Media Contact in Washington: Aby Toure (202) 473 8302 akonate@worldbank.org Media Contact in Washington: Herbert Boh (202) 473 3548
hboh@worldbank.org
Washington, May 31, 2005 – The World Bank Board of Executive Directors today approved an International Development Association (IDA) credit* of US$7.5 million to the republic of Burundi and US$5 million to the African Trade Insurance Agency to provide additional funds for the ongoing Regional Trade Facilitation Project. The original Regional Trade Facilitation Project was approved in April 2001. Its overall objective is to contribute to poverty alleviation through private sector led growth in participating countries by improving access to financing for productive transactions and cross-border trade. It also aims to bring together a group of countries in the Southern and Eastern African regions that are willing to address the market’s perception of risk in Africa by setting up a credible insurance mechanism. The supplemental credit approved today will allow the African Trade Insurance Agency (ATI) to continue operating, while strengthening the institution so that it can expand the size and scope of its business in the future. The credit for Burundi will assist in financing Burundi’s Insurance Facility to ensure that it has adequate insurance capacity to continue to meet the demand for its products. “Supporting ATI’s continued operations with the supplemental credit will enable the Agency to consolidate private insurers’ provision of political and credit risk insurance in ATI member countries, which in turn increases the sustainability of the project” said Sherri Archondo, the World Bank Task Team Leader for the project. “ATI’s insurance in Burundi has attracted foreign financing for projects totaling around US$20 million involving the largest employer in Burundi, housing finance, and equipment for the telecommunications company”, Archondo added. The project will increase regional and international financing flows for enterprises involved in cross-border trade. It addresses the concerns of investors regarding a lack of continuity of government policy by providing insurance against the risk of a change in policies which would negatively affect business. The African Trade Insurance Agency currently has eleven member countries: Malawi, Zambia, Tanzania, Uganda, Rwanda, Burundi, Kenya, Eritrea, Djibouti, Madagascar and Democratic Republic of Congo and anticipates increasing its membership to include countries in West and Central Africa. * The credit is provided on standard International Development Association (IDA) terms, with a commitment fee of 0.35 percent, a service charge of 0.75 percent over a 40 year period of maturity which includes a 10-year grace period. For more information on the World Bank’s work in sub-Saharan Africa visit: http://www.worldbank.org/afr For more information on the World Bank’s work in Burundi visit: www.worldbank.org/afr/bi For more information about this project visit: http://web.worldbank.org/external/default/main?pagePK=64002413&piPK=64002405&theSitePK=258644&menuPK=258672&Projectid=P089100 |
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