The Export Credits Guarantee Department (ECGD) has sold £69.5 million (GBP) of Jordanian debt to a local company for conversion to dinars to set up a state of the art information and communications technology (ICT) link within Jordan.

The project is integral to the support of Jordan's goal to become a centre for ICT and is part of the REACH initiative - a national strategy to generate employment, improve the country’s ICT export potential and provide a sound infrastructure for national development.  

Trade Minister Mike O’Brien said: “This important transaction is a good deal for all concerned.  The project will help Jordan to achieve its goal of creating jobs and exports in the ICT sector.

“At the same time the sale of £69.5million of Jordanian debt will reduce the external debt burden on Jordan as well as helping the ECGD achieve an early recovery of the debt.”

The Jordanian Government is committed to a five-year development program, which aims to generate jobs in the sector and stimulate investment in ICT services.

This transaction is the third sale of debt since ECGD signed a Memorandum of Understanding with the Jordanian Government in January 2001 providing for the conversion of up to £95 million of the country’s debt to ECGD covered by Paris Club Rescheduling Agreements for investment in suitable projects.  

Jordan is one of several countries covered by ECGD’s Debt Conversion Scheme where ECGD is able to swap debt to support projects of economic or social benefit in the debtor country.

Notes to Editors

1. Under ECGD’s Debt Conversion Scheme, the benefits to the three parties involved in the transactions are as follows:

• The creditor (ECGD) sells debt at a discount to an investor in return for hard currency, thus achieving an early recovery of the debt owed;
• The investor sells the debt to the debtor Government (Jordan) for local currency.  The difference between buying and selling provides the investor with a margin; and,
• The debtor Government sees its hard currency obligations reduced, and there is also an investment in a local project.

2.  ECGD, the Export Credits Guarantee Department, is the UK’s export credit agency. A separate Government Department reporting to the Secretary of State for Trade and Industry, it has more than 80 years’ experience of working closely with exporters, project sponsors, banks and buyers to help UK exporters of capital equipment and project-related goods and services. We do this by providing: insurance against non-payment to UK exporters; help in arranging finance packages for buyers of UK goods by guaranteeing bank loans; and Overseas Investment Insurance - a facility that gives UK investors up to 15 years’ insurance against political risks.

3.  More information on ECGD’s products, along with other press releases, is available on its website www.ecgd.gov.uk

Press Enquiries:

Azara Bibi, ECGD Press Office, Tel: 020 7512 7421

(Out of Hours: 07790 887852)