The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) has signed a $42 million facultative reinsurance agreement with the Saudi EXIM Bank (Saudi EXIM) for a Documentary Credit Insurance Sub-Policy Limit in favor of Riyad Bank with a tenor of up to 12 months.
The Sub-Policy comes under the master Facultative Reinsurance Agreements (FRA) signed by the two entities in 2021.
ICIEC is the Shariah-compliant multilateral insurer and member of the Islamic Development Bank (IsDB) Group.
Under the FRA, ICIEC will provide Shariah-compliant reinsurance covering up to 70 percent of Saudi Eximbank’s exposure under a Documentary Credit Insurance Policy Commercial and Political Risks (Multi Risk) issued to the Original Insured up to the agreed Credit Amount Limit.
The Sub-Policy enables coverage of LCs confirmed by Riyad Bank for several Saudi commercial banks. It will also provide additional headroom capacity for the confirmation of LCs to support trade transactions by commercial banks in Saudi Arabia and the ICIEC Member States.
ICIEC’s cooperation with Saudi EXIM Bank has steadily grown over the years, with a current reinsurance agreement worth some $140 million.
“This year, Saudi EXIM was named the winner of the ICIEC Awards for the Category of ‘Export Credit Agency of the Year 2023’,” according to the statement.
It marks Saudi EXIM’s critical support towards diversifying the Kingdom’s export base and contribution to intra-OIC trade. With a gross volume of financing and insurance services provided to exporters exceeding $2.5 billion as of the end of 2022, the contribution of Saudi EXIM to achieving the objectives of Saudi Vision 2023 is highly commendable, as per the reports.