ECAs from across the globe have come together to form the Net Zero Export Credit Agencies Alliance, a new initiative unveiled at the COP28 summit.
This alliance, endorsed by the UN’s Environment Programme Finance Initiative, is a collaborative effort among ECAs and Export-Import (EXIM) banks to drive forward the global agenda of achieving net zero emissions by 2050. It aligns with the objectives of the Glasgow Financial Alliance for Net Zero in promoting sustainable finance practices.
The founding members of the alliance include the Export and Investment Fund of Denmark (EIFO), Export Development Canada (EDC), the Swedish National Export Credits Guarantee Board and Swedish Export Credit Corporation (EKN and SEK), and UK Export Finance (UKEF).
Additionally, ECAs from the UAE, Kazakhstan, and Spain have joined as affiliates.
Members of the alliance have committed to achieving net-zero emissions in their financed emissions by 2050, which aligns with a recent amendment to the OECD Arrangement, allowing ECAs to offer more incentives for climate-friendly transactions.
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.”
The formation of this alliance follows a recent modification in the OECD Arrangement that permits ECAs to offer enhanced 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.”
Additionally, during COP28, UKEF announced its involvement in securing multimillion-pound financing for projects that support climate adaptation and sustainability in Africa and the Middle East.
This includes a £226 million financing deal for the Iraqi government, aiding the development of over 350km of drainage infrastructure and 15 sewage treatment stations near Hillah city, thereby providing clean water to an additional 25,000 households.