UK Export Finance (UKEF) is raising the amount lenders can approve on their own under its General Export Facility to £15m from £10m, and lifting its Ukraine cover limit by £3bn to £6.5bn, the government said on 28 October.
The facility (GEF) gives partial guarantees to banks that lend to UK exporters. The change means participating lenders can grant larger facilities without seeking transaction-specific approval from UKEF, and eligibility is also to be widened.
The measures take effect only once introduced, and UKEF will work with lenders on implementation.
Jonathan Reynolds, Secretary of State for Business, Innovation, Science and Trade, said: “Our support for Ukraine remains steadfast, and this increase in access to financing will back British business to support critical infrastructure across a range of sectors.”
The expansion was announced in the Budget. The government said the wider eligibility is aimed at smaller firms and those beginning to export, to help them secure working capital.
UKEF’s guidance says it has given participating banks delegated authority of up to £10m per exporter. Where an application meets set criteria, the guarantee is granted automatically, which shortens response times.
The guidance says GEF can support facilities valued up to around £25m, with repayment terms of up to five years. There are sixteen participating lenders.
To qualify now, an exporter must declare that export sales made up at least 20% of turnover in any one of the last three financial years, or at least 5% in each of the last three.
Tim Reid, UKEF’s chief executive, said: “These measures will put finance within reach of more UK firms, particularly smaller businesses, and help them move faster when export opportunities arise, so they can turn overseas wins into growth and jobs at home.”
The Ukraine increase did not have the backing of UKEF’s own accounting officer. In a letter published on 28 October, Reynolds referred to a note from Reid of 23 October.
In it, Reid, as accounting officer, assessed that the increase would not meet the Managing Public Money test of regularity and that he could not conclude it represented value for money.
Reynolds concluded that it was in the national interest for UKEF to remain on cover for Ukraine. Under his powers as Secretary of State, he directed Reid to continue support through the National Interest Account and to raise the market limit from £3.5bn to £6.5bn.
He wrote that “the exceptional circumstances facing Ukraine, and the UK’s wider strategic interests, justify continuing and expanding this support notwithstanding the significant financial risks involved.”
The government said the additional capacity will let UKEF consider a next generation of projects tied to Ukraine’s defence and resilience, and that the proposal responds to a growing pipeline of opportunities.
UKEF has already financed work in Ukraine, the government said.
That includes more than 5,000 air-defence missiles from Belfast-based Thales, nuclear fuel supplied by Urenco in North West England, the rebuilding of six bridges in the Kyiv region using Scottish and Welsh steel, and former Royal Navy mine-countermeasure vessels.
UKEF has £130bn of financing capacity in total, the government said.
A new collective offer from the public finance institutions was also published alongside the Budget. It brings together their support and gives regional and local partners a clearer route into government-backed finance.
