Swedish export credit agency EKN has unveiled a guarantee programme for exports that contribute to the climate transition, as part of plans to align the Northern European country’s export finance system with the Paris Agreement’s 1.5°C goal.
The Green Export Credit Guarantee scheme covers export transactions for green products or products with a green end use, per the definitions laid out in the European Union taxonomy. Up to 100% of the value of the transaction can be covered, up from the usual 95% risk coverage under EKN’s standard export credit guarantees.
Applications for the guarantees – which include buyer credit and bill of exchange guarantees for banks, and trade receivables and loss on claim guarantees for exporting companies – must include an explanation of how the transaction contributes to climate transition or climate change adaptation while doing no significant harm to any of the other environmental objectives.
This is the second green guarantee launched by EKN. The original Green Credit Guarantee, launched in 2021, was developed for green investments and working capital needs within Sweden that are linked to Swedish exports, whilst the new Green Export Credit Guarantee focuses specifically on green export transactions.
“These two guarantees complement each other and increase opportunities for Swedish companies to export climate-smart products and solutions. With these two guarantees, EKN wants to promote green activities in Sweden and abroad,” says Anna-Karin Jatko, EKN’s director general.
Moves within Europe’s export finance space to promote green activities have been building momentum in recent years, catalysed by commitments to end support for the fossil fuel sector.
In 2020, Allianz Trade launched a targeted green insurance product, promising to invest the premiums in green bonds, which was followed by the roll-out by UK Export Finance of its Export Development Guarantee, aimed at helping export businesses transition away from coal, oil and gas. Meanwhile, in November last year, Spain’s export credit agency Cesce closed the first operation under its new Green Investment Policy, backing a €500mn syndicated green loan for energy company Iberdrola.
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