There are two primary aspects to Bank’s role in the GTLP, financial and operational:
- Financial: As the key African regional Participant, the Bank proposes to initially invest up to USD 500 million under the GTLP to promote trade in Africa. Although the GTLP is a global platform for trade finance, the Bank’s contribution will be used exclusively to finance eligible pools of African trade operations (trade operations originating, terminating, or both in an African country). The Bank’s contribution would make it the single largest contributor to GTLP operations in Africa (IFC has earmarked at least 25% of its USD 1 billion contribution for Africa). Even though the direct line of credit structure under the GTLP is similar to the Bank’s own trade finance lines of credit product under the phase 1 of the Trade Finance Initiative, both programs will be managed separately. Lines of credit issued under the GTLP will not count against the USD 500 million initial program ceiling established for phase 1 of the Trade Finance Initiative (TFI). The combined ceiling for phase 1 and 2 of the TFI would be USD 1 billion.
- Operational: The GTLP’s operational modalities are similar to a risksharing agency line of credit (RSAL).5 Under the GTLP, the Bank and other Participants will delegate specified operational decision-making powers to the Agent – in this case the IFC. However, even though the IFC will be responsible for most of the operational aspects of the GTLP on behalf of the Participants, the Bank will still play an operational role by endorsing the UBs that will access the Program at entry. The Bank will also monitor the activities of the IFC as Agent to ensure compliance with the terms and conditions specified in the GTLP agreements. If after the one-year interim review period, the IFC fails to propose qualifying UB Trade Facilities to the Bank (in accordance with the CIAA) and as a result there are undisbursed amounts outstanding, then the Bank reserves the right to cancel such undisbursed amounts, without affecting amounts that have been committed.