Ibrahim Fibres: Trade coverage of €110m extended

Four leading financial institutions, including a local bank, have completed a landmark trade transaction that will help boost the country’s textile industry.

The Asian Development Bank (ADB), International Finance Corporation (IFC), Citibank and MCB Bank have provided trade finance coverage of up to €110 million to Ibrahim Fibres Limited for the import of state-of-the-art German machinery, the ADB website announced on Wednesday.
The machinery will be used to produce polyester staple fibre (PSF) and polyester chips and will more than double the company’s polyester production to 1,250 tons per day.
Ibrahim Fibres is part of the Ibrahim Group, which is involved in a range of businesses, including textile manufacturing, power generation and financial services.

By providing guarantees that cover the payment risk in trade transactions, ADB’s Trade Finance Programme and IFC’s Global Trade Finance Programme help increase trade finance and the flow of goods to and from emerging market countries.

For this transaction, IFC assumed 30 per cent of MCB Bank’s risk and ADB 19 per cent. Citibank managed the balance against the original letter of credit established by MCB Bank.