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WASHINGTON – The participants to the Organization for Economic Cooperation and Development’s (OECD) Arrangement on Officially Supported Export Credits have reached an in-principle modernization agreement after several years of negotiations. The Export-Import Bank of the United States (EXIM), as the country’s official export credit agency, played a key role in developing the U.S. delegation’s negotiating position.

The aim of the in-principle agreement is to make Arrangement financing flexible enough to better face challenges posed by the economic and financial needs of projects as well as the increasingly competitive landscape coming from non-OECD Participants (e.g., the People’s Republic of China) and to create further incentives for supporting a wider range of climate friendly and green transactions.

“The modernization framework will better allow EXIM to support the needs of U.S. exporters and meet a variety of Biden-Harris Administration priorities such as the Partnership for Global Infrastructure and Investment and climate-beneficial projects,” said EXIM President and Chair Reta Jo Lewis. “The agreement also ensures that export credit agencies are operating on a level playing field and complementing, not competing with, private financing.”

Specifically, the Participants agreed in principle on the expansion of the scope of green or climate friendly projects eligible for longer repayment terms (i.e. eligible under the Climate Change Sector Understanding or CCSU) to those related to (i) environmentally sustainable energy production, (ii) C02 capture, storage, and transportation , (iii) transmission, distribution and storage of energy, (iv) clean hydrogen and ammonia, (v) low emissions manufacturing, (vi) zero and low emissions transport and (vi) clean energy minerals and ores.

They also decided to provide more flexible financing terms and conditions for projects eligible for the CCSU as well as for all other transactions supported according to the Arrangement by:

• increasing the maximum repayment term up to 22 years for CCSU-eligible projects and 15 years for most other projects,
• introducing further repayment flexibilities and adjusting the minimum premium rates for credit risk for longer repayment terms.

In addition to providing more flexibilities, these changes will lead to a simplification of the Arrangement text through streamlined provisions, as well as a more robust transparency regime and review procedures to maintain a level playing field.

This reform is expected to come into effect later this year, once Participants complete their formal internal decision-making processes and agree to the new Arrangement text. The Participants to the Arrangement are the United States, Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, and the United Kingdom.

ABOUT EXIM:

The Export-Import Bank of the United States (EXIM) is the nation’s official export credit agency with the mission of supporting American jobs by facilitating U.S. exports. To advance American competitiveness and assist U.S. businesses as they compete for global sales, EXIM offers financing including export credit insurance, working capital guarantees, loan guarantees, and direct loans. As an independent federal agency, EXIM contributes to U.S. economic growth by supporting tens of thousands of jobs in exporting businesses and their supply chains across the United States. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of U.S. debt. Learn more at www.exim.gov.