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Sweden’s export credit agency (ECA) has launched an import guarantee product to help local businesses struggling to secure raw materials amid global supply chain crunches and commodity price swings.

EKN’s decision to launch the product is the first time it has provided cover for imports, rather than exports, and required obtaining a new ordinance from the government.

“The smooth function of Sweden’s raw materials supply is crucial,” says Anna-Karin Jatko, EKN’s director general.

“Many Swedish companies depend on raw material imports, particularly industrial companies that develop climate-smart solutions,” she says in a statement. “The raw materials guarantee means EKN can now assist in securing access to these raw materials.”

The guarantees will be provided to local and international banks that are financing the importation of raw materials by Swedish companies. The product will be subject to an overall limit of SKr3bn (US$270bn) this year, while next year’s threshold has yet to be decided.

EKN suggests that the guarantees will largely be used to secure the supply of key metals and minerals needed for manufacturing products linked to the transition to clean energy.

One of the inputs that EKN hopes the guarantees will help smooth imports of is copper. Lotta Danielsson, the agency’s deputy director for large corporates, tells GTR that the metal “is crucial to key technologies necessary for the energy transition” but that the “rapidly growing demand has left importers competing for supplies, while a rising copper price incentivises the opening of new mines”.

Danielsson says that while Swedish companies have long been dependent on imports for many raw materials, “disrupted supply chains in the wake of the recent pandemic and the ongoing war in Ukraine have further increased the need for a credit guarantee”.

EKN says that to qualify for a guarantee, the importation of goods must be underpinned by an offtake agreement and must be of “significant Swedish public interest”.

Over the last two years governments around the world have scrambled to establish reliable supply chains for minerals needed for the energy transition and other critical needs, particularly as relations between the West and China – which dominates supply chains for many of those minerals – worsen.

ECAs are increasingly being tasked with that effort, with plans afoot in supplier countries such as Australia and economies where such minerals are in hot demand, including the US.

The US government in June launched the minerals security partnership, which includes more than 10 countries and the European Commission, and is aimed at developing strong mineral supply chains that circumvent China.

The new EKN guarantee is also in keeping with the ECA’s efforts, along with sister financing agency the Swedish Export Credit Corporation’s (SEK), to contribute to the country’s attempt to reach net-zero greenhouse gas emissions by 2050.

EKN launched a green guarantee scheme in September last year that was available not just for Swedish exporters, but could also be used for the working capital requirements of any businesses with “direct or indirect” exports.