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The UK government has announced £3bn in fresh funding for UK Export Finance (UKEF) and will make permanent an additional £2bn fund originally pledged to support firms after Brexit, as it seeks to encourage sustainability projects and overseas sales of defence-related goods and services.

The commitments made by Chancellor Rishi Sunak in today’s Spring budget will bring the agency’s spending power up to £8bn. HM Treasury says the fresh funding will provide “further support for exports” ahead of the UK’s departure from the European Union.

UKEF’s lending – which seeks to encourage overseas buyers to import UK goods and services, particularly in emerging markets – was previously capped at £3bn.

£2bn of the additional funding will support a “lending facility for projects supporting clean growth”. The remaining £1bn will “support overseas buyers of UK defence and security goods and services”, the Treasury says.

An additional £2bn had previously been set out in 2018’s budget to boost spending between 2020 and 2022, a move designed to give a helping hand to exporters adjusting to Brexit. That has now been made permanent, so will continue to be available beyond 2022.

“This package – which is the highest level of export lending the government has ever made available – will provide support to industries and regions across the country,” said Sunak, speaking to reporters ahead of today’s announcement. Representatives from UKEF were not immediately available to comment.

The Treasury adds that UKEF will expand its face-to-face support for exporters in the north of England and Scotland “where energy supply chains are economically important”.

The agency will also “update its terms to allow it to better support export finance on a fixed-rate basis across its full product range, allowing customers to benefit from certainty of financing costs”.

New initiatives have also been unveiled that will be overseen by the Department for International Trade (DIT). Along with the Department for Digital, Culture, Media and Sport, DIT will pilot a “digital trade network” project in the Asia Pacific region.

The government says the pilot will cost £8mn and should help innovative UK firms access opportunities in key markets and strengthen ties within the global technology sector.

DIT will also “increase its resource and capability to identify and address market access barriers preventing UK exporters from accessing particular markets”, Treasury says.

Markus Kuger, chief economist at Dun & Bradstreet, says the additional funding “is welcome news and will help British exporters over the next few months, quarters and years to sell their products abroad”.

“However, I think it could be a drop in the ocean depending on how coronavirus will develop, and depending on how the Brexit free trade talks will develop,” he tells GTR. “It’s a headline-grabbing figure that might be forgotten pretty soon, depending on how bad it could get economically.”

Sunak acknowledged the outbreak of coronavirus is expected to have a noticeable impact on the UK. He says the government is braced for “a temporary disruption to our economy” which could involve up to a fifth of the working-age population being off work.

“Business supply chains are being disrupted around the globe,” he added. “This combination of people being unable to work and businesses being unable to access goods will mean that for a period our productive capacity will shrink.”

In response, the government says it will launch a business interruption loan scheme, providing up to £1.2mn to SMEs. The loans will be subject to a government guarantee covering losses of up to 80%, without fees, to encourage banks to “lend with confidence”.

Other promises include a government review of fintech in the UK, led by Bank of England non-executive director Ron Kalifa. Kalifa, formerly chief executive at digital payments giant Worldpay, is tasked with finding ways to support growth and competitiveness of the fintech sector.

“In addition, the government will convene a summit looking at what further data needs to be made accessible to make it faster and easier for SMEs to shop around for credit,” Treasury adds.

Ian Cass, managing director of the Forum of Private Business – a non-profit trade association for small businesses – says many of the budget promises “are in line with the wish list” it had previously set out.

However, Cass adds that the decision not to address late payment by larger businesses “is a disappointment, with a specific concern from the forum that this will become a bigger issue still in the coming weeks and months”.