The FINANCIAL — GE has reached an agreement with the UK export credit agency UK Export Finance (UKEF) to access export financing for up to $12 Billion. This agreement will initially support both confirmed and potential orders in a number of international markets including Brazil, Ghana, India and Mozambique.As GE wins these orders, it will create up to 1000 new jobs in the UK in the energy sector.
Since 2003, GE has invested over $21 Billion in the UK. These investments make GE one of the leading investors into the UK, generating significant volume of exports. GE’s Oil and Gas Subsea Division alone exported close to $1.3 Billion to 54 countries in 2014. UKEF has been a valued partner in supporting export financing for GE customers, according to GE.
Under the terms of the memorandum with UKEF, GE has pledged ongoing support for its UK supply chain. In addition to providing export finance support, UKEF has agreed to add GE as a member of its Direct Lending Facility Partnership Panel which will allow the company to provide technical, commercial and financial solutions to our customers. UKEF is also offering GE a new ‘top-up’ support facility of up to $750 million, subject to individual project approval and due diligence. This will create an additional financial incentive for UK exports and assist GE customers to close on UK made products.
“We are doing everything we can to make Britain the best place in Europe to start, finance or grow a business and GE’s substantial commitment through this agreement is fantastic news,” said UK Prime Minister David Cameron. “It will provide jobs and security for people working in the energy sector and elsewhere. It is a vote of confidence in our long term economic plan.”
“I warmly welcome this exciting series of partnership opportunities with GE. UKEF is proud to be viewed as one of the most responsive and innovative export credit agencies in the world, as this new GE framework demonstrates,” said David Godfrey, Chief Executive, UK Export Finance said. “It is a good example of the many new opportunities for multinational companies operating out of the UK to work with us.”
“In today’s competitive environment, countries that have a functional Export Credit Agency (ECA) will attract investment. Export finance is a critical tool we use to support our customers. Without it, we can’t compete against foreign competitors who enjoy ECA financing from their governments,” said Jeff Immelt, Chairman and CEO, GE. “We are fortunate to have the support of UK Export Finance (UKEF), one of the most flexible ECAs in the world. The UK is pro-export and pro-manufacturing.”
Since the U.S. Export Import Bank (Ex-Im) authorization expired July 1, GE has commenced talks with several foreign ECAs to secure financing for its customers. GE will continue to expand its operations in countries where official ECA financing is available. Just like the Ex-Im Bank, many ECA countries require that business production and jobs must be invested in-country to qualify for financing.
Last week, GE announced an agreement with the French export credit agency (COFACE) to provide a line of credit for global power projects that could ultimately create 400 jobs at GE’s facility in Belfort, France. GE also announced that it will move 100 jobs responsible for final assembly of aeroderivative turbines from the U.S. to Hungary and China to ensure customer access to ECA financing in those countries. On Thursday, GE Aviation announced that it would create a $400 million turboprop engine development, test and production operation in Europe that could ultimately support 500 – 1,000 jobs, in addition to announcing new investments in Brazil and Canada in an effort to continue providing customers with critical access to ECA financing.