UK Export Finance (UKEF) the UK’s export credit agency announced that it is making enhanced cover available to UK exporters competing for business in Rwanda.
Enhancing the cover available means that, for the first time, UKEF will be able to provide guarantees for repayments to banks financing UK capital goods and services, as well as projects involving UK exporters. UKEF is also able to provide insurance to UK exporters against the risk of non-payment in Rwanda.
The total amount of cover available for exporters to Rwanda is US$75 million but UKEF is willing to consider contracts that exceed this amount provided that the project generates foreign currency for Rwanda. An example of a typical project structure is that the currency would be held in a secure offshore account and would service the repayments on the UKEF-supported loan.
UK Export Finance would need to be satisfied that projects are to the economic and social benefit of Rwanda, without impairing its debt sustainability. This is in line with the OECD Principles and Guidelines on Sustainable Lending which all OECD official export credit agencies must adhere to.
David Godfrey, UKEF chief executive said: “Our decision to increase our cover offering reflects the fact that, while Rwanda has been through some extremely challenging times, we have seen sustained improvements, both in terms of political stability and economic performance. There are still challenges ahead for Rwanda but the improved cover that UK Export Finance has made available today will help British exporters to expand into this country and, in particular, to get comfortable with the perceived payment risks.”