ANNOUNCEMENT 30 Apr 2014
In April 2014, the British government announced a change in its trade finance instruments.
NUMBER OF INTERVENTIONS
Official press release by the government:
Information on the facility:
On 30 April 2014, the UK government launched its Export Refinancing Facility (ERF) with a volume of GBP 5 billion and the aim to allow UK exporters to provide favourable financing conditions to overseas customers.
In essence, the facility allows overseas buyers of British goods and service to substitute their initial loan with bonds guaranteed by the British export finance agency, UKEF. Through this guarantee, UKEF extends the borrowing conditions enjoyed by the British government to the overseas purchasers of British goods and services. UKEF also offers to stand in as a lender until a proper refinance solution has been found.
The eligibility for this scheme requires loans to be larger than GBP 50 million without exceeding 85% of the export value. Only exports outside the EU are eligible for the ERF. The programme also does not cover defence- and aviation-related contracts.
The government argued this facility was necessary as Basel III regulations have made it more difficult for banks to offer long-term loans.