BGN has become the latest energy and commodity trader to tap state-backed export finance debt, signing a US$100mn deal with the Abu Dhabi Exports Office (Adex).

The government-owned body is anchoring a revolving credit facility alongside commercial lenders Abu Dhabi Commercial Bank (ADCB) and Mashreq.

The proceeds of the loan will be used to purchase energy exports from the UAE, such as liquefied petroleum gas, a BGN spokesperson tells GTR. The trader has also committed to procuring a certain amount of goods from the country.

“As BGN continues to grow and diversify its trading activity across various commodity classes and geographies, so our financing needs will continue to expand and evolve,” says BGN chief financial officer Yannick Luce.

The new facility “will complement our existing strong liquidity base and healthy banking relationships across the Middle East, Asia, North America, Europe and Africa”, he adds.

Abdulla Al Shamsi, ADCB’s chief business officer, says the lender’s commodity franchise has “grown significantly” after the past four years. “We are looking forward to building on this momentum by deepening our partnership with Adex and, in doing so, further strengthening the UAE’s export sector.”

Adex announced its first deal with a global commodity trader last year, agreeing to lend US$125mn to Trafigura in exchange for the trading giant to buy an undisclosed minimum amount of goods from the UAE.

The organisation’s director general, Mohamed Saif Al Suwaidi, says the BGN facility “reflects our commitment to strengthening the UAE’s export sector through collaborative efforts and partnering with local banks such as ADCB and Mashreq to support local businesses in their expansion efforts worldwide”.

Long-standing barriers between commodity finance and export finance have broken down since Russia’s 2022 invasion of Ukraine caused angst over energy security, with a slew of export credit agencies inking deals to back credit lines for commodity traders. Government lending and guarantees also bring down financing costs.

Trafigura initially paved the way for such deals, securing support from export credit agencies in Germany, Italy, Saudi Arabia and the US during the last two years. Competitors such as Gunvor, Vitol and Mercuria have also put together a smaller number of similar transactions.