EKF's strong result and new guarantee schemes to aid Danish exporters impacted by COVID-19

EKF’s new guarantee schemes will be employed to aid Danish export businesses struggling under the coronavirus crisis.

2019 was a good year for EKF with a net profit of nearly DKK three quarters of a billion (DKK 743 million) putting EKF in the best possible position to live up to its purpose and responsibility; to strengthen Danish companies’ ability to export.

“For EKF 2019 was a strong economic year, but in a few weeks the situation has changed completely. The corona crisis creates so much instability in the global economy that we are in a very unpredictable situation. During times like these it is well worth remembering what companies, banks and EKF can achieve together. By working together, we can contribute to helping Denmark get back from the corona crisis. In its capacity as a strong economic instrument to strengthen exports and ensure growth, EKF is there to support Danish companies and the Danish society,” says Christian Frigast, Chairman of the Board at EKF Denmark's Export Credit Agency.

EKF operates globally in more than 100 countries. In 2019, EKF helped secure contracts for Danish exporters worth DKK 15 billion, and the resulting exports helped to create and retain 7,200 jobs within the export firms.

Our portfolio spans a diverse range of transactions from some of the world’s largest wind parks and large-scale infrastructure projects through export of industrial products by large Danish companies to small exporters. 80 per cent of our customers are small and medium-sized enterprises.

EKF is among the major financial players in the world within wind energy and for many years now, we have also supported projects within other renewable energy sources and energy efficiency. In 2019, this was manifested by the renewable energy projects EKF helped finance which are expected to reduce global CO2 emissions by 75 million tonnes of CO2 over the course of their useful life. This is almost one and a half times the total emissions in Denmark in 2019.

The 2020 National Budget provided EKF with extra muscle for green projects of DKK 14 billion under which EKF will be managing more than half of the funds of the newly established Denmark’s Green Future Fund. EKF has a business volume of about DKK 100 billion and an equity of DKK 8.5 billion.

EKF is ready with specific corona initiatives

The corona crisis calls for extra commitment and a wider range of tools has now been added to EKF´s toolbox to get the job done”, says Kirstine Damkjær, CEO of EKF.

“At the turn of the year, we were full of optimism, but that optimism has suddenly been replaced with uncertainty, liquidity problems and lay-offs among Danish businesses. During times like this, EKF will live up to its responsibility for providing those businesses with the security they need when the commercial banks become reluctant to lend them money. We are quick to adapt EKF’s solutions and products to match the current challenges facing the export companies,” says Kirstine Damkjær.

EKF’s is standing by with two new initiatives to companies impacted by the corona crisis. EKF administers the schemes and subsequently, the state takes on the bulk of the risk held by commercial banks and credit insurance companies.

“The Danish Government has extended our guarantee capacity so that we can assist even more Danish companies. And our reinsurance scheme has been extended so that it also covers countries within the OECD and the EU where the customers of Danish exporters are struggling with their liquidity. Under this scheme, we act as the insurance provider of the private credit insurance companies. We do so to make sure that they will not decline to insure Danish export orders given the increased risk. By doing so we help to ensure that the Danish exporters receive the money they are owed if their customers abroad are unable to pay,” Kirstine Damkjær explains.

She stresses that EKF will work even closer together with the Danish exporters and offer support, advice and guidance.

Minister for Industry, Business and Financial Affairs Simon Kollerup is pleased with the positive result and stresses that Denmark's exporters backed by EKF will play a key role in restoring the Danish post-crisis economy.

“Right now a great many Danish companies are facing problems. They lack liquidity, but they still have to pay the bills. This is not just a problem for the companies but also for the employees who worry about job security. It is therefore a good thing that EKF can step in and provide the assistance necessary in order to retain a robust Danish export sector and Danish jobs,” says Simon Kollerup.

Press contact

Morten Wium Olesen, Communications Consultant
Tel: +45 28 19 11 22
E-mail: mol@ekf.dk

Quick facts on the new schemes

Increased access to export credits is a component of the Danish government's business relief packages, and this is why EKF has now launched three new initiatives for Danish exporters. The new initiatives supplement EKF's existing export credit, working capital guarantee and loan schemes for Danish exporters.

Liquidity Guarantee for SMEs (small and medium-sized enterprises with max. 250 employees)
With the new Liquidity Guarantee for SMEs, EKF will be able to facilitate new loans for hundreds of exporting SMEs who have suffered or expect to suffer at least 30% loss of turnover as a result of the corona crisis. Under a Liquidity Guarantee, EKF covers 80% of any bank loss on new lines of credit extended to secure exporter liquidity.
EKF's guarantees will pave the way for new SME bank loans totalling DKK 1.25 billion.

Liquidity Guarantee for Large Corporates
EKF can also provide guarantees for large exporters suffering financial loss as a result of the corona crisis. The Liquidity Guarantee for Large Corporates (more than 250 employees) covers 70% of any bank loss, but is otherwise identical to the guarantee scheme for SMEs.
EKF's guarantee capacity totalling DKK 7.1 billion will pave the way for new bank loans to large businesses.

Reinsurance of export orders within the EU and OECD
Since the financial crisis, EKF has reinsured private credit insurance companies underwriting export orders with a 180-day credit period in less secure markets.
As a result of the corona crisis, international customers in more secure markets have also become risky to trade with. EKF has consequently secured an enlargement of the scheme so that it also extends to EU Member States and other high-income countries within the OECD.
EKF can now reinsure export orders within the EU and OECD countries up to a total of DKK 1.5 billion.

Read EKF's annual report 2019 here