Cooperation agreement with United Kingdom Export Finance
KUKE has signed an agreement with its British counterpart United Kingdom Export Finance (UKEF) regarding cooperation on mutual reinsurance of export credits. This is the 16th agreement of this type concluded by KUKE.
KUKE and United Kingdom Export Finance, specialised agencies offering state-guaranteed export credit insurance, have signed a mutual reinsurance agreement. This will allow KUKE to reinsure the loan financing Polish supplies as part of a larger export project fully insured by the UKEF. This agreement operates on the basis of reciprocity, which means that it can also be included in the scope of export insurance guaranteed by the Polish State Treasury for supplies partly carried out by British entities and insured by the UKEF.
It is a great convenience for Polish exporters cooperating on third markets with British counterparties. First of all, it means acceleration of the procedure of insuring international projects by applying simpler financing solutions, i.e. uniform terms of payment for goods delivered by Polish and foreign exporters and obtaining one insurance policy instead of two issued by both agencies in such cases. Regardless of further developments with the UK's membership of the European Union, we are ready to support our domestic companies' projects with British partners in third markets - said Janusz Władyczak, President of KUKE.
Of the 16 reinsurance agreements concluded by the Export Credit Insurance Corporation with other export credit agencies, only four concern countries outside the EU: Canada, Kazakhstan, South Korea and Switzerland. A list of agencies with which KUKE has signed reinsurance agreements is available on KUKE's website.
We try to feature as often as possible, as a reinsurer, in large international transactions in which Polish companies participate in order to reduce the risk and cost of financing and make it feasible. We have already started discussions with the UKEF on several joint projects, where Polish and British companies are present next to each other. We will see the first results in early 2020 - emphasised Janusz Władyczak.
Obtaining export credit insurance guaranteed by the State Treasury from KUKE makes the bank granting such a loan rate it as being more secure, and as a result it is often granted at a lower price, which means lower costs for the borrower.
This is, among others, because for a bank such a loan is less risky, i.e. it constitutes a lesser burden on its capital. Very often a bank grants a loan, only because it is secured by a KUKE policy. In the absence of insurance, financing would not have taken place and therefore the project would not have been implemented.