Finnvera: Export Credit Agency guarantees exports and assesses risks on a long-term basis - The aim is to secure the continuity of exports
The long-term nature of financing is a key factor in Finnish export companies’ and foreign buyers’ commitment to transactions. Trade negotiations are long processes, especially when talking about large-scale commodities such as a cruise ship. In 2015, Finnvera made the credit decision on the Mardi Gras ship handed over by the Meyer Turku Shipyard to the Carnival Cruise Line shipping company today.
The COVID-19 pandemic has had a particularly heavy impact on the tourism and cruise shipping industries, some of the most significant sectors in terms of Finnvera’s responsibilities.
“The economy is shaken by the ongoing pandemic like never before. Export projects for large corporates are typically long-term investments, and both in upturn and in times of crisis, you have to stay calm. Negotiations may take place at an upward trend and financing will begin amid the crisis. Even a 10-year payback period can accommodate ups and downs. We aim to secure the continuity of exports and look beyond each economic cycle while assessing the risks,” says Jussi Haarasilta, Executive Vice President of Finnvera.
“Mardi Gras is a stunningly beautiful ship as well as a game changer for our industry and Meyer Turku and Finnvera have been outstanding partners throughout the entire process,” said Christine Duffy, president of Carnival Cruise Line. “We’re very pleased with Mardi Gras and we are eagerly anticipating the arrival of her sister ship, Carnival Celebration, scheduled to enter service in 2022.”
Financing is part of export transactions and the competitiveness of exports
Finnvera has also had the opportunity to guarantee working capital financing for large companies and their needs arising from the COVID-19 pandemic. The maritime cluster has had a major impact on the economy and employment, particularly in Southwest Finland, but also nationally through subcontracting networks. Finnvera guaranteed Meyer Turku Shipyard EUR 250 million in short-term financing.
During the first half of the year, Finnvera granted approximately EUR 1.7 billion in export credit guarantees, export guarantees and special guarantees. This was a little over one fifth less than in the corresponding period last year. In quantity, the demand for financing for export transactions has risen, but the euro amounts have fallen, indicating the outlook for exports and the economy.
Generally, the statistics show that export quantities and volumes of orders have decreased this year. As the global economic cycle grows weaker, the role of export credit agencies is typically emphasised and the demand for financing increases.
“Financing is part of export transactions and the competitiveness of exports. A long-term approach also means it is sensible to bring major investments to completion, even in uncertain circumstances. This brings a certain level of stability to the Finnish export industry,” says Haarasilta.
Jussi Haarasilta, Executive Vice President, Large Corporates, Finnvera, tel. +358 29 460 2601