Export credit finance is key to international project development, says Nepad
It said it allows financiers to develop projects knowing that risks are covered.The use of export credit finance to develop large projects across Africa can help mitigate political and economic risks, according to a representative from the New Partnership for Africa's Development (Nepad).
"These contracts are structured [taking into account] the obligations of the South African government and the foreign government where the project will be developed. By using export risk partners, such as the Export Credit Insurance Corporation of South Africa (ECIC), financiers are able to develop projects knowing that key risks involved are covered," said Lynette Chen, quoted by Engineering News.
Speaking at a public–private partnership (PPP) workshop held on Wednesday (August 31st) in South Africa, she said that Nepad had found that more projects in Africa were being structured using export credit cover.
Also speaking at the workshop, ECIC head of business development Portia Gumbo-Dube said strong institutional coordination is needed between development finance institutions, commercial banks, contractors and governments to "correct the allocation of risks".