UK Export Finance: Export credit for the energy transition

clock • 4 min read
UK Export Finance: Export credit for the energy transition

The UK's clean energy sector is booming, and it is creating opportunities overseas that UK Export Finance can help unlock

Two years ago, the UK's renewable energy sector turned over almost £70 billion. Recent estimates show that around 14 per cent of the country's energy come from renewable energy. 

Those numbers will only grow and grow as the UK continues to move towards net zero.

This energy transition is creating new opportunities for firms shaping the cutting edge of sustainable energy.

These aren't just opportunities in the UK, either; with around a third of the entire world's energy capacity coming from renewables, there are as many prospects abroad as at home.

UK Export Finance (UKEF), a government department which supports companies seeking to export, can help energy firms looking to seize these opportunities.

The department is the UK's official export credit agency: an organisation which works with all major UK banks to provide trade financing support and export insurance to UK firms. This helps exporters win contracts, deliver them and get paid for them.

UKEF has issued over £37bn in support to UK exporters over the last five years, and it is still open for business. 

With a Renewables and Transition team dedicated to unlocking finance for clean energy exports, UKEF is here to help you secure export credit for the energy transition.

Here are some of the ways in which we can support you.

Working Capital for Smaller Firms: General Export Facility

Most of UKEF's customers over the last year have used the General Export Facility (GEF), a game-changing product which helps smaller firms access up to £25m in trade finance without an existing export contract. 

Telford-based battery manufacturer AceOn is one firm which has benefited from the GEF. Working with non-bank lender Newable, UKEF secured £300,000 in financing which allowed the firm to clinch new export contracts to supply batteries to the Portuguese firm Meterboost.

Unlocking Trade Finance: Export Development Guarantee

Our Export Development Guarantee (EDG) is another loan guarantee product allowing more businesses than ever to access government-backed trade finance. Over half of the finance which UKEF secured for exporters last year came through EDG facilities.

UKEF can offer extended repayment terms on EDG financing for clean energy exporters, as well as a variant product for companies looking to invest in the UK and establish exporting operations.

An EDG loan guarantee is what unlocked £50m in financing for Northern Ireland-based bus-maker Wrightbus. This saw UKEF guarantee 80 per cent of a loan from Barclays Bank, helping turbocharge exports of clean, green electric and hydrogen-powered buses to new markets in Germany and North America as well as existing clients in Singapore and Hong Kong.

Support for Overseas Buyers: Buyer Credit Facility and Direct Lending

The International Energy Agency estimated in 2021 that solar PV and wind would contribute to two-thirds of worldwide growth in renewable energy that year. Opportunities are being created overseas for UK exporters to continue spearheading this growth as part of clean growth projects worldwide.

UKEF can offer attractive financing to overseas buyers commissioning major projects, helping UK exporters to secure contracts with them; the export credit agency can guarantee loans or lend directly to buyers. UKEF's offer is advantageous to exporters working in the renewables sector, with £2bn of its capacity for direct lending earmarked for supporting clean growth projects.

What's more, updates to the OECD Arrangement - a set of international guidelines on the use of export credit - mean that we can set longer repayment terms for our buyer-credit and direct lending products than ever before. Maximum repayment terms have risen up to 22 years for applicable projects in renewables and transition.

Our Buyer Credit Facility secured British involvement in Kalyon Enerji's 1.35GW Karapinar solar project: the largest solar facility in Turkey, which now powers around two million households.

UKEF offered Kalyon a loan guarantee to unlock £217m of crucial financing on the condition that the project involved UK suppliers. This led to contract wins for UK exporters assembling solar technology and supported up to 100 jobs.

Making Sure You Get Paid: Export Insurance

The global pandemic highlighted the value of our Export Insurance Policy (EXIP), which helps exporters manage the risk of non-payment by customers in challenging markets. Covering up to 95 per cent of the value of an export contract, our EXIPs can help companies who have either lost cover or cannot access private insurance through no fault of their own.

Have an Enquiry?

If you want to learn more about how UKEF could help you with a new or existing export, contact us by filling out our online form: Contact us - UK Export Finance. Our help is free, non-binding and does not require you to have an existing export contract.

This post is sponsored by UK Export Finance

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