The Export- Import Bank of the United States (Ex-Im Bank) has approved an insurance policy for agricultural export financing specialist CoBank to provide up to US$180 million in letters of credit (L/Cs) to support US exports to Iraq.

The insurance will be used to support trade financing from CoBank, which is a co-operative bank and part of the US Farm Credit System.

Agricultural commodities

Under the policy, Ex-Im Bank will support L/Cs issued by the Trade Bank of Iraq (TBI) in favour of US exporters to purchase bulk agricultural commodities, including an estimated US$27 million a month in rice and wheat shipments.

The policy was written under Ex-Im Bank's US$500 million short-term insurance programme for the TBI. This programme provides for bank L/C insurance policies.

Other support

Ex-Im Bank also can support US exports to Iraq through its Working Capital Guarantee Programme under which it will consider applications to support pre-export activities of subcontractors operating under US government-funded reconstruction projects.

In addition, Ex-Im Bank will consider applications for financing of US exports to Iraq under its loan guarantee, working capital and credit insurance programmes if there is a creditworthy source of repayment in a third country.

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