05/09/2022

Following the TXF GLOBAL conference, a main event in the Export Finance industry, Cécile Camilli, Head of Development and Structured Export Finance (DSE), shares her views on the evolution of the sector and how the shift of DSE has impacted their business.

Cécile, what are the current trends in Export & Development Finance?

In Export Finance, we work with exporters and importers, from sovereigns to corporates and financial institutions, to finance strategic assets and projects such as infrastructure, energy, industrial investments or transportation, with the support of export credit agencies (ECAs) and multilaterals. Historically ECAs were mostly active in emerging markets to mitigate credit and political risks but they have recently increased their action in developed markets, as they are backing projects that carry the risks of new green technologies: new players, start-up business models, innovative technologies, market risks, and so on. 

I recently moderated a panel during the TXF Global conference with three companies reflecting on Europe’s ambition to accelerate on the energy transition, as each decided to shift towards cleaner technologies and greener industries. Northvolt is Europe’s biggest EV battery manufacturer with further expansion planned in Sweden & beyond, Freyr aims to produce the most sustainable and clean energy storage batteries in Norway, while JDR Cable Systems, a leader in subsea cable for Oil and Gas extraction, launched a transformational project in the UK with a new production facility dedicated to the offshore wind market. All these strategic investments are being financed with the support of ECAs as they play a critical role in scaling up deployment of public funds, public guarantees, and private capital.  

How are ECAs adapting to the energy transition in Europe?

Investing massively in Europe’s reindustrialisation and green revolution while we face new challenging business models, have led European ECAs to adopt a more solution-driven approach with the energy transition becoming the cornerstone of their mandate. As such, they have rapidly adapted their products offer, enhancing their ability and flexibility to support strategic projects, with a broader concept of “national interest” and a clear emphasis on sustainability financing. They have reinforced their role as a key enabler for the emergence of industrial clusters of excellence, support for a greener and independent supply chain, and the development of a European exporter base. 

Several “Untied” guarantee and insurance programs (ie. not linked to physical equipment exports) have been released by European ECAs to support national industries and investors in their development abroad as well as in their home country. As an illustration, UKEF has recently expanded its Export Development Guarantee for clean growth projects as applied to JDR UK investment; Euler Hermes has broadened its untied guarantee to support strategic offtakes for Germany including finished goods as executed for Northvolt; Scandinavian ECAs have all launched domestic guarantee products to support investments with a positive impact on climate,  such as Eksfin’s intended support for the Freyr upcoming battery manufacturing plant; BPI has made its Garantie des Projets Stratégiques also applicable to strategic investments in France, and SACE Green Guarantee for Italian green projects, as well as many others… 

How has your business model evolved recognizing the shift in the Export Finance industry?

We implemented our own shift last year, renaming our department Development & Structured Export Finance (DSE), bringing together export & multilateral finance with a more tailored-made solution approach towards sustainable development. This way, we increase the range of risks financeable and the bankability of ambitious projects, embracing innovative technologies, private investment or non-recourse financing with our colleagues from project finance. ECAs also enable us to optimise the size of financings, extend to maximum tenors or introduce local currency funding.

Looking at the first half of 2022, thanks to our shift in DSE, we have been able to support key energy transition and social projects in developed and emerging markets. 
As mentioned above, we structured JDR’s facility with UKEF to fund a subsea power cable manufacturing that will enhance the UK’s growing offshore windfarm capabilities and support the company in its energy transition strategy. Another strategic deal in Europe is the financing of the emerging Korean company, Hanwa EU Energy, to power hundreds of renewables projects in Europe. In Ghana, we supported the construction of an innovative low carbon cement factory, reducing CO2 emissions by 20%, through an innovative structure combining the Swedish ECA and local currency funding extended by Societe Generale Ghana. 

There is more to come, and the fact that Societe Generale ranked #1 lender in the TXF Sustainable deals league table in 2020 and 2021 is a great recognition of our commitment in supporting our clients’ energy transition, in both developing and developed markets.

 

Extra content:
Read Cécile’s interview on ekn website:  https://www.ekn.se/en/magazine/sustainability/uncertainty-creates-opportunity/ 
 

Cécile Camilli Global Head of Development & Structured Export Finance Societe Generale Corporate and Investment Banking