The International Finance Corporation, a member of the World Bank Group, has decided to extend an unfunded short-term facility to Global IME Bank, one of Nepal’s largest commercial banks, under its Global Trade Finance Program.
A portion of the portfolio will be allocated to Climate Smart Trade Finance, IFC’s first green trade finance line in the world.
Joon Young Park, regional manager for IFC Financial Institutions Group South Asia, said this is IFC’s first global partnership in climate finance.
Ratna Raj Bajracharya, CEO of Global IME Bank and Joon Young Park, signed the agreement on behalf of their respective organizations.
The Global Trade Finance Program is IFC’s response to the lack of trade finance restrictions in developing countries such as Nepal, and the project will assist the Global IME Bank in addressing the supply and demand gap in its growing trade business. Yes, the bank said in a statement.
Including a “green” component in this global trade finance program is a strong value proposition for banks to make climate trade business responsive to the need of the hour, the statement said.
On the occasion, Chandra Prasad Dakar, Chairman of Global IME Bank, said the agreement will be a roadmap for climate-friendly trade finance in Nepal.
“This funding will enable Global IME Bank to connect with more global confirming banks with better capabilities, enabling banks to process more transactions for customers in different regions. “In fact, it fits into our strategic agenda because it has a climate component.”
Babacar S Faye, IFC Resident Representative in Nepal, said: “While addressing the shortage of trade finance in Nepal, the facility will help combat climate change by supporting the adoption of energy efficient technologies, ensuring operational sustainability and reducing carbon emissions. We are also focused on addressing the impact.”
He said that IFC currently has partnerships in the areas of trade and finance, but will expand into other areas such as energy, manufacturing and agriculture in the future.
This is the second partnership between IFC and Global IME. In 2019, IFC invested his $20 million in banks to support SMEs.