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The Middle East region and the GCC in general have ambitious targets for growing their non-oil economies, and the establishment of export credit agencies (ECAs) to support that ambition, as we’ve seen in other global markets, is an important move towards realizing that ambition.
In my career, which began with HSBC back in 2003, based in London, India, Hong Kong and now Dubai, I’ve always been fascinated by infrastructure finance. Working on ECAs has always been part of this — and I’ve seen the product evolve into the transformational feature of export finance that it is today. I truly believe that the decarbonisation agenda of MENAT economies can be supercharged via effective use of ECAs.
The reason I believe ECAs are so important is twofold. First, they’ve responded to the challenge of the pandemic via the emergence of domestic programs. ECAs stepped up to support key exporters in their home markets to ensure they would get through that challenging period. One of the most interesting of those programmes was the UK Export Finance Export Development Guarantee (EDG) scheme.
Second, we’ve also seen the growth of untied programs such as the SACE Push program, where SACE is trying to promote future exports by building financing relationships with the borrowers they see as being high potential importers from Italy. The Japanese and Korean ECAs have had untied programmes for a long time and Bpifrance has announced a program as well.
The Middle East is well known as being a provider of energy and it’s important that, via the development of renewable energy infrastructure and industries here, the region maintains its place as energy supplier to the world.
I see this region leading the globe on some of these new, clean and green, sustainable sources of energy. For example, our clients globally are certainly talking about hydrogen, but most of them are still just exploring the idea or building pilot projects. In the Middle East we’re already building green hydrogen at scale, spending USD bns.
It’s vitally important to what we’re doing at HSBC, and is a big part of the spend here in the Middle East and globally. The energy transition is going to require a lot of investment financing, and that’s what we’re here to do.
This op-ed was written by Manav Futnani (LinkedIn), global co-head of export finance and head of Middle East, North Africa and Turkey infrastructure and asset finance at HSBC. A version of this article appeared in TXF News on 8 March, 2023. HSBC’s column in Enterprise appears every second Monday.
