UK Export Finance has rallied together export credit agencies from around the world to join a Net Zero Export Credit Agencies Alliance being launched today at the COP28 summit.
Backed by the UN’s Environment Programme Finance Initiative, the partnership will promote greater action from export credit agencies and EXIM banks in achieving net zero emissions by 2050, and will collaborate with the Glasgow Financial Alliance for Net Zero.
The alliance currently includes UKEF, Export and Investment Fund of Denmark (EIFO), Export Development Canada (EDC), and the Swedish National Export Credits Guarantee Board and Swedish Export Credit Corporation (EKN and SEK) as full members. ECAs from the UAE, Kazakhstan and Spain have also joined the Alliance as affiliates.
UKEF is committed to reaching net-zero in terms of its total financed emissions by 2050; it ended all new support for overseas fossil-fuel projects in 2021, except in very limited circumstances. Other members of the Alliance are now following this direction by pledging to reach net zero in their portfolios and operations by the middle of the century.
Tim Reid, CEO of UK Export Finance, said: “Export credit agencies play a crucial role in helping businesses to transition towards net zero and shifting finance flows towards climate-friendly projects and investments. This new alliance mobilises export finance in support of a common goal: achieving global net zero by 2050 and limiting global warming to 1.5 degrees. I look forward to working with UKEF’s counterparts around the world to support this journey.”
This announcement follows a change earlier this year to the OECD Arrangement which allows export credit agencies to offer greater incentives for climate-friendly transactions.
Eric Usher, Head of UNEP FI, said: “Public finance has been the missing piece in the net-zero financial landscape. ECAs are in a very strong position to deliver more sustainable global trade and to complement the work already being undertaken by the private finance sector, helping to address market gaps to deliver net-zero economies by 2050. NZECA will play an important role in supporting real economy transition and help countries implement their commitments under the Paris Agreement.”
This comes as UKEF during COP28 announces its role in securing multimillion-pound financing for transactions which support climate adaptation and sustainability across Africa and the Middle East. The ECA has so far announced its role in securing £226 million in financing for the Iraqi government to develop over 350km of drainage infrastructure and 15 sewage treatment stations near Hillah city – bringing clean water to 25,000 more households.