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Irrevocable Reimbursement Undertaking (IRU)


The Irrevocable Reimbursement Undertaking (IRU) offered by ETC is a Payment Guarantee designed to ensure that the beneficiary, usually an exporter, will receive payment from the issuing bank if all conditions specified in the documentary credit (letter of credit) are met.

The type of risk participation under an IRU, proposed by ETC Export Trading Cooperation, is participation through an authenticated signature via interbank Swift messaging. Indeed, ETC is rated A3- (risk category 2 “low” according to the EU classification) by the European Securities and Markets Authority (ESMA) through an External Credit Assessment Institution (ECAI), in accordance with Regulation (EC) No. 1060/2009. This “Investment Grade” rating allows for risk weighting for regulatory purposes.

Our observation

The shortage of correspondent banks and other financial institutions willing to take on African risk is now evident. This situation sometimes forces African issuing banks and their importer clients to give up. The volume of transactions delayed or canceled due to this situation constitutes a real obstacle to the development of African markets.

It is in this context that ETC – Export Trading & Cooperation offers African banks and their importer clients the IRU, an irrevocable payment guarantee. This means that as long as the conditions specified in the documentary credit are met, the seller is assured of receiving payment, thus reducing the risk of non-payment.

What is the Irrevocable Reimbursement Undertaking (IRU)?

The Irrevocable Reimbursement Undertaking (IRU) is a guarantee primarily used in international trade. It is a commitment made by a Financial Institution (issuer) to irrevocably reimburse the amounts owed to another bank (often the beneficiary’s or supplier’s bank) in the context of a given transaction.

Who can benefit from the Irrevocable Reimbursement Undertaking (IRU)?

  • The Confirming Banks

When to apply for the Irrevocable Reimbursement Undertaking (IRU)?

  • You are an issuing bank based in Africa and regularly require confirmation of Letters of Credit.
  • You want to reassure the confirming bank about the risk of non-payment by the importer.
  • Are you looking for an instrument that can guarantee payment, mitigate counterparty risks, and is simple to implement? Discover the IRU!

The advantages of the Irrevocable Reimbursement Undertaking (IRU) for you.

  1. An irrevocable payment guarantee for the confirming bank
  2. Favorable commercial terms with the confirming bank
  3. A better reputation on the global stage

The terms of the Irrevocable Reimbursement Undertaking (IRU)

Silent risk sub-participation


Transaction to be guaranteed

min. €1 Million, max. 51 Million €

Maximum rate guaranteed

Up to 80% of the transaction


on a case by case basis depending on transaction

Risks covered

Client insolvency risk

Generating facts

Lapse of term declared by the lender


Periodic Reporting

Some beneficiary banks

  • OHADA Zone and Their Corresponding Countries
The Irrevocable Reimbursement Undertaking (IRU) in a nutshell


Default risk sharing on a transaction


Insolvency risk of the obligor(s)


Irrevocable Reimbursement Undertaking (IRU)

SWIFT Interbank Message



Issuing financial institution

Guarantor / Confirmer

LEADING BANK : Confirming bank

PARTICIPANT : ETC – Export Trading & Cooperation


Financial Institution (FI) Confirming (Leading Bank)



  • AGR = Annual Global Rate
  • AF = Application FEE (Indicative rate 0.5% flat)
  • IF = Issuing Fees (Indicative rate 0.25% flat)
  • TR = Tenor (year)
  • CF = Commitment fee (annual rate according to financial rating

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Irrevocable Reimbursement Undertaking (IRU)