African Export Bank (Afrexim Bank), a pan-African multilateral finance institution that finances trade within and outside Africa, has advised local firms to partner with it to expand and promote their businesses on the continent.
Afrexim Bank business development manager for the Southern African Region Kenneth Tafadzwa Ruredzo made the appeal in an interview last week in Blantyre.
Afrexim Bank was one of the financiers at the first-ever Financiers Networking Forum in Blantyre, which was held to drum up support for the forthcoming Malawi Investment Forum (MIF) 2016 to be held in October.
The bank provides services such as project and export development, structured trade finance, syndications and specialised finance, investment banking programme and advisory services.
Ruredzo said the bank has a number of areas which local businesses can exploit with finance from the bank.
He cited hotels development financing, which includes refurbishment and redevelopment of existing hotels; expansion of air, road and rail transport, power transmission and market networks.
This could be good news to the private sector as project financing has remained one of the challenges that hinder some major projects including infrastructure.
Malawi does not have a a development bank something experts argue has created a vacuum in project financing.
Minister of Finance, Economic Planning and Development Goodall Gondwe is on record having said that plans are in the pipeline to establish a development bank and an agriculture bank to provide alternative to project financing.
Ruredzo said Afrexim Bank is ready to partner local businesses in various sectors both in the short, medium and long-term.
He said: “The construction and tourism facility is aimed at promoting the development of tourism projects and facilities in Africa to international standards, and on a commercial basis, through a risk sharing arrangement that leverages Afrexim Bank’s strong credit standing and its preferred creditor status in its member counties.
“Through this product, Afrexim Bank is able to transfer the construction risk to parties best able to bear them such as contractors, local banks with good local knowledge while it retains the operating risk which it is well equipped to manage.”
Ruredzo said through the project-related financing programme, the bank provides limited recourse financing in support of export projects, including mining, manufacturing and related projects and infrastructure projects that facilitate exports or that generate trade infrastructure services such as power, ports, and telecommunications.
At the same conference, Overseas Private Investment Corporation (Opic), a United States government’s development finance institution, also expressed its commitment to working with Malawian companies.
Opic director of business development Peter Ballinger said they have the capacity to provide medium to long-term funding through direct loans and loan guarantees to eligible investment projects.
The forum attracted global financial institutions such as PTA Bank, African Development Bank (AfDB) and Industrial Development Corporation (IDC) of South Africa.