This story serves as a case study in TFG’s guide, ‘Future-proofing trade finance with sustainability’.
AESC’s second gigafactory in Sunderland demonstrates how export credit agencies can leverage their trade finance instruments to support domestic manufacturing capacity that strengthens national supply chain resilience while advancing decarbonisation objectives. The £1 billion project represents a landmark application of government-backed trade finance guarantees to catalyse private sector investment in strategic green infrastructure that positions the UK as a competitive player in the global electric vehicle battery supply chain.
Trade finance structure: UK Export Finance deployed its guarantee facilities in partnership with the National Wealth Fund to provide £680 million in credit enhancements that enabled a syndicate of five international commercial banks – Standard Chartered, HSBC, SMBC Group, Societe Generale, and BBVA – to extend financing at commercially viable terms.
This blended finance approach demonstrates how export credit agencies can use their trade finance toolkit to de-risk investments in domestic manufacturing capabilities that support export competitiveness, while the remaining £320 million was mobilised through conventional private financing mechanisms and equity contributions from AESC.
Sustainable trade finance impact: The gigafactory will generate substantial manufacturing capacity of 15.8GWh at full operation, representing a six-fold increase in UK battery production capability that reduces dependence on imported components while creating over 1,000 skilled manufacturing jobs.
By supporting the production of batteries for up to 100,000 electric vehicles annually, this trade finance intervention directly facilitates the UK automotive industry’s transition toward sustainable export products that meet evolving global market demands for low-carbon transportation solutions.
This transaction marked the first collaboration between UKEF and the National Wealth Fund, establishing a precedent for how multiple government financing institutions can coordinate their trade finance instruments to address strategic economic priorities while achieving environmental objectives.
The structure demonstrates how export credit agencies can expand their traditional mandate of supporting overseas trade to encompass domestic manufacturing investments that enhance long-term export capacity and supply chain security in critical green technology sectors.