New state-owned company for export financing – Eksportkreditt Norge AS (Export Credit Norway)

The name of a new state-owned export credit company is to be Eksportkreditt Norge AS (Export Credit Norway).  The company will be organized as a state-owned limited liability company and is to be established by 1 July 2012.

The Norwegian Government will on Friday 27 April propose to the Storting the establishment of a new state-owned company to manage the Norwegian state-funded export credit scheme.

- Export Credit Norway will be established in order to ensure a robust and competitive export financing scheme for Norwegian industry. The loans will be financed by the state, which ensures companies’ access to credit in situations where credit is not available in the capital markets. All loan applicants who meet the requirements will be offered loans, says Minister of Trade and Industry, Trond Giske.

Export Credit Norway is to provide loans for export financing in the form of state-subsidised CIRR loans and CIRR-qualified market loans on commercial terms. CIRR loans are loans granted to borrowers for financing of export projects on terms compliant with the OECD “Arrangement on Officially Supported Export Credits”. The rate of interest is fixed on conclusion of the agreement, while the loan is normally disbursed somewhat later. Before drawing on the loan, the borrower may choose to take advantage of either the previously fixed CIRR interest rate or the current market rate. Loans at the current market rate are referred to as CIRR-qualified market loans.

No limit concerning large exposures
Export Credit Norway will take responsibility for the whole process associated with sale and promotion, processing of applications, granting, disbursing and following up loans. Loans provided by the company will be owned by the government and recorded in the government balance sheet. The company will receive grants from the government for its entire operations. The grants will be specified by the Storting in the annual budgets. All loan applicants who meet the requirements will be offered loans, and there will be no limit concerning large exposures.  It is proposed that further rules concerning the company’s activities and the relationship to other legislation be provided by law.

It is important that the CIRR-qualified market loans are market-based priced to ensure compliance with the state aid rules in the EEA-agreement. The Ministry is in dialogue with the EFTA Surveillance Authority concerning a pricing system that ensures this.

Employee accepted offers to work in the new company
To be able to able to serve their clients in an efficient manner from day one, Export Credit Norway need to possess competence within the field of export financing. The Norwegian government therefore entered into an agreement with Eksportfinans ASA to offer employment in Export Credit Norway to those of Eksportfinans ASA’s employees with responsibility for CIRR-qualified loans and associated activities. The principles of the Working Environment Act regarding transfer of undertakings were adopted as a basis for the agreement, and the offer of employment in Export Credit Norway was accepted by all concerned. This gives the company skilled employees with expertise to manage and process loan applications in accordance with the current rules and regulations.

 - I am very pleased that those of Eksportfinans ASA’s employees that managed the former state-funded export credit scheme have accepted offers to work for Export Credit Norway.  This is important to ensure continuity for Norwegian industry, says Trond Giske.

 The Ministry has appointed an Interim Board with responsibility for directing work on the establishment of Export Credit Norway. The Interim Board has begun a process to hire a Chief Executive Officer and a Chief Financial Officer. The Interim Board is also working to establish necessary infrastructure and control systems to ensure that the company will be operational and able to manage loan applications from day one. The company will be located at Hieronymus Heyerdahls gate number 1 in Oslo.