Denmark’s export credit agency, Eksport Kredit Fonden (EKF), has resumed short-term cover for Libya, in an effort to encourage trade with the troubled country.

EKF CEO Anette Eberhard tells GTR that the decision came from a rise in demand for trade financing in Libya. “We have had a slight increase in the number of requests on Libya, and that caused us to increase our cover policy. The increasing stabilisation in the security situation, and the fact that Libya is now able to produce and sell as much oil and gas as before the conflict, has made us comfortable in deciding to open up on Libya with due caution,” she says.

However, she points out that banks are still reluctant to give loans for exports to the country, and that there is a long way to go before prospects open up for Danish exporters in Libya.

She adds: “Just like us, Danish companies are very patiently looking into the situation and hoping for improvement, but in the longer term we think that there will be good export prospects for Danish companies within the construction and oil and gas sectors, and of course medicine and food.

“Medium and long-term cover could resume as well, but not in the short run. Based on history and similar situations in other countries, we have to be patient for the local parliament to work and gradually improve not only the security situation, but also the economic and financial situation.”

Eberhard sees this mostly as an encouragement for Danish exporters to support development in Libya, and confirms that other European export credit agencies (ECAs) are also in the process of resuming cover for the country.

Meanwhile, EKF has suspended all guarantees for transactions with Iran, following the country’s exclusion from the global Swift system, which makes it “practically impossible to get money out of Iran”, according to the ECA’s CEO.

“If you go back quite a number of years ago, we had substantial exposure in Iran, but during the past three or four years we have gradually closed down our cover, due to the continuous conflict between Iran and the UN, EU and so on.

“We hope that the situation will be eased as soon as possible, but based on the past three or four years I can’t say when the suspension will be lifted,” Eberhard tells GTR.

EKF has also increased its premium for risk cover in Jamaica after the country got downgraded from a 6 to a 7 risk classification by the OECD, but Eberhard does not expect the ECA’s Jamaican cover policy to change any time soon.

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