The UK’s export credit agency is providing a £500mn loan guarantee to automotive manufacturer Jaguar Land Rover, in a bid to boost the country’s electric vehicle (EV) manufacturing and export sector.

The agreement, which was signed and drawn down in full by the company in December, sees UK Export Finance (UKEF) cover 80% of a £625mn five-year loan from a group of banks.

Citi serves as lead arranger on the facility, while other lenders include Barclays, BNP Paribas, Crédit Agricole CIB, Deutsche Bank, HSBC, JP Morgan, MUFG, NatWest, Standard Chartered and State Bank of India.

The agreement, approved under UKEF’s export development guarantee (EDG) scheme, will support Jaguar Land Rover’s research, development and export of battery-powered electric vehicles.

“We are backing our ambitious net-zero plans with more concrete action. We want our carmakers to accelerate the production of electric vehicles in the UK,” says Anne-Marie Trevelyan, secretary of state for international trade.

“Jaguar Land Rover is pleased to have worked again with UK Export Finance on this new EDG facility. This will help support the significant investment in our transition to offer a fully electrified product portfolio and to achieve our target of net-zero carbon emissions by 2039,” says Adrian Mardell, Jaguar Land Rover’s CFO.

Jaguar Land Rover previously secured a £500mn guarantee from UKEF in 2019, the first such deal to be signed under the agency’s EDG programme.

At the time, the transaction was described by UKEF as falling within its general export facility (GEF) – also designed to support firms’ ongoing activities rather than individual export contracts, though aimed at smaller businesses.

But the following year, UKEF said it was yet to launch its GEF initiative, and subsequently announced in mid-2021 that West Midlands-based technology company Simworx, an exporter of attractions to theme parks, was the first to have won cover through the scheme.

The government says the EDG scheme is available to companies that have generated 5% of their turnover from UK exports in each of the last three years, plus at least 20% of their turnover in one of those years.

It carries a minimum transaction size of £25mn and a maximum repayment period of five years.

Another carmaker, Ford, also gained UKEF-backed funding through the EDG scheme in mid-2020, with financing going towards the development of its electric vehicle and digital manufacturing.