Gordon Welsh, business group director for UK Export Finance (UKEF), explains how the export credit agency is working to help buyers in the Middle East and their UK suppliers to realise their ambitions.
Companies in the UK looking to expand their businesses overseas have long looked to the Middle East for trading partners. The Gulf States are rich in natural resources and are linked to the UK by long historical trade relationships.
They also have governments actively pursuing policies to diversify their business sectors and accelerate infrastructure, social and economic development. Ambitious programmes such as the UAE’s Vision 2021, Saudi’s Vision 2030, and Qatar’s Vision 2030 will require significant investment – as well as significant expertise – to implement with projects spanning all sectors, including infrastructure, education, healthcare, entertainment and business.
And for other countries in the region, for example Iraq, there is an unprecedented need for us to support the infrastructure underpinning post-conflict recovery.
Given the scale of the plans, it is no surprise that governments in the region are looking to UK companies for their world-leading goods and expertise. British businesses are recognised for the quality and innovation of their products and services, and have a demonstrable track record across the region’s priority sectors.
At the same time, project sponsors are looking to diversify sources of finance; with Basel III soon to enter into force, and continued low prices in commodity markets, the private financial services sector is not always able to provide the options project sponsors need.
That’s where UK Export Finance (UKEF) comes in. As the UK’s export credit agency, our role is to provide the finance and insurance to help UK companies fulfil export contracts and support projects around the world. We take pride in our flexible and innovative support – in fact, as the world’s first export credit agency, established in 1919, we have nearly 100 years of innovation behind us to help UK exporters and international projects sponsors do business.
We know that finding the right financial structure is often the key to success for a project. We can offer UK businesses and their overseas buyers a range of flexible solutions for the project; whether project financing, Islamic finance, a loan from the UK government or a guarantee on a bank loan in any of a number of Middle Eastern currencies, from the Qatar rial to the Kuwait dinar. We also have billions of pounds worth of capacity to support projects across the Middle East. Coupled with the excellence of UK goods and services, this attractive finance makes for a compelling UK offer.
We also know that every project is different, and that we need to understand the project and its objectives to make the UK offer as attractive as possible. To make sure we can do this, we have made the GCC one of the first regions in the world to have a dedicated UKEF team based in the market, providing finance expertise to complement the trade support on offer from the Department for International Trade. David Moleshead and Hannah Greenwood are now working on the ground with project sponsors to identify opportunities to collaborate in priority growth sectors.
Above all, though, we know that more and more, the finance will guide procurement decisions; that’s why we offer to matchmake international projects looking for finance from UKEF with the UK supply chain. We can do this by co-hosting an exporter fair, mapping the UK supply chain to recruit the right suppliers and introduce them to the project’s procurement team. This expedites procurement from the UK and helps the sponsors meet the eligibility requirements for UKEF support, at the same time as spreading the benefits of that support among UK exporters.
Like UK businesses, UKEF is a recognised and valued partner across the Middle East for the flexibility and innovation we bring to the financing of projects. In the 2016-17 financial year, UKEF provided some £2bn in finance for projects in the region. From the Dubai Arena, to the Liwa Plastics Industries Complex in Oman, and Iraq’s power network; across the region, UKEF is supporting projects and helping UK businesses contribute to the region’s ambitions for development and prosperity.
To find out more about how UK Export Finance, search “UKEF” or contact InternationalEnquiries@ukexportfinance.gov.uk.