Proparco, a subsidiary of Agence Française de Dévelopement Group, has signed a US$10 million Trade Finance Guarantee with Ecobank Malawi — an agreement that will enable the Pan-African bank to secure confirmation lines on Letters of Credit for importation of strategic commodities such as fertilizers, basic foodstuffs and strategic raw materials.
A statement from Ecobank Malawi says the Trade Finance Guarantee will thus help to facilitate the development of trade relations between Malawian importers and international exporters — a crucial enabler for country’s economic growth.
Proparco guarantees suppliers against the risk of non-payment, thereby strengthening the capacity of Malawi’s importers and it primarily covers fertilizer imports for small-scale agricultural producers as well as other products such as fuel, critical commodities, equipment goods, among others.
The statement further says the facility forms part of the Food & Agriculture Resilience Mission (FARM) initiative launched in 2022 by President of the French Republic, Emmanuel Macron, alongside the European Union, the G7 and the African Union — aimed at ensuring food security in the most vulnerable countries.
It will provide a strong response to Malawi’s food insecurity challenges, exacerbated by the Russia-Ukraine war and Cyclone Freddy in February 2023.
With Ecobank Malawi Limited, a subsidiary of Ecobank Group, Proparco has built a solid, reliable and dynamic partnership over the years.
This follows a pilot Trade Finance project launched in 2017 with Ecobank Group subsidiaries in Guinea and Côted’Ivoire (and their French subsidiary as confirming bank) and Proparco says it is happy to be expanding this partnership with the Ecobank group in Malawi.
The signing ceremony took place in Lilongwe that was graced by Chrysoula Zacharopoulou, French Minister of State for Development, Francophonie & International Partnerships; French Ambassador to Malawi, David Martinon; Regional Director for Southern Africa of Agence Française de Dévelopement (AFD), Audrey Rojkoff and Symon Msefula, Board chairperson for Ecobank Malawi.
Zacharopoulou said: “France’s commitment for food security is long lasting and wide-ranging. As we aim at reinforcing our partnership with Malawi, I am delighted that one of the first actionable solutions we will roll out precisely targets SDG 2 – Zero Hunger — through the guarantees provided by our operator Proparcor to Ecobank Malawi.”
On his part, Ecobank Malawi Managing Director, Dr Raymond Fordwuo, said the emphasis on fertilizer underscores their commitment to supporting sectors crucial for Malawi’s economic development.
“By facilitating the importation of this strategic commodity, we contribute not only to the growth of businesses and the agri-sector, but also to the overall prosperity and well-being of the Malawian people.
“This initiative is a testament to Ecobank Malawi’s vision of being a key player in fostering economic growth and facilitating trade. We are not merely a bank — we are a partner in progress, dedicated to shaping a future where Ecobank is synonymous with excellence in trade facilitation.”
Steven Gardon, Regional Director for Southern Africa and the Indian Ocean at Proparco, said: “We are very pleased to extend our partnership with the Ecobank Group in Malawi. This will help strengthen economic resilience and food security in the country.
“This project is in line with Proparco’s 2023-2027 strategy: ‘Acting Together for Greater Impact’, which aims to improve access to economic opportunities and strengthen the resilience of local economic systems.”
The project will have a positive impact on food security, poverty reduction, decent work and economic growth — thus contributing to the achievement of three sustainable development goals: SDG 1 (eradicate extreme poverty), SDG 2 (zero hunger) and SDG 8 (develop a universal partnership for development).
Proparco has been working with the private sector for over 45 years for a more just and sustainable world and with an international network of 23 local offices, Proparco works closely with its partners to build sustainable solutions in response to environmental and social challenges in Africa, the Middle East, Asia and Latin America.
Proparco benefits from sector-based expertise as well as a wide range of financial solutions tailored to the different stages of business development, notably thanks to its Digital Africa subsidiary, and its Propulse technical assistance offering designed to scale up the impacts and performance of its partners.
Proparco’ s new strategy; ‘Acting Together for Greater Impact’ 2023-2027 enables, strengthens and amplifies the different ways in which it works with its partners.
Ecobank Malawi is an affiliate of the Ecobank Group, the leading private pan-African banking group, which offers a comprehensive suite of financial services and solutions to the consumer, commercial, corporate and investment banking clients at over 8 branches, 26 ATMs and 194 Xpress Point agencies.
The Ecobank Group was established in 1985 to drive financial integration and socio-economic development in Africa and with a presence in 35 sub-Saharan African countries, as well as in France, the UK, UAE and China.
It has unrivalled expertise and experience across Africa and its Pan-African platform provides a single gateway for payments, cash management, trade and investment across Africa and beyond.