Jeddah, Kingdom of Saudi Arabia: The Islamic Development Bank (IsDB) and the International Islamic Trade Finance Corporation (ITFC) have signed an Agency Agreement to facilitate the implementation of COVID-19 Restore Program (R2) through providing trade finance and line of finance operations in member countries.
The agreement also aims to facilitate the implementation of IsDB’s new business model and the objectives of the President’s 5-Year Program (P5P); and further boosts the ongoing efforts to mitigate the adverse impact of the pandemic and put economies on a faster recovery path.
Speaking on the occasion, IsDB President, Dr. Bandar Hajjar, said: “innovative solutions are necessary to shift the focus to the private sector and make global markets work for development. This requires getting out of our comfort zone as we cannot rely on the public sector alone to improve our member countries' economic outcomes.”
He further noted that the IsDB Group counts on its private sector entities to capitalize on their network to complement and scale up IsDB Group’s vision and strategy with the same determination and push the boundaries of development finance.
“The COVID-19 crisis has forced us to have a second look at our resources and see how we can use them differently to be by the side of our member countries in this historic moment,” he added.
The IsDB President also commended ITFC CEO, Eng. Hani Salem Sonbol for his relentless efforts to support the implementation of the P5P vision adding that ITFC has, indeed, proven instrumental in supporting the Strategic Preparedness and Response Package (SPRP) Program since the very start.
“Under his leadership, ITFC successfully and seamlessly disbursed US$250 million under IsDB’s Response Program (R1), demonstrating a strong response to the initiative at this critical time,” he stated while expressing confidence that based on this very positive experience, ITFC has the capacity to repeat the impressive results in the implementation of the R2 program, as well.
ITFC CEO, Eng. Hani Salem Sonbol, meanwhile, commented: “This agreement marks another milestone in further boosting existing synergy to meet the IsDB Group’s COVID-19 Response Strategy under R2. Since its establishment in 2008, ITFC has been dedicated itself to serving its member countries by providing US$55 billion of trade financing to date supporting various sectors of the member countries’ economies. With the outbreak of COVID-19, ITFC adopted a two-pronged approach aimed at supporting member countries to counter the socio-economic challenges including a Rapid Response Initiative and a Recovery Response Program. During 2020, ITFC was able to respond to the needs of member countries with US$605 million financing approvals to support procurement of essential goods. Today, this agreement marks the confidence that IsDB has for ITFC to continue with its mandate to help member countries overcome and recover from the impact of the pandemic on their economies by providing trade finance solutions to private sector entities, financial institutions and government agencies to help in advancing their trade and improve their lives”
About the ‘Strategic Preparedness and Response Package (SPRP)
The IsDB Group acted swiftly to launch a ‘Strategic Preparedness and Response Package (SPRP) to support member countries mitigate the impact of the COVID-19 Pandemic. The Response Package of US$2.3 billion adopts a holistic approach focusing on short, medium, and long-term needs. The Response Package is designed under the “3Rs” Framework: ‘Respond, Restore, and Restart’ Tracks.
- Respond Track (R1) provides immediate support by focusing on strengthening health systems and dealing with emergency needs; building capacity in production of testing kits and vaccines; and building Pandemic Preparedness Capacity.
- Restore Track (R2) focuses on medium-term actions through financing trade and SMEs, to sustain activity in core strategic value chains, and ensure continuity of the necessary supplies, mainly to health and food sectors and other essential commodities.
- Restart Track (R3) will deliver long-term support to build resilient economies on solid foundations and catalyse private investment by supporting economic recovery and growth.
© Press Release 2021
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