Amendments to Proposition 34 S to the Storting (2011–2012) Export Financing

On 18 November 2011, the Government submitted Proposition 34 S (2011–2012) Export Financing to the Storting. The proposition presented the framework for a permanent governmental state-funded export financing scheme. In addition, the establishment of an interim scheme was proposed. The purpose is to ensure competitive export financing for the Norwegian industry.

In the Council of State today, the Government submitted Proposition 42 S (2011–2012) Amendments to Proposition 34 S (2011–2012) Export Financing. The proposals laid down in Proposition 42 S involve amendments and clarifications of previous draft proposals, and certain new draft proposals. The main amendments are outlined below:

Acquisition of loans with previous interim disbursements: In Proposition 34 S, it is proposed to the Storting that the state may acquire certain loans disbursed by Eksportfinans as from 18 November 2011 until an interim scheme is operative. The purpose of this was to ensure that the business sector would not experience any disruption in the supply of export financing in the period before the Storting had made the necessary decisions. In Proposition 42 S, the Government proposes that loans for which interim disbursements have been made prior to 18 November 2011 may also be acquired in their entirety, to the extent that Eksportfinans finds practical.

Acquisition of loans for which refinancing has been requested: In the time ahead, Eksportfinans will receive an increasing number of requests for renegotiation of loans’ interest margins. In such renegotiations, the parties are not obliged to continue the loan agreement, and Eksportfinans may therefore demand redemption of the loan. In Proposition 42 S, the Government proposes that the state should be able to take over such loans from Eksportfinans if the borrower is unable to find alternative financing. This involves increased security for Eksportfinans’s borrowers.

Commitment: It is proposed that no upper limit be set for the state’s commitments for new loans for projects that qualify for CIRR.

As a consequence of the above-mentioned amendments, the Government proposes that the allocation to the state-funded export credit financing scheme be increased by NOK 10bn from NOK 30bn to NOK 40bn.

Eksportfinans will continue to manage a considerable portfolio of previously granted loans for many years ahead, both loans to projects that qualify for CIRR and other forms of market loans. The amendments proposed by this proposition will not involve any change in this practice.