Absa seals $150 million facility with British International Investment

ABSA has secured a $150 million facility from British International Investment (BII) plc as part of its mission to help close the trade finance gap in Africa.

BII is the UK’s Development Finance Institution (DFI) and impact investor, focused on providing patient capital to foster productive, sustainable, and inclusive economies. Absa, as the borrower in this transaction, will utilise the funds to support this objective, with a specific focus on the African continent.

Head of FI Trade Sales (International), Risk Distribution, and Syndication at Absa CIB, Mosa Tshabalala, said: “Our unyielding commitment to the success of the continent continues to drive us to find solutions to serve our customers by addressing Africa’s trade finance gap, focusing on sustainable funding.”

“Our role as a Pan-African bank is to channel the funds to reach our client base across our chosen markets. We continue to forge partnerships with DFIs, insurance companies, other commercial banks (locally, regionally, and globally), ECAs, and institutional investors to drive market access and provide the funding necessary to support our customers’ growth ambitions.”

Africa’s trade finance gap is estimated to be between $100 billion and $120 billion. By partnering with BII, Absa is making strides in advancing the efforts of the African Continental Free Trade Area (AfCFTA) agreement, which aims, among other objectives, to reduce the continent’s trade finance gap.

In addition, this transaction enables Absa to extend liquidity to clients across various geographies and trade product sets that are in high demand.

These funds are ring-fenced for financing trade transactions, with a focus on sustainable funding. This includes but is not limited to, supporting small and midsize enterprises (SMEs) founded by youth and women engaged in intra-African and global trade.

This aligns with Absa’s goal of concluding R100 billion in sustainability-related transactions by 2025.

Interim Group Chief Executive Officer at Absa, Charles Russon, said: “Our extensive presence across the continent, combined with our global reach, enables us to facilitate the flow of capital and trade finance that African businesses need to scale and compete internationally. By leveraging our cross-border expertise and strategic partnerships, we are driving sustainable growth and creating new opportunities in emerging markets, contributing to the broader development of Africa’s economic ecosystem.”

Absa’s long-standing partnership with BII reflects the depth of their relationship and shared vision for driving growth in emerging markets. Since 2019, the partnership has provided much-needed trade liquidity in countries such as Ghana, Nigeria, Kenya, Uganda, Tanzania, and Mozambique – supporting over $1 billion in trade volumes, including throughout the COVID-19 pandemic, which severely strained trade liquidity in Africa.

The UK’s Development Minister, Anneliese Dodds, said: “I am happy to see BII support Absa through this important facility, which is part of a long-standing partnership to help fill Africa’s estimated $100 billion to $120 billion trade financing gap. Today’s signing demonstrates BII and Absa’s continued commitment to addressing that pressing challenge together, focusing on sustainable and inclusive economic growth.”