African Development Bank Signs $10.75 Million Trade Finance Deal in Djibouti

The African Development Bank has signed a US$10.75 million Trade Finance Transaction Guarantee Facility with Intercontinental Investment Bank, known as iib East Africa, a licensed institution headquartered in Djibouti. The facility, signed on 23 June 2026, will let iib East Africa expand its trade finance services for small and medium-sized enterprises and women-owned businesses across the country. The Bank's support is also intended to help Djibouti's economy finance imports of equipment for renewable energy, manufacturing and telecommunications, along with essential goods needed to meet short-term domestic demand.

Up to 100 Percent Risk Coverage for Local Trade

Under the agreement, the African Development Bank can provide up to 100 percent risk coverage to confirming banks, making it easier for them to confirm letters of credit and other trade finance instruments issued by iib East Africa on behalf of Djiboutian SMEs and women-led businesses. "This facility will enable the African Development Bank to provide up to 100% risk coverage to confirming banks, thereby facilitating the confirmation of letters of credit and other similar trade finance instruments issued by iib East Africa on behalf of Djiboutian SMEs and women-led businesses," said Lamin Drammeh, Manager of the Trade Finance Division at the African Development Bank Group. Alex Mubiru, the Bank's Director General for the East Africa Region, said the deal was aligned with the institution's ambition to expand direct support to the private sector in Djibouti, adding that it would help iib East Africa sustain thousands of jobs tied to SME activity.

More Than 70 Percent of Djibouti's Workforce Relies on SMEs

For iib East Africa, the partnership marks its first direct arrangement with the Bank. Sohail Sultan, Chairman of the Board of Directors of Intercontinental Investment Group Holdings, welcomed the deal as a way to address a persistent financing gap. "Our role goes beyond the allocation of capital; we are committed to systematically dismantling the barriers that constrain the true engine of Djibouti's economic growth, its SMEs," he said. "More than 70% of the country's workforce depends on these businesses, and closing this financing gap is not simply an option but an economic imperative." He added that the facility would give entrepreneurs, particularly women, access to hard-currency financing to invest in productive sectors while strengthening the resilience of national supply chains against external shocks.

A Bank Built for the Ethiopia-Djibouti Corridor

iib East Africa also maintains a representative office in Addis Ababa, Ethiopia, and serves corporate and institutional clients along the Ethiopia-Djibouti corridor, one of the busiest trade routes in the Horn of Africa given landlocked Ethiopia's reliance on the Port of Djibouti for the large majority of its imports and exports. The bank is part of iibGroup Holdings, a diversified investment and banking group operating across East Africa, the Middle East, West Africa and the Caribbean, with a mandate that includes commercial banking, structured investment and advisory work in trade, digital infrastructure and financial inclusion.

The new guarantee facility builds on a trade finance instrument the African Development Bank launched in 2021 to support commercial banks across the continent. It covers confirmed letters of credit, trade loans, irrevocable reimbursement undertakings and avalized bills of exchange, among other instruments, and is open to any bank registered and operating in Africa that completes the Bank's due diligence process. For Djibouti, a small nation whose economy leans heavily on port and logistics activity tied to its Red Sea location, the facility offers a direct channel for SMEs to access the hard currency they need to keep trading through global supply shocks.

Source: AllAfrica - African Development Bank