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Saturday, May 25, 2024

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ITFC’s disbursements reach record high as it doubles down on sustainability

The Islamic Trade Finance Corporation (ITFC)’s approvals and disbursements in 2021 reached new heights at US$6.5 billion and US$5.1 billion respectively, according to its latest Annual Developmental Effectiveness Report titled ‘Towards a resilient trade’. The 2021 report highlights its efforts toward sustainable, inclusive and resilient trade aligned with the UN 2030 Sustainable Development Agenda in the post-pandemic global landscape. At the halfway point in implementing its 10-year strategy, the ITFC has made substantial strides toward its targets.

“As member countries were battling a fast-surging wave of the COVID-19 pandemic, spurred by the Delta variant, ITFC stepped up its financing to sustain critical supply chains such as energy, food and healthcare, which enabled member countries to preserve their economic and social stability. I am proud to see that the outreach of ITFC interventions increased by 18% year-on-year (yoy) with an estimated 39 million people in OIC countries benefiting from our financing across all sectors,” Hani Salam Sonbol, CEO of the ITFC, said.

As part of the recovery response phase, a total of US$763 million was approved in 2021, contributing to the IsDB Group’s US$4.67 billion response package to help member countries contain and mitigate the impact of COVID-19 and achieve sustainable recovery. With an emphasis on inclusive growth, the ITFC’ disbursement toward less-developed member countries in 2021 increased by 25% yoy to US$1.5 billion, benefiting nine countries.

Although the ITFC has made record disbursements in 2021, it saw a 68.17% yoy decline in private sector financing support amounting to US$182.4 million compared with US$573 million provided in 2020. The decline is attributed to the absence of any disbursements in 2021 for two major export-import banks which previously accounted for more than 75% of its private sector portfolio.

The corporation contributed to a considerable number of sustainable projects in 2021, with its interventions in the energy, healthcare, food and agricultural sectors benefiting an estimated 39 million people in recipient member countries. It is setting its strategic direction to tackle climate change and defining operational procedures to ensure its operations and projects demonstrate a commitment to sustainability.

While sustainability is a key focus for the ITFC, renewable energy projects are yet to be introduced into its portfolio which remains primarily focused on the oil and gas sector. Only 42% of the ITFC’s clients reported having a well-established or certified environmental management system and a sustainability policy. The corporation looks to leverage its advisory services to further build capacity at the client level on environmental compliance.

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