General Business Law

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Provided by Mesfin Tafesse & Associates Law Office

MTA facilitated a deal that involves a term loan facility agreement entered between Dashen Bank Share Company as Borrower, and FMO & BII as Lenders for their joint commitments of up to USD 20,000,000 each. The loan will help to drive agricultural exports and provide access to much-needed foreign exchange (FX) within Ethiopia.

Specifically, the loan is to provide USD-denominated loans to cover the costs of importing machinery for export-oriented agribusinesses, such as producers of cut-flowers, coffee, and livestock and to increase the productivity, quality, safety, and value addition of Ethiopia's agricultural exports, which generate 90 per cent of its foreign currency.

This deal is the first of its kind, after the introduction of the Foreign Currency Intermediation Directive by NBE, that will allow the foreign currency to be made available to Ethiopian agribusiness engaged in the export sector. This makes Dashen Bank a trailblazer as the first local bank borrowing from abroad for the purpose of on-lending the borrowed foreign exchange finds to Ethiopian agricultural exporters, representing a benchmark for many more domestic banks to take advantage of facilities to provide foreign exchange funding to Ethiopia's export sector. The firm's specific role in this deal was acting as Ethiopian course to FMO & BII in connection with the term facility agreement.