SACE And IFFCO Collaborate On Islamic Finance For Italian Food Sector

In a significant development for the Italian food and beverage sector, SACE, Italy's Export Credit Company, has unveiled a new initiative designed to bolster the Italian value chain within this industry. This initiative, known as the Push Program, has been launched in partnership with the IFFCO Group, a major international conglomerate based in the UAE, specializing in a broad spectrum of mass-market food products and services. This collaboration marks a notable milestone as it introduces the world's first financing guaranteed by SACE with an Islamic finance structure, specifically through Commodity Murabaha, with HSBC serving as the exclusive participant.

The IFFCO Group, which boasts a presence across 50 countries with 95 facilities and employs approximately 15,000 individuals, will benefit significantly from this program. The group's extensive portfolio, featuring over 80 brands, is set to expand further, reaching new markets across five continents. This initiative not only underscores the global reach and impact of the IFFCO Group but also represents a strategic move to enhance Italian exports in the agri-food sector.

Michal Ron, SACE's Chief International Officer, expressed enthusiasm about the partnership, highlighting the potential for this initiative to facilitate additional opportunities for Italian SMEs across various sectors. Ron emphasized the groundbreaking nature of this Push Strategy operation, which, for the first time, is structured according to Islamic Finance principles. This strategic move is poised to unlock new market opportunities in the Middle East and beyond, ultimately benefiting Italian exports.

Ram Ramanathan, Group Director and Group CFO of IFFCO, acknowledged the collective efforts and ingenuity of HSBC and SACE in achieving a "global first" with this Islamic structure under the SACE Push Program. Similarly, Samir Nayak, Director – Group Treasury IFFCO, pointed out the innovative approach taken to design a financial structure that adheres to both ECA clauses and Islamic principles, offering a novel solution compared to conventional financial offerings.

Alexei Rybakov, HSBC's Head of Export Finance MENAT, further commented on the transaction, noting its contribution to the advancement of Shariah-compliant structures. Rybakov praised the innovative nature of such cross-border transactions, which are instrumental in fostering trade and investment flows between Europe and the Middle East.

The collaboration between IFFCO, SACE, and HSBC has successfully created a template solution for executing Sharia-compliant Export Credit Agency (ECA) transactions under the SACE Push Program. This venture not only highlights the collaborative spirit and innovative approach of the entities involved but also sets a new benchmark in the realm of Islamic finance and international trade.

This strategic initiative demonstrates a significant commitment to supporting the Italian agri-food system, a vital component of Italy's national interest. Through facilitating new export opportunities and tapping into the potential of Islamic finance, the partnership aims to enhance the global competitiveness of Italian companies in the food and beverage sector, thereby contributing to the broader growth and success of the industry.