Uzbekistan's largest lender, Uzpromstroybank, has become a participant in the International Finance Corporation's (IFC's) Global Trade Finance Programme (GTFP) under which the World Bank Group member will guarantee letters of credit (L/Cs) and other trade finance instruments.

IFC is providing a US$20 million trade finance guarantee facility with the aim of supporting Uzbekistan-based exporters and importers and protect the nation's cross-border trade from the impact of the coronavirus pandemic, IFC has said.

Scope of guarantees

GTFP offers confirming banks partial or full guarantees to cover payment risk on banks in emerging markets.

These guarantees are transaction-specific and apply to L/Cs, trade-related promissory notes and bills of exchange, bid and performance bonds, advance payment guarantees, and supplier credits for the import of capital goods. IFC also provides funding to banks for short-term pre-export financing.

EBRD support

Last month the European Bank for Reconstruction and Development (EBRD) said it is providing a US$40 million loan to Uzpromstroybank for on-lending to Uzbekistan's growing private sector.

The EBRD financing will support the growth and expansion of the operations of small and medium-sized businesses in the country.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.