An injection of DKK 185 million into EKF will ensure a green economic reboot
The government and the parties to the agreement have earmarked DKK 185 million for EKF, based on recommendations from eight reboot teams. The money is intended to ensure that Danish companies gain access to risk financing and will contribute towards a green reboot of Denmark's economy.
As part of the "Agreement on the Reboot of Danish Export", EKF, Denmark’ s Export Credit Agency, will be bolstered by a total of DKK 185 million. The reinforcement of EKF will ensure that Danish companies gain access to risk capital in a time when the corona pandemic is causing increasing uncertainty and protectionism on the global markets. This puts export companies in a difficult position. At the same time, the pandemic risks impeding the green transition and resulting in lower levels of investment.
"Corona is still a major uncertainty factor for our export companies, and EKF is ready to help. I want to encourage all export companies facing challenges to reach out to us at EKF. With the new initiatives, we can find solutions for even more companies and for even more challenging markets," says Kirstine Damkjær, CEO of EKF.
The reinforcement of EKF is rooted in the decision from 15 June in the "Agreement on the phase-out of bailout packages, stimulus initiatives and export initiatives" to earmark DKK 500 million in 2020 for a combined export stimulus package. Of this, DKK 485 million was to be used according to proposals from eight reboot teams.
The DKK 185 million for EKF are divided across two different initiatives, which the parties to the agreement have now agreed to implement on the basis of recommendations from the eight reboot teams.
Initiative 1: Capital injection of DKK 125 million
The corona crisis has led to increased uncertainty and a deterioration of the financial situation for several projects and companies. It has led to the need for more risk financing, e.g. for the green transition in new high-risk markets. For this reason, EKF has received a capital injection of DKK 125 million, which will, for example, enable companies to enter countries that would otherwise be deemed too risky.
"This initiative can benefit many companies. First and foremost, we will be able to do more for companies doing business in high-risk countries where EKF's ability to participate has thus far been limited. However, we would also be able to ease the requirements in markets that fall in the middle of the risk scale, which is where you can find many Danish exporters. We expect that the capital injection will act as the basis for the financing of Danish companies for DKK two to three billion within difficult markets," explains Kirstine Damkjær.
Initiative 2: DKK 60 million for project and market maturation at EKF
There are lots of innovative companies in Denmark and hence plenty of good ideas for green projects with export potential. Projects which are yet to find the right kind of form and structure to be realised. The preliminary work can be expensive, and therefore, investors and exporters may find it difficult to finance this phase fully by themselves.
In order to better promote future export success, DKK 60 million have been earmarked for a so-called project and market maturation facility at EKF, which can contribute towards preliminary studies and dispatching of Danish advisers and experts.
"We can now step in and make a difference to export companies at an earlier stage. We encounter many companies with good ideas, so we are pleased to be able to help them mature these ideas. At the same time, we see huge potential in our improved ability to send Danish experts out into the world to disseminate Denmark's knowledge within the green area. By cooperating with authorities around the world, we can generate even better opportunities for Danish companies to move into new markets," states Kirstine Damkjær.