Russia’s largest lender Sberbank has teamed up with London-based investment firm Gemcorp Capital and two state entities to create a mechanism to support trade finance between Russia and African countries, Sberbank said.
Their agreement, signed on the sidelines of Africa-Russia forum in the Black Sea city of Sochi on Wednesday, is worth $5 billion, state-controlled Sberbank said in a statement.
It “signifies Russian and African parties’ need for joint financial solutions,” the bank added.
Speaking to dozens of African heads of state at a two-day summit earlier on Wednesday, Russia’s President Vladimir Putin called for trade with African countries to double over the next 4-5 years and said Moscow had written off African debts to the tune of over $20 billion.
It was not immediately clear what projects could become part of the agreement – which includes state development bank VEB and the Russian export center, a state institute supporting non-commodities exports.
Gemcorp did not respond to request for comment from Reuters. Gemcorp was formed in 2014 by Atanas Bostandjiev, a former executive at VTB Capital, the investment arm of Russia’s second largest lender VTB.
In 2018, Gemcorp said it had extended a $250 million loan to Zimbabwe to help the country import essential goods like fuel and medicine. In 2019, Gemcorp’s commodities trading arm agreed to supply 500,000 tonnes of wheat to Ethiopia.
The agreement will help boost Russian exports in general by providing financial assistance for the supply of Russian goods to African countries including Angola, Ethiopia, Mozambique and Zimbabwe, Sberbank said.
The plan is to offer financial support and counsel to projects of Russian exporters in sectors like agricultural products, fertilisers and medical products, it added.