First-of-its-kind EU export credit facility to target Ukraine rebuild

(Global Trade Review, London, 25 March 2024) EU officials have revealed that the next phase of a pioneering bloc-wide export credit initiative will target the reconstruction of war-torn Ukraine, an undertaking expected to cost almost half a trillion dollars. The European Commission’s Directorate-General for Trade, last week outlined plans to establish a “complex new policy tool” focused on significant infrastructure projects in the country. Details on how the scheme will operate are still being ironed out, with indications it would operate as a risk-sharing mechanism to support the work of domestic export credit agencies (ECAs). In the past 18 months, European ECAs have collectively pledged hundreds of millions of euros towards Ukraine’s reconstruction, which the World Bank forecasts will cost US$486bn. For the past three years, the Commission has deliberated on plans to establish an export credit strategy, and within this, a pan-EU export credit facility. An independent feasibility study last year concluded the bloc may consider creating a reinsurance function for ECAs.