One of the world’s largest physical commodity trading groups specialising in energy, metals & minerals approached us for securing lines on Commercial Bank of Ethiopia (CBE) in the international banking market. The company had been a regular supplier of petroleum products to the Ethiopian government under annual term contracts for the past few years.
Given their high profile and pedigree, the company had excellent networks with a large number of international banks and investors. Also, they had the market know-how on Ethiopian risk given their experience in recent years. However, there was limited capacity available in the market for CBE given Ethiopia’s economic challenges and civil war in the North. This capacity had been already fully utilised by the company and others active in the market.
The challenge for us was to come up with new solutions involving new banks or novel structures. Over the next 6 months, we researched the market extensively and came up with a first-of-its-kind innovative solution creating a USD100Mn+ capacity/ 400 days tenor coverage in the market for Ethiopia and in particular, CBE. Needless to say, the company was highly impressed and appreciative of our skill and expertise.
Since then, we have specialised in covering Ethiopian banks risk under Letters of Credit and helped a number of international trading companies in successfully bidding and winning Ethiopian government tenders for supply of a variety of products such as sugar, fertilisers etc