Minister for Trade and Export Promotion, Baroness Fairhead, writes for The Times Red Box on how UKEF backs British business and supports UK exports
Under this government, UK Export Finance (UKEF), the UK’s export credit agency, has been transformed into a responsive, competitive and effective supporter of UK exports. The government’s Export Strategy, published over the summer, puts UKEF at the heart of our offer to help British businesses succeed overseas.
And already there is growing recognition of UKEF and its world-class support for exporters; the CBI said in its Winning Worldwide report that “UKEFservices have provided a vital complement to the private finance sector to help hundreds of SMEs” on their exporting journey.
Only last week, the British Exporters’ Association awarded UKEF the highest rating of any European export credit agency for the fifth year in a row, recognising UKEF’s commitment to strengthening its product range and developing new ways to reach out to exporters and their suppliers across the UK.
As Minister of State for Trade and Export Promotion, I am very proud of the work of UKEF. In 2017/18, UKEF provided £2.5 billion worth of support to help nearly 200 companies sell to 75 markets around the world. In turn, this is supporting thousands of skilled jobs and contributing billions to the UK economy, as well as improving infrastructure and growing industry abroad.
Projects like Offshore Cape Three Points, a transformational natural gas field in Ghana, which, with UKEF support worth US$400 million, is helping the Government of Ghana reduce its dependence on oil and meet its COP 21 commitments for climate mitigation.
Or UKEF’s US$35 million loan to support Biwater’s contract to deliver much-needed water treatment in the Kurdistan Region of Iraq. Or JDR Cables’ contract to supply subsea power cables to Danish company Dong Energy’s offshore windfarms, providing non-carbon energy to the UK.
UKEF’s mission is to ensure that no viable UK export fails for lack of finance or insurance from the private sector. Its role is to provide support where the private sector can’t, and so it is therefore demand-led.
I was therefore pleased to see earlier this week that the Shadow Secretary of State for International Trade is also taking note of its work. However, he expresses concerns about government support for companies exporting in the fossil fuels sector.
Supporting the UK’s renewables sector is of the utmost priority for the whole of the UK government; we have world-leading suppliers in this sector, and want to do all we can to help them achieve international success. DIT has provided trade promotion support for renewables sector exports worth hundreds of millions, for example through tradeshows and sourcing procurement opportunities.
We welcome the opportunity to provide UKEF support to renewables sector exports – and in the last 2 years, have supported £310 million worth of contracts. However, there is significant liquidity in the private sector finance market for investment in renewables projects. Our aim is only to provide support where there is a lack of private sector finance, and the sector’s export success – £500 million last year – shows that other sources are available.
On the other hand, the UK’s oil and gas sector has suffered in recent years due to the long-term depression in oil prices and huge scale of financing needed to develop these projects. According to Oil and Gas UK, the sector supports more than 302,000 jobs – a decline of 160,000 since 2014. It is also vital to the UK’s energy security. This sector needs support.
UKEF has also made clear its commitment to high standards of environmental, social and human rights risk management – rigorously following the OECD Common Approaches, which sets the framework for export credit agencies in ensuring these risks are mitigated.
In fact, UKEF is a member of the Equator Principles Steering Group, seeking multilateral progress on the environment and human rights for lending and large projects while maintaining a level playing field for UK businesses to compete internationally.
UKEF’s role is to back UK businesses, of all sizes and in all sectors, stepping in where required and ensuring that the right support is in place to help them compete in a global marketplace and realise the benefits of international success. From this government’s perspective, UKEF is doing this better than ever.