Export Credit Agency and Development Finance Institution Update

In our latest trade and export finance webinar, partners Mark Norris and Ellis Lawson gave an update on the export credit agency and development finance market, including:

1. a look back at 2023;
2. consideration of the key trends shaping the market and what we can expect from the year ahead;
3. a discussion of some of the sustainability features which are increasing in prominence in the export and development finance market; and
4. a discussion of the increasing funding gap in developing markets, with a particular focus on the need for “adaptation finance”.

2023 was a bumper year for export finance, with a 100% increase in volumes from 20% more transactions. However, as many ECAs play an increasingly geopolitical role in supporting their home state’s national interests (particularly in areas such as defence, energy transition, energy security and critical minerals), the funding gap in the developing world continues to increase.

In the webinar, Mark and Ellis focus in particular on Africa, discussing the need for so called “adaptation finance”, being finance aimed at increasing the resilience of developing countries and supporting them in adapting to climate change and climate crises, whether it be funding the construction of hospitals, flood defences or other critical national infrastructure. They also discuss the increasing prevalence of “climate resilient debt clauses”, mechanisms in finance documentation designed to allow borrowers to defer interest and/or principal payments should money need to be diverted to deal with natural disasters and climate crises. Finally they consider the role that both traditional banks and private “impact” credit have to play in filling the funding gap and the potential for increasing synergies and cross-over between these two groups of lenders.

Sullivan regularly acts for all commercial parties to export and development finance transactions, including exporters, banks, export credit agencies, development finance institutions, impact funds and other providers of private credit. Sullivan has particular expertise in advising on complex financings in developing markets, supporting clients in navigating legal and commercial hurdles to successfully complete projects in challenging jurisdictions.

Please click here for a link to a video of the webinar, and here for the accompanying slides.

For further information, please contact Mark Norris, Ellis Lawson or your usual contact at the firm.