The International Islamic Trade Finance Corporation (ITFC), member of the Islamic Development Bank Group (IDB) and Indonesia Commodity & Derivatives Exchange (ICDX) have signed an MoU in Jeddah, Saudi Arabia on 20 September 2016 to provide Shariah compliant pre export warehouse financing facility with the total amount of USD 50.0 million. The financing will be available to Indonesian Tin smelters and buyers from ICDX.

This is a unique commodity transaction for the Tin industry as the financing is facilitated by the ICDX which is the Indonesian-government sponsored settlement provider and exchange for Indonesian tin producers. The financing will be delivered via a purpose-built Shariah compliant depository receipt that will be asset backed by physical tin in the ICDX bonded warehouse.

Upon signing the agreement, Eng. Hani Salem Sonbol, CEO ITFC explained that "this product can be traded efficiently and priced via the ICDX tin contracts. This product is scalable and fully asset-backed and will eventually provide liquidity to Islamic banks in Indonesia and the wider region." Sameer Meralli, Chief Executive Officer of Qatari investment bank, Alchemy Capital Advisors, who also serves as a senior Advisor to the ICDX said "the provision of short term trade finance at a competitive cost of capital is critical to the long term survival of Indonesian tin smelters and strengthens the position of Indonesia as one of the world's largest tin exporters."

ITFC looks to provide commodity financing to sectors that also have a high social impact. ITFC also recognizes the importance of the tin trade in Indonesia and looks to support the industry and its participants. Eng. Hani Sonbol concluded "we are very pleased to work with ICDX and deploy this structure across to 23 regulated smelters." (Source: www.itfc-idb.org)