KUALA LUMPUR (Oct 28): The International Finance Corp (IFC), a member of the World Bank Group, has signed a US$1.2 billion risk sharing facility with Citigroup Inc (Citi) to help stimulate trade growth in emerging markets and support economic development.

The facility extension will expand the availability of trade credit for clients in emerging markets over a four-year span through a risk-sharing structure, said Citi in a statement today.

IFC and partners will contribute US$600 million, and Citi will provide an additional US$600 million.

The signing extends two existing facilities under IFC's Global Trade Liquidity programme, which was jointly launched with Citi in October 2009, said Citi in a statement today.

Since its inception, such collaborative efforts have financed a total trade volume of US$20 billion, with around US$4.2 billion in International Development Association countries and US$7.1 billion in low income and lower middle-income countries.

Citi's treasury and trade solutions global distribution head Anurah Chaudhary said the collaboration with IFC has been a "tremendous success", which has helped stimulate global trade growth and recovery in emerging markets.

"As the availability of global trade finance continues to decline, IFC is committed to working with Citi to find innovative ways to help expand trade finance flows in the developing world — and the Global Trade Liquidity Program is one such successful effort," said Marcos Brujis, IFC Director of Financial Institutions Group.

Their long-standing partnership has facilitated financing for 3,368 trade transaction through 163 Emerging Market Issuing Banks in 40 countries, of which 23 are low and lower middle-income countries.

Citi said it will use the facility's funding to originate and fund trade finance transactions in Africa, Asia, Central and Eastern Europe, Latin America, and the Middle East, enabling its bank clients to extend financing to local importers and exporters.

The funding is expected to support emerging market trade flows of more than US$6 billion through 2019.