EKN demystifies export credits at COP29

Welcome home from Baku, Karin and Victor – what are your biggest takeaways?

Karin: “This was referred to as Finance COP and that proved to be true. Compared to just a few years ago, there was a much greater understanding of how different financial instruments may be combined to meet the sizable funding needs that come with the transition. This is very positive for EKN and other Export Credit Agencies (ECA), as we can support large investments for private as well as public project owners.”

Victor: “There was much more talk about the need for export credit guarantees to make funding happen among lenders and investors as well as project owners. More and more decision makers are realising that ECA guarantees are necessary to unlock the massive funding required by rendering more projects bankable in the eyes of commercial lenders.”

Why did EKN host a panel discussion?

Karin: “The purpose was to ‘demystify’ export credits for those outside the export finance community. The misconception that guarantees are ‘too technical’ may in the past have reduced their appeal to some and limited their potential use in facilitating transitional investment.”

Victor: “EKN wanted to highlight export credit finance as an affordable and accessible means of financing transitional investments.”

Did it work? Check out some participant responses from the panel below. *)

Other highlights from COP29?

Victor: “The Export Finance for Future (E3F) collaboration between ten countries including Sweden, showed how their commitments from 2021 has resulted in a sharp decline in export credit support to international fossil projects. Another ECA cooperation, the Net Zero Export Credit Agencies Alliance (NZECA) launched a protocol on how ECAs should set science-based climate targets when assessing their guarantee portfolios.”

Karin: “E3F has certainly delivered what it set out to achieve. Still, ECA financing needs to be combined with financing from other sources such as commercial loans and multilateral institutions. We have more work to do in this regard.”

What did you pick up from the business community at COP29?

Karin: “It is very clear that businesses know what they need to do their part in the green transition – they want politicians to deliver stable long-term rules and conditions, including a phase-out of fossil subsidies. From a business perspective, sudden policy changes or shifts in the political narrative with doubts around the green transition hamper necessary investments. Stability is needed. Doubt is contagious.”

What was your overall impression of COP29?

Karin: “Despite some negative reporting from the conference, everyone I met are convinced that solutions are available. But we need to act now to grasp a theoretical chance of limiting global warming to 1.5 degrees Celsius. We need to pull together across the globe instead of arguing over which countries should do what.”

Victor: “That Swedish exporters are seen as uniquely qualified to meet the demands of the green transition, with cutting-edge technology and attractive financing with the help of EKN.”