Zurich North America’s Emerging Markets Solutions unit (ZEMS) announced the signing of a political risk insurance cooperation agreement in the form of a “Memorandum of Understanding” with the African Trade Insurance Agency (ATI).
ZEMS said it will partner with ATI “to offer a variety of insurance and financial solutions to infrastructure developers, multinational corporations and international banks looking for new business opportunities in ATI-member countries. These countries include Burundi, Kenya, Madagascar, Malawi, Rwanda, Tanzania, Uganda and Zambia.”
ATI CEO Bernie de Haldevang welcomed the agreement, stating: “It is a good move for Africa’s economies as it is a further important link between emerging African economies and the mature resources of the capital markets in the developed world. This is an example of a public-private partnership arrangement which plays to the strengths of both partners. One of ATI’s main goals is to encourage risk participation by private market players so as to reduce the cost of finance in African transactions and thus increase the competition in our markets.”
ZEMS executive VP Daniel Riordan, stated: “As a global political risk unit of Zurich North America, ZEMS welcomes this opportunity to team with ATI to help mitigate political risks for investors, while at the same time furthering our desire to promote Africa’s considerable trade and investment potential.” In cooperation with ATI, we can enable investors to pursue new African business opportunities and manage these deals with confidence.”
The bulletin noted that “ATI, as Africa’s only multilateral export credit agency, is a pan-African initiative supported by the World Bank and the EU. ATI’s objective is to encourage trade and investment in Africa by facilitating access to, and improving the terms of, trade finance for imports and exports, as well as trade among participating African countries. ATI, which is also supported by Lloyd’s of London underwriters and the Gerling NCM credit insurance group, will achieve this objective by making available to exporters trade credit and political risk insurance for trade and investment transactions.
“With the objective of increasing its membership within Africa, ATI currently brings together eight African countries willing to address the market’s perception by setting up a credible insurance mechanism against losses caused by credit and political risks. ATI’s member countries partially assuming financial liability for the political risks affecting trade within their own countries.”
It also recently announced the extension of its offered policies to “cover payment risks on public buyers, provide cover against terrorism physical damage risks, and is also investigating the possibility of launching a working capital finance guarantee facility to help reduce the cost to African exporters of raising funds for exports and imports.”
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