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Export credit guarantee

Helping UK exporters secure overseas contracts and invest overseas, by providing guarantees, insurance and re-insurance

Purpose

To benefit the UK economy by helping exporters of UK goods and services win business, and UK firms to invest overseas, by providing Government-backed guarantees, insurance and re-insurance against the risk of non-payment when such support is unavailable from the commercial market.

Why offer public sector support ?

To complement the commercial market by taking on the medium and long term payment risk due to commercial and political factors in markets where the private market is unwilling to take on those risks or has insufficient risk appetite.

Such risks are generally unattractive to the private market because they are long duration and correlated.

Government has greater leverage to maximise recoveries in the event of default and can wait longer for such recoveries, compared with private sector agents.

The rationale therefore, is that ECGD is more efficient than the private sector.

In line with World Trade Organization requirements, the guarantees and insurance will be granted at premium rates that are not below those rates available to borrowers in the international capital market.

What will be offered?

Helps UK exporters to compete against foreign competitors by

• insuring export contracts for the supply of capital goods and services;
• providing loan guarantees to financial institutions so that they can finance exports;
• insuring investments in overseas projects.

Who will be eligible?

Any person operating in the UK, who is exporting capital goods and services or is investing overseas, is eligible to apply for cover. Acceptance is subject to rigorous risk assessment of the exporter and buyer.