Recent Amendments To The OECD Allowing ECA To Offer 95% Coverage On Export Contracts

The fall-out from the COVID-19 pandemic aggravated what the Organisation for Economic Cooperation and Development (the OECD) described as market failures¹ in which the private sector has been hesitant to provide insurance cover for low and middle income countries.

Under the Arrangement on Officially Supported Export Credits (the Arrangement), first enacted in 1978 and most recently updated in 2023, export finance transactions must feature a downpayment of 15%. To counter these perceived constraints and as part of a broader modernisation package², this down payment was reduced from 15% to 5% in 2021 through a Common Line agreement, CL-XCR 2/2021. As of 12 December 2023, and following agreement between Participants³, the OECD extended this Common Line agreement until 13 December 2024 (CL-XCR-02-2023, the Common Line agreement).