IFC and Citi launch $2 billion trade finance lifeline for emerging markets

IFC, the World Bank Group member focused on private-sector development, will provide guarantees of up to $1 billion, with Citi committing an equivalent amount.

The International Finance Corporation (IFC) and Citibank, N.A. (Citi) have announced a trade finance facility of up to $2 billion to expand lending to businesses across emerging markets. The partnership will support corporate clients and small and medium-sized enterprises in sectors that contribute to economic growth and job creation. Its focus is on countries where scarce and expensive trade financing limits companies' ability to import supplies, fulfil customer orders and hire workers.

IFC, the World Bank Group member focused on private-sector development, will provide guarantees of up to $1 billion, with Citi committing an equivalent amount. The combined facility is expected to reach more than 100 companies over the next three years, providing financing to support their trading activities. Operations will initially cover multiple countries across Africa, Asia and Latin America, with expansion into additional markets planned.

The agreement responds to a global trade finance gap estimated at $2.5 trillion, concentrated in developing economies where businesses face some of the toughest barriers to affordable funding. For companies dependent on imported materials or payments tied to international orders, restricted financing can interrupt production and limit opportunities to grow. By sharing lending risk, IFC and Citi intend to increase the funding available to businesses facing these constraints.

Guarantees create capacity for additional business lending

IFC's guarantees will free up capacity on Citi's balance sheet, enabling the bank to provide additional loans to businesses across the target markets. Mohamed Gouled, IFC Vice President for Products and Clients, said trade finance offers a direct way to strengthen supply chains and support economic growth, with IFC acting as a risk partner to extend Citi's reach. He also described the arrangement as a structure that other global banks could adopt to increase financing for companies that create jobs in emerging economies.

At least $500 million will support sectors with climate benefits

Using the capacity released by IFC's guarantees, Citi will provide at least $500 million of its own trade financing to companies operating in sectors with climate benefits. Eligible activities include water and sanitation infrastructure, renewable energy, energy-efficient manufacturing and sustainable agriculture, connecting access to working capital with investment in more sustainable economic activity. Adoniro Cestari, Citi's Global Head of Trade and Working Capital Solutions, described the facility as a first-of-its-kind initiative that advances the bank's sustainable lending commitments and provides liquidity and working capital to clients in developing countries.

Partnership builds on $65 billion in emerging-market trade

Citi Global Head of Public Sector Banking Stephanie von Friedeburg said IFC's participation would strengthen the bank's ability to serve a broader range of businesses in markets where financing constraints restrict growth. She linked that expanded access to the employment and economic activity supported by those companies, identifying emerging-market trade finance as a strategic priority for Citi. The new facility extends a relationship that has financed approximately $65 billion in emerging-market trade since 2006 through IFC's Global Trade Finance Program and Global Trade Liquidity Program, including $8.6 billion in countries supported by the International Development Association (IDA).