New OECD down payment requirements set to boost ECA support in emerging markets

(Global Trade Review, London, 10 November 2021) The OECD has relaxed down payment rules for transactions involving export credit agencies (ECAs) in emerging markets, in the wake of what it calls a “market failure” in the private sector. Under the new rules, the OECD Arrangement on Officially Supported Export Credits has slashed the down payment requirement from 15% to 5% for sovereign borrowers in developing markets, so long as the transaction is guaranteed by a ministry of finance or central bank. The policy, which comes into immediate effect, thereby also increases the maximum amount participating ECAs can officially support from 85% to 95% of the total export contract value.