Improving the Role of Eximbanks/ECAs in the OIC Member States
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 Saudi Export Program under the Saudi Fund for Development
 Export Credit Guarantee Fund under Albania Investment Development Agency
4.4 Relationship with Government
Most ECAs have a complex relationship with their governments. There are a number of “touch
points” in which an ECA interacts with the government. These include:
 Financial
 Participation in governance
 Policy direction
4.4.1. Financial
There are a number of ways OIC governments provide financial support to their ECAs. In a state-
owned entity, the government plays a critical role in capitalization and thereafter, to ensure the
financial sustainability of the entity.
There are various modalities of capitalization by the government. In most cases, this is a single
capital injection at establishment and, in some cases, the government may make additional
injections over time, or if the entity is profitable, the ECA will pay a dividend out of retained
earnings, as Malaysia EXIM and Nigeria EXIM have done recently. In a mixed state/private
company, a government may be involved in initial capitalization and subsequently withdraw as
shareholder or continue to maintain shareholder status (with majority or minority shares). In
the case of Algeria’s CAGEX, the government provided the initial capitalization and withdrew,
allowing public and private entities to acquire shares in the company.
Another way in which the government may provide financial support is to fund, guarantee or
reinsure certain transactions, as is the case for Turk EXIM and Egypt’s ECGC. This allows the ECA
to support projects or transactions that it would otherwise not have the capacity or appetite to
support.
A third way is for the government to facilitate borrowings of the ECA, by either lending direct to
the entity, or as a backer/guarantor of the ECAs’ borrowings. In the latter case, this is either
explicit, in that the entity borrows in the name of the government, or there is a government
guarantee, in the event the entity defaults.
A number of ECAs have obtained international credit ratings from Moody’s or others which helps
them be able to borrow in the international capital markets, including Indonesia Exim,
KazExportGarant, Turk Exim, and Uzbekinvest.
A final means for the government to provide financial backing to an ECA is through budgetary
support of their operations. For instance, in the case of Indonesia Eximbank, the government has
the obligation to cover any capital deficit above a certain threshold, while any deficit in Iran’s
EGFI’s budget is absorbed by the national government. Some entities are capitalized in the form
of grants and loans, while others such as Indonesia ASEI’s budget is set by parliament as part of
the country’s annual budget.