The African Development Bank has signed a US$10.75 million Trade Finance Transaction Guarantee Facility with Intercontinental Investment Bank East Africa, or iib East Africa, to increase access to trade finance in Djibouti.
Signed on 23 June 2026, the agreement is intended to help the Djibouti-based bank support small and medium-sized enterprises, including women-owned businesses, whose import transactions can be constrained by limited credit lines and the perceived risks faced by international confirming banks.
The facility will support eligible imports of machinery, equipment and other goods for sectors including renewable energy, manufacturing and telecommunications. It may also facilitate essential imports required to meet short-term domestic demand.
Key Overview
- The facility has a maximum value of US$10.75 million.
- It was signed by the African Development Bank and iib East Africa on 23 June 2026.
- The guarantee can provide confirming banks with up to 100% risk coverage on eligible trade transactions.
- Target beneficiaries include SMEs and women-owned businesses in Djibouti.
- Supported sectors include renewable energy, manufacturing and telecommunications.
- The partnership is the first direct transaction between the African Development Bank Group and iib East Africa.
Guarantee Aims to Unlock Letters of Credit
Under the trade finance agreement, the African Development Bank will share the payment risk associated with trade instruments issued by iib East Africa.
The structure does not represent a direct US$10.75 million cash loan to individual enterprises. Instead, the African Development Bank can guarantee eligible obligations to international confirming banks, making those institutions more willing to confirm letters of credit and related instruments issued for Djiboutian clients.
Coverage may reach 100% of the risk accepted by a confirming bank. The arrangement is expected to improve iib East Africa’s ability to provide import financing where overseas suppliers require a confirmed payment commitment from a recognised international bank.
Eligible instruments under the African Development Bank’s transaction-guarantee programme include confirmed letters of credit, trade loans, irrevocable reimbursement undertakings, avalised bills of exchange and promissory notes. The guarantee product was launched in 2021 for qualifying African financial institutions that have completed the development bank’s due-diligence process.
Productive Sectors Set to Benefit
The facility is expected to support imports of equipment required by Djibouti’s renewable-energy, manufacturing and telecommunications industries. These sectors are important to efforts to diversify an economy heavily connected to transport, logistics and regional trade.
Financing imported productive assets can allow smaller companies to expand capacity, adopt new technology and participate more effectively in domestic and regional supply chains. The guarantee can also support essential goods needed to address immediate demand, although all transactions remain subject to eligibility and approval requirements.
The African Development Bank said the operation aligns with its plan to increase direct private-sector support in Djibouti. Its project record identifies the facility as a trade-finance intervention for SMEs and women-owned businesses.
By reducing the risk borne by confirming banks, the facility could also preserve iib East Africa’s existing limits for other clients. This is important in smaller banking markets where international trade lines can be scarce or expensive, particularly during periods of global financial uncertainty.
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Women-Owned Firms Gain Access to Hard Currency
Women-led businesses are specifically included among the intended beneficiaries. Access to foreign currency is essential for enterprises importing equipment, materials or finished goods, yet smaller firms often lack the collateral, trading history or banking relationships required to secure international facilities.
Earlier research on women entrepreneurs in Djibouti and the wider region found that access to credit remained a major constraint. The new guarantee does not eliminate the bank’s credit-assessment requirements, but it can reduce one of the cross-border risks that restrict the availability of trade products.
Intercontinental Investment Group Holdings Chairman Sohail Sultan said SMEs support more than 70% of Djibouti’s workforce. He described the financing gap as an economic constraint and said the facility would help entrepreneurs, particularly women, obtain hard-currency financing for productive investment.
The workforce figure was presented by the bank during the announcement and should be understood as its stated estimate rather than a newly published official labour-market statistic.
Facility Strengthens a Regional Trade-Corridor Bank
iib East Africa is a licensed bank headquartered in Djibouti and focused on corporate and institutional customers along the Ethiopia-Djibouti corridor. Its East African operations provide commercial and transactional banking services linked to trade between the two countries.
The wider banking group opened a representative office in Addis Ababa in 2026 after receiving approval from the National Bank of Ethiopia. The presence is expected to strengthen coordination with companies using Djibouti’s ports and logistics network to serve the Ethiopian market.
For iib East Africa, the agreement expands its capacity to issue trade instruments supported by the African Development Bank’s credit standing. For Djiboutian enterprises, the practical value will depend on how effectively the bank converts the guarantee into accessible facilities, competitive pricing and timely approvals.
The transaction nevertheless creates a new channel through which local SMEs and women entrepreneurs can finance equipment and essential imports while supporting investment, supply-chain resilience and employment.
Sources: African Development Bank Group / MapAfrica / Intercontinental Investment Bank / World Bank
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