Export Credit Guarantee Department
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| Department overview | |
|---|---|
| Formed | 1919 |
| Jurisdiction | United Kingdom |
| Headquarters | London |
| Minister responsible | |
| Website | www |
UK Export Finance is the operating name of the Export Credits Guarantee Department (ECGD), the United Kingdom's export credit agency and a ministerial department of the UK government. It is, by international type and in its operations (e.g. involvement in Baku–Tbilisi–Ceyhan pipeline), a controversial government department. ECGD derives its powers from the Export and Investment Guarantees Act 1991 and undertakes its activities in accordance with a specific consent from HM Treasury. ECGD was established in 1919 to promote UK exports lost during the submarine blockade of World War I.
In recent years we have supported business in the aerospace, automotive, construction, healthcare, industrial processing, oil and gas, petrochemical, water treatment, and satellite sectors.
ECGD's aim is to benefit the UK economy by helping exporters of UK goods and services to win business, and UK firms to invest overseas, by providing guarantees, insurance and reinsurance against loss, taking into account HM Government’s wider international policy agenda. ECGD is required by HM Government to operate on a slightly better than break-even basis, charging exporters premiums at levels that match the perceived risks and costs in each case.
The largest part of ECGD's activities involves underwriting long term loans to support the sale of capital goods, principally for the export of aircraft, bridges, machinery and services; it helps UK companies take part in major overseas projects such as the construction of oil and gas pipelines and the upgrading of hospitals, airports and power stations. Support can be given for contracts as low as £1,000, but some of the projects ECGD backs go well beyond the £1 billion mark.
As part of its risk management process, ECGD has to make a judgement on the ability of a country to meet its debt obligations. The department uses a ‘productive expenditure’ test, undertaken in consultation with the Department for International Development, that makes sure that the countries defined as heavily indebted poor countries and those exclusively dependent on International Development Association financing only get official export credits from the UK for projects that help social and economic development without creating a new unsustainable debt burden. ECGD continues to check that the proposed borrowing is sustainable.
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