The Bank’s Corporate Banking & Trade Finance Unit provides financial products to private and public sector organizations to catalyse investment in infrastructure. Each Client is allocated a dedicated and experienced Relationship Manager who will be the contact person and will look after the Client’s business needs. The Relationship Manager strives to understand the Client’s business requirements thus offering a one stop service. The Bank’s lending is focused on commercially viable infrastructure related projects in the following sectors:-
- Energy and power supply
- Water and Sanitation
- Transport and Logistics
- ICT, and
- Housing Bulk Infrastructure.
Please note that the IDBZ reserves the right to accept or reject any application after it has gone through the Bank’s internal review and approval processes.
The range of products offered include the following:-
i) Structured Finance Packages
ii) Pre and Post Shipment finance to Exporters and Importers
iii) Bank Guarantees
iv) Bankers’ Acceptances
v) Asset based loans
vi) Bid Bonds
Structured Finance Packages
IDBZ’s trade finance services are designed for corporate clients within the infrastructure value chain of the targeted sectors; energy, transport, water and sanitation, housing and information communication technology.
The pricing of the facility is specific to the transaction taking into account the risk profile of the transaction and the borrower. Certain charges and fees are payable in addition to the interest rate levied in the facilities. The Bank’s Corporate & Trade Finance Unit specialises in putting in place different structures to suit different clients’ needs for mutually beneficial relationships.
A bank guarantee is a facility that protects a project owner from financial loss should the contractor fail to fulfil the contract in accordance with the terms and conditions. The guarantees come in different forms as follows:-
- Bid / Tender Bond
This facility provides financial assurance that the bid has been submitted in good faith and that a contractor will enter into a contract at the amount bid, and will provide the appropriate performance and payment bonds. This type of guarantee is mostly used by project owners to pre-qualify contractors submitting proposals.
- Performance Guarantee
This facility is granted to a contractor to guarantee performance of the terms of a contract. The aim is to protect the project owner from financial loss should the contractor fail to perform the contract in accordance with its terms and conditions.
- Advance Payment Bond
The facility protects the project owner in cases were an advance amount is paid to the contractor to start work. In the event that the contractor fails to deliver, the project owner will have recourse to the bank.
- Maintenance Bond
This facility guarantees the upkeep (maintenance) of the completed project for a specified period of time after completion. It is designed to protect the project owner from defective workmanship and/or materials.
Pre-shipment finance is working-capital finance that is provided to an exporter, on a “with-recourse basis” against either a confirmed export order from the customer’ s end buyer or against a Letter of Credit. As the exporter, the customer may require working capital finance to purchase goods or raw materials for subsequent manufacturing of final goods. Since the customer has an Export Order the cost of financing will invariably be much cheaper than an overdraft. With a lower cost of financing, the customer may be able to negotiate better contract terms with the buyers vis-a-vis competitors.
This has become a popular credit facility with IDBZ clients who are implementing agents in most government infrastructure projects. The Bank provides the borrower with a short term loan against approved Interim Payment Certificates (IPC). The loan would be paid off upon receipt of the payment from Government. The tenure of the facility could be for a period of up to one year. Bridging Loans are a structured form of borrowing usually made in one amount.
Asset Based Loans
IDBZ also offers Asset Based Loans to its Clients for the acquisition of machinery and equipment and the asset is used as the collateral. The tenure of these loans is up to 24 months with monthly or quarterly repayments in line with the business’ cash flows.
Infrastructure Value Chain Financing (IVCF)
Infrastructure value chain financing is the provision of financial services and products to the energy, water and sanitation, transport, ICT and housing sector players to address growth constraints.
For these and other products and services Contact our Corporate Banking & Trade Finance Department and discover the benefits of personalised financial solutions for your business.