UK Export Finance raises its Ukraine cover limit from £3.5 billion to £6.5 billion

The British government has raised the ceiling on state-backed export credit for Ukraine, instructing UK Export Finance (UKEF) to lift its market limit for the country from £3.5 billion to £6.5 billion. The decision, published on 28 October alongside the Budget, adds £3 billion of capacity for projects linked to Ukraine’s defence, energy and reconstruction.

Why the limit was raised

According to the correspondence published on GOV.UK, UKEF’s chief executive wrote to the Secretary of State for Business, Innovation, Science and Trade that the agency was close to capacity against its existing £3.5 billion limit. The Secretary of State replied that it is in the national interest for UKEF to remain on cover for Ukraine and to increase the limit to £6.5 billion. The government says the change responds to a growing pipeline of opportunities linked to Ukraine.

Business Secretary Jonathan Reynolds said the extra financing will “back British business to support critical infrastructure across a range of sectors” as Ukraine rebuilds, adding that British firms will continue to play a crucial role in supplying skills, technology and equipment.

What UKEF has already financed

In its announcement, the government lists several examples of projects backed so far: financing for more than 5,000 air-defence missiles from the Belfast-based company Thales, nuclear fuel supplied by Urenco in north-west England, the reconstruction of six bridges in the Kyiv region using Scottish and Welsh steel, and the supply of former Royal Navy mine-countermeasure vessels. It says the additional capacity will allow UKEF to consider “the next generation of projects” critical to Ukraine’s defence and resilience.

UKEF is the UK’s export credit agency. The government states that it has £130 billion of financing capacity overall and a wider mandate to support exports alongside the government’s economic and strategic priorities.

A wider export finance change

The Ukraine decision was announced together with an expansion of the General Export Facility, the scheme under which participating lenders can provide working-capital finance to exporters. The amount lenders can offer automatically, without seeking transaction-specific approval from UKEF, will rise from £10 million to £15 million, and eligibility will be widened so that more businesses, in particular smaller firms starting to export, can use it. The government says lenders will gain flexibility and speed once the measures are introduced.

Part of a broader UK package

The export credit decision sits beside other British moves on Ukraine in recent days. On 26 October the UK, Ukraine and Latvia agreed to extend a scheme to trace and verify grain, as reported in UK, Ukraine and Latvia sign deal to extend grain-tracing scheme against Russian theft of Ukrainian grain. At EU level, member states unblocked military support in EU Council mobilises €4.9 billion for Ukraine under the European Peace Facility after months of deadlock.