Turkey looks set to join the group of countries of operations to benefit from the European Bank of Reconstruction and Development's (EBRD's) Trade Facilitation Programme (TFP).

The TFP is widely regarded as one of the more successful innovations by a development bank and provides guarantees for several types of letters of credit (L/Cs) as well as other types of trade finance.

Decision-making

The EBRD's board of directors decided on 23 September that Turkey should become a recipient of EBRD investments, pending final confirmation by the bank's board of governors.

The governors will make a final decision by the end of October 2008.

Revised arrangement

Turkey has been a shareholder of the EBRD since the bank was founded in 1991 and made a request in April this year for a change in its EBRD status to become a country of operations.

Its application said the EBRD could contribute to the development of entrepreneurial and open-market initiatives in a wide range of sectors across Turkey, and such a change would be "immensely beneficial for the bank as well as for Turkey".

Focus areas

A particular emphasis would be placed on investments outside main metropolitan centres.

A high priority would be placed on supporting the development of agribusiness and promoting energy efficiency.

Promoting foreign trade

The TFP promotes foreign trade with the EBRD's countries of operations from central Europe to central Asia.

Through the TFP, the EBRD provides guarantees to international confirming banks on any genuine trade transaction, including documentary L/Cs, trade-related standby L/Cs from issuing banks, deferred payment L/Cs and "red clause" L/Cs.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.