(Insurance News Net, Dubai, 5 October 2021) Etihad Credit Insurance (ECI), the UAE Federal export credit company and the French Export Credit Agency Bpifrance Assurance Export have signed a reinsurance agreement to increase joint Emirati and French projects globally. The agreement will further strengthen the robust trade and economic cooperation between the UAE and France and boost exports in both countries by providing export insurance solutions for Emirati and French companies. The UAE is France’s second-largest trade partner in the region. As part of boosting investment and trade ties, ECI earlier signed agreements with its counterparts in the UK and Italy. The agreement with France has been deemed another milestone in ECI’s mission to deepen the UAE’s economic ties and non-oil trade.Saudi Arabia and Sweden have also discussed enhancing economic cooperation including via their ECAs.
Saudi Arabia
Saudi EXIM Bank signs a reinsurance agreement with ICIEC
(Saudi Gazette, Jeddah, 3 September 2021) The Saudi Export-Import Bank (EXIM Bank) has signed an agreement with the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), to launch a special insurance product that helps Saudi banks to provide more credit facilities for the export of Saudi non-oil products, and enable them to increase their ability to enhance letter of credit received from foreign banks for the benefit of Saudi exporters.
EDC lifeline to Saudi armoured car maker raises questions
(Globe and Mail, Toronto, 7 June 2020) The federal government tapped a seldom-used account at Ottawa’s export-financing agency last fall to extend $650-million of support to the US defence contractor building combat vehicles for Saudi Arabia, aid that came as Riyadh was falling behind on payment for these machines. During 2019, parent company General Dynamics Corp. disclosed publicly that the Saudis had been tardy in making payments on the LAV deal. Transactions made through the Canada Account are backstopped by the federal treasury rather than EDC itself. Ottawa has previously used the EDC Canada Account to bail out the auto industry, help a Quebec shipbuilder, spur civilian aircraft exports by aerospace companies, and to buy the Trans Mountain pipeline. Earlier this spring, the Canadian government said it resumed approval of new permits for military exports to Saudi Arabia. Global Affairs said the loan was needed to “maintain and support thousands of jobs not only in Southwestern Ontario but also across the entire defence industry supply chain. An NDP MP said his party does not support the sale of armoured vehicles to Saudi Arabia, which human-rights groups say are being used by the Saudis in its war in Yemen, while Conservative MP Peter Kent decried the lack of forthrightness over lending $650-million to a major U.S. arms manufacturer.
Saudi ECA offers support for TAPI pipeline
(EurasiaNet, New York, 14 January 2020) Turkmenistan’s state media reported that the president had signed a decree authorizing the State Bank for Foreign Economic Affairs to conclude a loan with the Saudi Development Fund for the Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline. This is only the latest offer of assistance from Riyadh. Documents seen by Eurasianet reveal that the Saudi-backed Islamic Corporation for the Insurance of Investment and Export Credit, or ICIEC, has committed to $500 million in financing for the project. The ICIEC is a member of the Saudi-led investment fund, the Islamic Development Bank, or IDB, which has offered as much as $1 billion in financing for TAPI. Even all this Saudi money may not be sufficient to cover the ultimate cost of TAPI, which has been estimated at anywhere between $7.5 billion and $10 billion. The security situation along TAPI’s route is not the only thing spooking lenders. Turkmenistan’s endemic nepotism and corruption is also a disincentive.
Saudi Arabia looks for ECA finance to reduce deficits
(Bloomberg, Riyadh, 11 December 2019) Saudi Arabia may tap international debt markets as early as next month as it seeks funding to help bridge its widening budget deficit. In addition to selling bonds the debt office is also looking at alternative options including export credit agency financing. Fahad Al-Saif, head of the Finance Ministry’s debt management office, said “We are now engaged in ECA financing that actually makes sense to be plugged into the portfolio. Also infrastructure finance, project finance — it depends. There are certain governmental projects that we could finance away from the debt capital markets.”
