The African, Caribbean and Pacific (ACP) group of countries says it has launched a study to examine the feasibility of opening a trade and investment bank to service 79 member states.
The ACP Bank for International Trade and Investment (BITI) is intended to address gaps in existing financing methods which prevent valid projects from being realised, the ACP secretariat said.
It said the six-month European Union-funded study comes to an end in December, following which a team of experts would analyse financing gaps, conduct a market survey in ACP regions, and propose an implementation framework for the bank, including its structure, membership and location, sources of capital and operational activities and financial instruments.
"The global objective is to ensure that ACP countries can carry out key projects that can boost development, but cannot be financed by the existing channels, for whatever reasons.
"Research already shows there are significant gaps in trade financing and SME (small to medium business) financing, for instance, areas which are absolutely essential to ACP economies," said chef de cabinet of the ACP secretariat, Dr Obadiah Mailafia, who is coordinating the BITI project.
The secretariat said that ACP countries will be the dominant shareholders in the institution, although investors may include European countries, international banking firms such as the European Investment Bank and the BRICs partners.
The ACP secretariat said that the original idea for such a bank stemmed from an ACP council decision taken in 1980, which called for an exploration of the issue, but had lost steam.
"The initiative was recently revived at the ACP ambassadorial level and a concept note was prepared detailing the rationale, principles and context of setting up such an institution. The technical study and analysis will help to outline the conceptual framework, methodology and timelines for the project," the statement added.
Mailafia said there is no intention of creating a major bank just for the sake of doing so.
"There will be value added. It will cater to ACP countries, having thorough knowledge of our financing environments. It will address current gaps in financing mechanisms. Africa evidently has huge economic potential, and so do countries in the Caribbean and the Pacific. The BITI is, therefore, linked to the future of the ACP group as a whole," he said.