August 18, 2022

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Treasury backs £3 billion export financing package deal for war-torn Ukraine | Enterprise publication

The Prime Minister is placing his weight behind a brand new £3 billion export financing package deal geared toward strengthening Ukraine’s navy defenses in opposition to Russia and rebuilding the nation sooner or later.

Sky Information has discovered that Nadhim Zahawi has informed Worldwide Commerce Secretary, Anne-Marie Trevelyan, that he helps the request for credit supplied by the UK’s Export Finance Group (UKEF). .

In a letter despatched to Ms Trevelyan and copied to the Division of Protection, the International Workplace and 10 Downing Avenue, Mr Zahawi mentioned he considers it important to proceed to help the Ukrainian authorities in any method potential. and exhibit our religion in the way forward for Ukraine”.

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A Whitehall supply mentioned the prime minister had performed an energetic function in progressing the deal since taking workplace just a few weeks in the past.

UKEF’s credit score amenities embody £2.3 billion to fund navy contracts recognized by the Ukrainian authorities, the remaining £700 million for reconstruction initiatives.

Insiders surmise that corporations akin to BAE Methods and Babcock Worldwide are seemingly amongst these signing particular person contracts with UKEF.

In keeping with Mr Zahawi’s letter, which was seen by Sky Information, his help for the deal depends upon resolving authorized questions relating to the “compatibility of those amenities with regulatory obligations”. management our worldwide subsidies”.

“Clearly Ukraine is a high-risk market to do enterprise with, and we’ve got to confess the chance of loss is large,” he wrote.

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“Subsequently, UKEF should additionally proceed to attenuate Exchequer losses as a lot as potential.”

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The Prime Minister added that every one particular person contracts would additionally require Treasury approval.

In March, Ms Trevelyan wrote to Louis Taylor, chief govt of UKEF, instructing the company to take care of a £3.5 billion “market cap” for the nation.

Whereas the £3 billion help is modest given Ukraine’s navy and reconstruction wants, it underscores the central function Britain performs in offering worldwide help to the nation.

A supply near the UKEF says it has supplied Ukraine with £23 million in monetary safety, together with help for a industrial cargo of COVID-19 assessments to the nation’s Ministry of Well being forward of the Russian invasion. .

The Treasury and UKEF each declined to touch upon the brand new credit.