Russia, Azerbaijan, Tajikistan, Kazakhstan and Bosnia Herzegovina have emerged as frequent users of guarantees provided under the European Bank of Reconstruction and Development's (EBRD's) programme that guarantees letters of credit (L/C) and other trade finance instruments.

The bank's Trade Facilitation Programme (TFP) has now supported around EUR 4 billion of transactions since it was set up to kick start import and export flows after the 1998 Russian financial crisis.

Lead countries

In the two years to end-2007 Russia led the way, notching up 285 separate deals under the TFP. Transactions involving Azerbaijan featured 123 times while 119 deals involving Tajikistan, 109 transactions with Kazakhstan and 100 financings with Bosnia Herzegovina were closed in the same period.

Russia, Kazakhstan, Ukraine, Georgia and Azerbaijan emerged as the top five countries in terms of trade volumesguaranteed by the TFPaccording to EBRD figures.

Volumes up

According to the latest EBRD figures for the 29 countries in its area of operation, the total volume of transactions financed by the TFP in 2007 increased to EUR 781 million from EUR 707 million in 2006.

Under TFP, guarantees may be used to secure payment of several types of documentary credits - including L/Cs and standby L/Cs from the issuing bank; deferred payment and "red clause" L/Cs - issued or guaranteed by issuing or confirming banks for trade transactions to, from or between the EBRD's countries of operations.

The scheme may also support advance payment guarantees and bonds as well as several other types of trade finance instruments.

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