UK Export Finance

 

Institution type Export credit agency
Ownership Part of UK government
Head office 1 Horse Guards Road, London SW1 2HQ
Rating  Information No independent rating, UK sovereign rating (Moody’s Aaa, S&P AAA, Fitchs AAA)
Major instruments information  Export credit loans guarantees and insurance and overseas investment insurance
www.ukexportfinance.gov.uk
Email: cxo@ukef.gsi.gov.uk
Tel: +44 20 7271 8000
Summary

Founded in 1919, UK Export Finance ‘UKEF’ is the operating name of the Export Credits Guarantee Department (ECGD); a government department that reports to the Minister for Trade and Investment, and the Secretary of State for Business and Innovation and Skills. It is the UK’s official export credit agency and a founder member of the Berne Union (the International Union of Credit & Investment Insurers).

UKEF’s statutory purpose is to support UK companies that export and investment overseas. It does so by providing various types of products such as loans, guarantees, insurance and reinsurance.

List of UK Export Finance products :
https://www.gov.uk/government/collections/uk-export-finance-products-and-services

  • Overseas Investment Insurance
  • Bond Insurance Policy (BIP)
  • Bond Support Scheme
  • Buyer Credit Facility
  • Supplier Credit financing facility
  • Export Insurance Policy
  • Export working capital scheme
  • Export Refinancing Facility
  • Direct Lending facility

Example of relevant products for private infrastructure investments
Instrument Overseas Investment Insurance
Instrument type Insurance
Eligible investments, borrowers, and projects • The investor must be carrying on business in the United Kingdom and not simply acting as a conduit for investment from outside the United Kingdom
• The investment must be made in an enterprise outside the United Kingdom where cover is requested for a guarantee given in respect of an investment in an enterprise, the person giving the guarantee must have an interest in that enterprise
Eligible beneficiaries Investors (direct or indirect)
Eligible forms of investment • Any investment of resources may be considered for cover, including loans or subscriptions for shares
• Indirect investments and guarantees given to other investors may also be covered
Risk types covered Political risks
• war, civil war, revolution and insurrection in the host state
• expropriation or nationalisation of the enterprise in which the investment is made (or of its property) contrary to international law
• restrictions on remittances, including exchange controls, imposed by the host state
Maximum tenor  15 years (may be renewed annually on the same terms and premium rate)
Maximum amount or cover Up to 90% of losses
Fee No application fee, a risk premium is determined on a case by case basis, and paid annually upon renewal of the policy
Instrument Bond Insurance Policy (BIP)
Instrument type  Insurance
Eligible investments, borrowers, and projects Where a UK bank issues a bond on their behalf to an overseas buyer, or a counter-guarantee to a bank in the buyer’s country, as a condition of an export contract.
Eligible beneficiaries UK exporters
Eligible forms of investment All types of bonds for export contracts, except tender or bid bonds.
Risk types covered*   • The unfair calling of the bond (or any related counter-guarantee)
• The fair calling of the bond (and any related counter-guarantee) due to certain political events such as government actions (including the cancellation or non renewal of export licences), war, hostilities, civil disturbances and similar events outside the UK
Maximum tenor No maximum stated
Maximum amount or cover 100%
Fee No application fee, a risk premium is determined on a case by case basis
Instrument Export Insurance Policy
Instrument type  Insurance
Eligible investments, borrowers, and projects – buyer must carry business overseas
– if the risk period is less than 2 years, UKEF along with other EU ECAs is unable to offer credit insurance if the buyer is within the European Union, or other high income countries (Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States of America). This restriction does not currently apply to Greece
Eligible beneficiaries exporter must be carrying business in UK
– contracts must contain a minimum of 20% UK content
Eligible forms of investment
Risk types covered  Commercial risks : 
– Insolvency of the buyer
– Buyer default or inability to pay any amount due under an export contract

Political risks: 
– political, economic or administrative events outside the UK that prevent payments from the buyer under the export contract being converted into sterling or transferred to the UK
– hostilities or civil disturbances outside the UK that affect performance of the an export contract
Maximum tenor
Maximum amount or cover  -up to 95 % is provided to the exporter
Fee No application fee, a risk premium is determined on a case by case basis