The COVID-19 pandemic has created a devastating global health crisis, leaving no country or citizen spared from the ensuing economic and social repercussions. The necessary lockdown measures employed by governments have greatly impacted global supply chains and trade flows, leaving import-dependent countries vulnerable. The pandemic has also exacerbated the risk environment and stymied investment, particular for countries with already fragile economies.
In an effort to combat the challenges posed to select member countries, ICIEC and the Islamic Solidarity Fund for Development (ISFD), the poverty alleviation arm of the IsDB Group, have collaborated to create a rapid COVID-19 response and resilience initiative which is prioritized for certain IsDB member countries to meet their import needs of medicine, medical equipment, food supplies and other essential commodities. Eligible countries were determined by their level of import dependence.
ISFD has allocated a grant of up to USD 400 million to ICIEC, which is being utilized to subsidize the premium on the insurance cover to facilitate the procurement of medicine, medical equipment, food supplies and other essential commodities to eligible countries.
IsDB Group President and Chairman of the ISFD Board of Directors, Dr. Bandar M. H. Hajjar, addressed the need for IsDB Group support in his statement. “In the face of the rising protectionism that has been further fueled by the pandemic as well as the associated economic cost for our member countries, IsDB Group recognizes the need to mobilize relief for OIC countries that are heavily reliant on imports, especially for essential commodities such as pharmaceuticals and food supplies. ISFD’s contributions to the ICERI are an effort to work jointly with ICIEC to expand capacity for maintaining these vital trade and investment flows.”
In a separate statement, ICIEC CEO, Oussama KAISSI, echoed the sentiment, “ICIEC is committed to supporting the OIC member countries in their recovery from the Covid-19 Pandemic. The Corporation is pleased to collaborate with ISFD, utilizing IsDB Group synergy to enhance both organizations’ capacity to support relief efforts. The ICERI is prioritizing transactions for urgent imports, ensuring citizens have access to critical commodities through these challenging times.”
The ICERI will provide insurance support for the procurement of two urgent needs:
- Medical equipment, pharmaceutical products and other related items that are needed for the fight against the COVID-19. Including but not limited to, protective gear, testing kits, sanitizers, ventilators etc.
- Essential commodity items, including essential food supplies and energy commodities
An implementation team composed of representatives of ISFD and ICIEC was established to set the procedures for the ISFD Grant allocation to eligible transactions. The operational tasks of insuring and monitoring the transactions is being undertaken by ICIEC in its regular course of business. ICIEC is committed to prioritizing the transactions related to combating COVID-19 and is trying to augment the impact of ISFD’s grant as much as possible. Most of the transactions funded through the ICERI are being led by the eligible member countries’ Governors and Ministries of Health, as they have close insight on the most urgent needs for their respective countries.
ICERI is meant to target two of the IsDB Group’s ‘3 R’s’:
- R1: Respond through immediate disbursing actions to assist Member Countries’ in acting quickly to mitigate the adverse impact of COVID-19
- R2: Restore via medium term actions to strengthen health infrastructure and economic systems to overcome the pandemic’s peak.
Projects
A number of strategic projects have already been supported through the ICERI, including ICIEC’s USD 9 million in LC confirmation insurance to BMCE Bank of Africa Morocco to secure urgent imports of strategic commodities to Senegal. The COVID-19 pandemic, combined with flooding, has caused a serious supply chain disturbance and economic distress in the country.
ICIEC extended USD 5.5 million in coverage to the State Bank of India’s Singapore branch through the ICERI for the critical importation of wheat to address food security for the citizens of Bangladesh.
To address Tunisia’s energy security, ICIEC provided USD 4.75 million in cover to European-based bank, CHAABI, and USD 19 million in coverage to BMCE Bank of Africa Morocco through the ICERI. A Bank Master Policy was provided for both of these transactions to support the import of fuel to Tunisia’s state-owned electricity production, transport and distribution centre, Société Tunisienne de l’Electricité et du Gaz (STEG).
Through the ICERI, ICIEC has also extended USD 30 million in cover with a Bank Master Policy with Kuwait Finance House. The financing is being used by Egypt’s Ministry of Finance to import crude oil and refined petroleum.
