The world gathered in Glasgow knowing it really is now or never to save our planet. Huge pledges were made – trillions of pounds in green investments, an end to deforestation, and more than 40 countries quitting coal.
This shows climate diplomacy is working. Now pledges need to become reality.
Governments have committed to investing billions, but the private sector has trillions more to contribute, and working in tandem towards shared goals is the only viable path to net zero.
Businesses transitioning to build their expertise and output in renewable energy and net zero technologies (NZT) more generally is a major focus for the future, and the government is determined to deliver.
That’s where our award-winning UK Export Finance (UKEF), the government’s export credit agency (ECA), comes in.
Following the events UKEF hosted at COP26, we have launched a call to action for businesses to take advantage of renewable and NZT opportunities as a major focus for the future.
We recognise that the challenges faced by suppliers and exporters to the clean growth industry are unique.
They need access to the right financial support to both secure the contracts, deliver on them, and get paid.
UKEF can support green exports worldwide
So, to help businesses seize the significant export opportunities around the world – and grow their business’ international footprint at the same time – we have made changes to adapt and strengthen our financial support.
This has included enhancing our suite of products to make them more flexible, expanding our network of export finance executives based across the UK to provide guidance to British businesses, and we are concurrently expanding our network of International Export Finance Executives (IEFEs).
IEFEs are global representatives of UKEF, uniquely placed to connect UK businesses with overseas opportunities as the first point of contact in-country, and are on hand for businesses to discuss the financing options available to them.
With special attention given to clean growth sector opportunities for UK businesses, IEFEs collaborate with HM Trade Commissioners and British Ambassadors, and engage with overseas governments and multinational companies looking to buy from the UK.
As countries around the world commit to net zero, they are commissioning major projects to see it through – from overhauling entire transport systems, as in Egypt, to transforming infrastructure and urban development, as in the UAE’s Environment Vision 2030.
This means those governments and multinational companies are looking for the best skillsets and products to help them deliver, and opportunities for UK exporters to be a part of that.
UKEF is here to help them take advantage.
For example, we provided a £31 million clean growth loan to award-winning environmental management company Bee’ah in the UAE to help them finish their new headquarters.
This new smart office will be entirely powered by renewable energy and was designed by British firm Zaha Hadid Architects.
This shows we can put UK companies at the heart of creating a better future for the planet.
Building a clean growth portfolio
Looking to that future, UKEF has over £2 billion of direct lending dedicated to financing clean growth projects, and we are using our network of overseas finance experts based in key markets to win export contracts for the UK supply chain.
We have developed a rich pipeline of green projects abroad and have the financial expertise to support UK businesses through our finance manager network.
This is already bearing fruit. UKEF doubled the amount of support it provided for sustainable projects to £2.4 billion in 2020, ranking second for sustainable finance in a global league table of export credit agencies.
Our Buyer Credit Facility also enables overseas buyers to support sustainable investment projects, on the proviso that they procure goods for UK firms.
UKEF can guarantee a buyer credit loan to an overseas borrower in over 60 currencies, encouraging investment and reducing the risk for the overseas buyer.
Furthermore, in September last year UKEF unveiled an ambitious new plan to go net zero by 2050, decarbonising its entire financial portfolio and increasing support for green exports.
This announcement forms part of a wider Climate Change Strategy to minimise the impact of UKEF support on climate change.
It is among the most ambitious of any export credit agency (ECA), and is a major undertaking.
A green future
Over the next four years, we will increase our support for green projects overseas; provide detail on our portfolio greenhouse gas emissions and interim decarbonisation targets; and adopt best practice climate scenario analysis to minimise climate-related risks for the taxpayer.
Following COP26, UKEF immediately enhanced its Export Development Guarantee (EDG) to stimulate more investment into the green economy, offering exporters of clean growth technology and services up to 10 years rather than five to repay loans issued under the product.
In addition, we can now offer EDGs not just to those who currently export, but to companies based in the UK and overseas who plan to export from the UK in the future.
So as the science is clear, so is our vision for the future: UK companies have an important role to play in the global transition to a low-carbon economy.
Experts predict that the UK’s low-carbon economy could grow by 11% per year between 2015 and 2030 – four times faster than the rest of the economy – delivering between £60 billion and £170 billion of export sales in goods and services by 2030.
Clearly, there is huge opportunity across the board that will drive high-value jobs and sustainable growth into every part of the country – and around the world.
Huge progress had been made in the years leading up to COP26 but it’s now – with more of the world’s spotlight on this cause than ever before – that we can really turn the dial.