Participants to the Arrangement on Officially Supported Export Credits announced a modernization of the Arrangement on March 31, 2023, after several years of negotiations.
The aim of the agreement is to make financing more flexible to face economic and financial challenges of projects and to create further incentives for supporting a wider range of climate-friendly and green transactions.
The Participants agreed in principle to expand the scope of green projects eligible for longer repayment terms to include areas such as clean hydrogen, low emissions manufacturing, and clean energy minerals and ores. They also agreed to provide more flexible financing terms and conditions for projects eligible for the Climate Change Sector Understanding (CCSU) as well as for all other transactions supported by the Arrangement.
The reforms are expected to simplify the Arrangement text through streamlined provisions and create a more robust transparency regime and review procedures. The changes are expected to come into effect later this year, pending Participants' formal internal decision-making processes and agreement to the new Arrangement text.
The reform package is expected to be a complete game-changer for the export finance sector, according to industry experts. By providing more flexible financing terms and increasing the maximum repayment term up to 22 years for CCSU-eligible projects and 15 years for most other projects, businesses and governments will have more manageable payment schedules, making it easier to invest in sustainable projects.
The Participants to the Arrangement are Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom, and the United States. The agreement marks a significant moment in the export finance industry, driving the sector towards greater sustainability and helping countries achieve their climate objectives.
Comments
No comments on this item Please log in to comment by clicking here