Aircraft manufacturer Embraer has secured a bumper export financing deal from the Brazilian Development Bank (BNDES), as it works to revive its exporting activity and recover from a Covid-19 induced downturn.

As part of the transaction, the Brazilian bank has agreed to lend in excess of US$500mn to Embraer through its export-orientated subsidiary, BNDES Exim, supporting the sale of two dozen commercial jets to US firm SkyWest Airlines.

Post-shipment financing will be provided to Embraer in local currency, with the US buyer then expected to repay the bank in US dollars. The transactions are subject to credit insurance cover for commercial, political and extraordinary risks.

“This deal is another important step for BNDES, supporting Embraer in the resumption of sales growth in the context of the greatest challenge ever faced in the history of the aeronautical sector,” says Bruno Aranha, director of productive and socio-environmental credit at BNDES.

Deliveries of the aircraft began in August and are scheduled to continue until April 2022.

As with the wider aviation sector, Embraer was hard hit by the severe and widespread slump in global travel last year, as a result of Covid-19 lockdown and travel restriction measures.

Data from aviation tracking site FlightRadar shows that the number of commercial airline flights plunged by nearly 42% for the whole of last year, compared to levels seen in 2019.

Beleaguered airlines increasingly sought to defer or cancel new aeroplane orders, which in turn affected manufacturers, with Embraer recording losses of US$121mn between June and September last year.

Export credit agencies have shown a willingness to step in and support aircraft manufacturers amid further concerns over a scarcity of private capital in the market.

As reported by GTR in June last year, the French government rolled out emergency support for Airbus through its export credit guarantee scheme, while the Export-Import Bank of the United States (US Exim) has approved several transactions backing Boeing exports since the onset of the Covid-19 pandemic.

In late July this year, for instance, US Exim signed off on a pair of guarantees worth a combined total of more than US$830mn backing the export of Boeing aircraft to Turkish Airlines in Istanbul.