Up to £13 billion of direct lending will be used to help boost British exports across key industrial sectors as part of new growth measures spearheaded by UK Export Finance (UKEF).
Multi-billion-pound direct lending by UK Export Finance will help boost orders for British exporters across key industrial sectors, including defence
Export credit agency to introduce new product to secure critical minerals supply and plans to legislate to increase its statutory commitment limit to support even more businesses
New measures announced as part of Industrial Strategy published yesterday
Through its Direct Lending Facility , UKEF - the government's export credit agency - provides loans to overseas buyers, allowing them to finance the purchase of capital goods and services from UK suppliers.
Outlined in the Industrial Strategy , UKEF now has greater flexibility of direct lending powers to support all eight Industrial Strategy sectors, from clean industries and life sciences to advanced manufacturing and defence.
The £13 billion marks a £3 billion uplift in UKEF's facility. Of this £13 billion, at least £3 billion will be used to stimulate defence exports, demonstrating the growing importance of this sector to economic and national security.
Recent direct lending deals include a £18.8 million equivalent loan for an Angolan clean water project delivering up to approximately £6.8 million of supply contracts for British exporters, and a £23 million equivalent loan to Iraq's Ministry of Interior to purchase 62 UK-made fire-fighting vehicles .
Business Secretary Jonathan Reynolds said:
UKEF plays an instrumental role in delivering our Industrial Strategy - providing the essential support that British businesses need to compete internationally.
By unlocking export opportunities and supporting innovation across key sectors through mechanisms like direct lending, UKEF is helping to drive sustainable economic growth, create highly skilled jobs and strengthen Britain's place as a go-to trading partner.
Our commitment to backing British exporters forms a vital part of this government's Plan for Change which will raise living standards in every part of UK.
Following on from the announcement of UKEF's Critical Minerals Supply Finance product in the Autumn Statement, the department is going further to secure industry access to critical minerals by launching a new loan guarantee scheme for UK-based suppliers that sell critical minerals, or products that contain critical minerals, to UK exporters.
UKEF also plans to legislate to have its statutory commitment limit - the entire amount of support that the department can have on its books at any one time - increased which will enable it to support more businesses of all sizes across the UK. The department will review its operating mandate to consider taking on a broader trade and investment finance remit.
To encourage growth at a local level, the department plans to expand its network of 24 local export finance managers to give focus on city regions and clusters where key sectors have a presence. Export finance managers provide free and impartial guidance to businesses on their export finance needs.
UK Export Finance CEO Tim Reid added:
UKEF is well positioned to drive exports across high-impact industry sectors and create economic growth. We look forward to playing a key role in driving delivery of the Industrial Strategy, using our increased capacity and flexible product range.
Backed by our comprehensive five-year business plan that will reach businesses of all sizes across every region and nation of the UK, we're laying the extra foundations to enable thousands more British businesses to take their products and services to global markets.
The measures are announced ahead of UKEF's 2024/25 annual report & accounts which will be published shortly. The results are expected to show it was a record-breaking year for the department.
It will build on the results of the 2023/24 financial year in which UKEF provided over £8.8 billion of support to 650 businesses of all sizes and types, supported up to 41,000 jobs in communities around the whole UK and the contribution of up to £3.3 billion to the overall economy.
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