.
Development Impact
MIGA interventions will contribute to positive development impact through the facilitation of trade in developing countries, where acute trade finance gaps persist, especially in fragile and conflict-affected settings and for micro, small and medium enterprises (SMEs). It has been widely acknowledged that trade is a driver of economic productivity, wage growth, and resilience. Through partnering with DB, MIGA will facilitate needed trade finance amid challenging global and national macroeconomic conditions, with high replication potential.
1 Activities with significant E&S concerns such as (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant occupational health and safety risks.
