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Executive Vice President’s review of 2023: A busy and positive year in export financing despite uncertainty

Jussi Haarasilta, Executive Vice President, Large Corporates
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Last year was a busy one in terms of export financing, and export deals were concluded despite the challenging situation. The altered geopolitical situation caused uncertainty, and country risks have increased. Higher costs and rising prices of financing pose challenges to some companies. We have started seeing some green transition projects, and Finnvera welcomes the opportunity to promote them, says Executive Vice President for Large Corporates’ business Jussi Haarasilta.

What was 2023 like from the perspective of export financing? 

From the perspective of export financing, the year was busy and in many ways positive. Despite an uncertain operating environment, the focus was strongly on the future, and the year brought new export projects and other undertakings. 

Finnvera currently has exposures in 85 countries. The altered geopolitical situation caused uncertainty, and country risks have increased. A good example of this is Turkey, a traditional export country for Finnish companies, which is struggling with a turbulent economic situation. This was reflected as a growing demand for Finnvera’s export credit guarantees. In Turkey, the most important sectors for export financing have been telecommunications, pulp and paper, mining and the metal industry.

Export deals were concluded during the year despite the challenging situation. The number of export transactions remained roughly unchanged and at the same level as in 2019. Many factors influence this situation. Companies have to some extent succeeded in finding substitute export markets since Russia was excluded from credit insurance. The number of applications for new export credit guarantees is also at the same level as in previous years.

Amendments to the OECD Arrangement, which enabled longer loan periods, were significant. Countries support their companies in coping with tougher international competition and promote the green transition. International agreements offer protection against unfair competition. The OECD Arrangement is a response to the financing conditions offered by China, which does not participate in the Arrangement, and to the needs of the green transition.

What were the biggest successes and challenges of the year? 

I find the setting of climate targets and more detailed CO2 emissions data great steps forward. They help us identify Finnvera's importance as an enabler of investments in new, cleaner solutions. The handover of Finnvera's largest financing project of all times, the cruise ship Icon of the Seas, from the shipyard to the client was also an exciting moment. I would also highlight as a positive the conclusion of a framework agreement on reinsurance with EXIM, or Export-Import Bank of the United States, which I believe will promote telecommunications projects. 

Our clients have been affected by inflation, rising interest rates and geopolitical challenges. The number of individual projects presenting with problems went up towards the end of the year. Finnvera typically finances large industrial investments, in which the increased costs have created problems and delayed investment decisions. We have continued to reduce our exposure relating to Russia during the year. 

What is the outlook for 2024 like?

We are facing year 2024 confidently. It is specifically in such uncertain times that the significance of export financing is emphasised for the competitiveness of companies. We have started seeing some green transition projects, and Finnvera welcomes the opportunity to promote them. They are typically large investments that take time to implement. 

We are seeking a new approach to promoting exports. While export credit guarantees and export financing are usually driven by demand, in the future we will be working on behalf of export companies even before they have bagged a concrete deal. The Trade Facilitators who started in their roles in early 2024 will seek export opportunities around the world together with other Team Finland actors. 

How is corporate responsibility visible in Finnvera’s business? 

We have improved our emissions calculations, set a climate target and defined criteria and incentives for climate projects. These are concrete steps towards promoting corporate responsibility in export financing. Export credit agencies are typically involved in financing new investments, which gives us a natural role in facilitating lower-emission investments based on better technology. In its mission as a provider of export financing, Finnvera promotes the competitiveness of Finnish exports and creates prosperity in Finland.

Read also

Finnvera’s Annual Review and Sustainability Report 2023: Export financing almost equalled the previous year's level (PDF)

Take a look at Finnvera’s year 2023

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