Through its Direct
Lending Facility, UKEF – the government's export credit
agency – provides loans to overseas buyers, allowing them to
finance the purchase of capital goods and services from UK
suppliers.
Outlined in the Industrial
Strategy, UKEF now has greater flexibility of direct lending
powers to support all eight Industrial Strategy sectors, from
clean industries and life sciences to advanced manufacturing and
defence.
The £13 billion marks a £3 billion uplift in UKEF's facility. Of
this £13 billion, at least £3 billion will be used to stimulate
defence exports, demonstrating the growing importance of this
sector to economic and national security.
Recent direct lending deals include a £18.8 million equivalent
loan for an Angolan
clean water project delivering up to approximately £6.8
million of supply contracts for British exporters, and a
£23 million equivalent loan to Iraq's Ministry of Interior
to purchase 62 UK-made fire-fighting vehicles.
Business Secretary said:
UKEF plays an instrumental role in delivering our Industrial
Strategy – providing the essential support that British
businesses need to compete internationally.
By unlocking export opportunities and supporting innovation
across key sectors through mechanisms like direct lending,
UKEF is helping to drive sustainable economic growth,
create highly skilled jobs and strengthen Britain's place as
a go-to trading partner.
Our commitment to backing British exporters forms a vital part of
this government's Plan for Change which will raise living
standards in every part of UK.
Following on from the announcement of UKEF's Critical
Minerals Supply Finance product in the Autumn Statement, the
department is going further to secure industry access to critical
minerals by launching a new loan guarantee scheme for UK-based
suppliers that sell critical minerals, or products that contain
critical minerals, to UK exporters.
UKEF also plans to legislate to have its statutory commitment
limit – the entire amount of support that the department can have
on its books at any one time – increased which will enable it to
support more businesses of all sizes across the UK. The
department will review its operating mandate to consider taking
on a broader trade and investment finance remit.
To encourage growth at a local level, the department plans to
expand its network of 24 local export finance managers to give
focus on city regions and clusters where key sectors have a
presence. Export finance managers provide free and impartial
guidance to businesses on their export finance needs.
UK Export Finance CEO Tim Reid added:
UKEF is well positioned to drive exports across high-impact
industry sectors and create economic growth. We look forward to
playing a key role in driving delivery of the Industrial
Strategy, using our increased capacity and flexible product
range.
Backed by our comprehensive five-year business plan that will
reach businesses of all sizes across every region and nation of
the UK, we're laying the extra foundations to enable thousands
more British businesses to take their products and services to
global markets.
The measures are announced ahead of UKEF's 2024/25 annual report
& accounts which will be published shortly. The results are
expected to show it was a record-breaking year for the
department.
It will build on the results of the 2023/24 financial year in
which UKEF provided over £8.8 billion of support to 650
businesses of all sizes and types, supported up to 41,000 jobs in
communities around the whole UK and the contribution of up to
£3.3 billion to the overall economy.
