This is the third and final article in our series examining ECA financing. The previous two articles discussed the fundamentals of ECA financing and the advantages and disadvantages it may bring to any project. This article will examine recent trends in the ECA financing sphere in the context of shifting political and economic circumstances and, therefore, aims.

Current trends

ECAs have continued to evolve as governments seek to align financing tools with broader political and economic objectives. For the first time in a while the ECA financing universe appears particularly dynamic:

Response to the Iran conflict: as at the date of this article the fundamental drivers for ECA finance adoption in the GCC remain in place in the wake of the conflict, as Gulf states remain committed to diversifying their economies and exploring external financing for mega and gigaprojects. At the time of writing, major credit rating agencies, including Fitch and S&P, have maintained stable ratings for GCC sovereigns and banks, although they have cautioned that a prolonged or expanded regional conflict could lead to downgrades[1] as well as impact the risk appetite of ECAs and lender credit committees.

The Iran conflict has prompted some to reassess risk and strategy, and also precipitated an increase in war-risk surcharges and insurance premiums, for which some ECAs provide coverage. GCC governments are already making use of their substantial financial buffers to offset temporary disruptions in revenues and, in this environment, ECA financing could be appealing as a reliable enabler of capital for critical infrastructure (expected to play a significant role in the region’s post-war economic recovery). 

Increasing policy focus: ECAs are increasingly being deployed not just to promote exports but also to advance strategic policy agendas. A notable current example is US Exim’s willingness to consider supporting projects located within the United States. Traditionally, ECA mandates focused on financing overseas buyers of domestic goods and services, but US Exim’s shift reflects the political priority of shoring up domestic supply chains, strengthening energy security, and fostering industrial resilience. Similar policy-driven interventions are emerging across other jurisdictions, with ECAs explicitly tasked with supporting critical minerals, semiconductors, and other strategic sectors. In this regard, GCC projects that promote renewable energy export or are viewed as beneficial for regional stability may be attractive to ECA providers. 

Willingness to explore untied financing: we are witnessing a growing use of untied finance as exemplified by Neom’s recent Sace-backed facility, with ECAs increasingly willing to provide loans or guarantees which achieve strategic aims, rather than facilitate the export of a specific volume of goods or services. In many cases the untied financing has been deployed to secure long-term access to resources, technologies, or supply chains critical to the home economy, but it is conceivable that the use-case may become broader as geo-politics evolve. This reflects a broader strategic pivot (for the reasons outlined above), with ECAs serving as tools of economic security as much as trade promotion.

Growing focus on the transition: ECAs remain central to the global energy transition. A continued focus on supporting decarbonisation projects is reshaping their portfolios, with preferential terms and enhanced flexibility offered for renewable energy, clean hydrogen, carbon capture and other transition technologies. We have also seen ECAs being able to more quickly mobilise and offer flexibility of terms for projects that are at the forefront of the energy transition.  These adjustments have been reinforced by the recent reforms to the OECD consensus.

Sophistication of financing structures: over time, ECA involvement has become more creative. Blended solutions combining ECA-backed tranches with commercial debt, Islamic finance, or multilateral development bank participation are increasingly common, although we would note here the resultant need to address complex intercreditor issues in such contexts. In the GCC, such structures have proven particularly effective in delivering large-scale energy and infrastructure projects aligned with national diversification and decarbonisation agendas.

Use of supplier credit in innovative ways

Traditionally used to support short-term, trade finance, Supplier Credit structures are evolving. We have seen Supplier Credit adapted to facilitate long-term financing of critical infrastructure projects, particularly where an EPC contractor has a long-standing relationship with its home-country ECA and can ‘bring financing’ as part of its wider offering to a developer or procurer. This innovation can enable the EPC contractor to offer deferred payment terms to the developer or procurer, underpinned by a sale of the receivables (constituted under the EPC+F Contract) to banks or financial institutions who have relationships with the EPC contractor and are ultimately supported by an ECA. 

By integrating project delivery with an ECA-backed financing solution, this model provides governments and state-owned entities with a viable pathway to fund large-scale infrastructure and energy projects domestically. It can also unlock new sources of liquidity for developers and procurers, which can be of great value if the host country has a pipeline of ambitious infrastructure projects which may consume a significant portion of the liquidity in the local banking market.

ECA-backed contractor financing

Under this model, the contractor arranges ECA-backed financing supported by a deferred payment mechanism for its delivery of the project, allowing the developer to pay once the project begins generating revenue. Instead of immediate cash payments, the project company issues promissory notes or bills of exchange upon the contractor’s completion of agreed milestones under the EPC+F contract. These instruments are then sold by the contractor to an ECA-backed bank or financial institution at a discounted value, transferring the payment obligation to the purchasing lender. The ECA guarantee mitigates the bank’s risk in the event the project company fails to pay at maturity.

Set-off rights

Supplier financings provided on this basis typically do not afford the project company with set-off rights against the EPC contractor once a promissory note or bill of exchange has been issued. Any claims the project company may have against the contractor (e.g. for non-performance or delay) must instead be pursued separately and cannot be used to withhold or reduce payment under the notes or bills of exchange. Key reasons for this include the following:

• Lenders purchasing the receivables require the underlying payment obligations to be unconditional, ensuring their exposure is limited to non-payment by the project company. This reflects the scope of ECA cover - which extends solely to the credit risk of the project company, rather than insuring against the contractor’s delivery or project execution risk.
• Allowing set-off rights would create significant financial exposure for the EPC contractor. If the project company could offset claims against the receivables (e.g. for defects or non-performance), the contractor would need to agree to a corresponding repurchase obligation under its Receivables Purchase Agreement with the lenders. In a scenario where the project company rejects the works entirely, this could trigger a requirement for the contractor to repurchase all outstanding receivables, resulting in a significant financial liability. This risk would need to be reflected as a contingent liability on the contractor’s balance sheet, which could make the transaction commercially unsustainable, especially where the receivables are high value.

Typically, the project company’s protection lies in the process leading up to its issuance of a promissory note or bill of exchange under the EPC+F contract – which should not oblige the project company to issue such instruments if there are unresolved issues with the works. This allows developers to address certain performance concerns pre-emptively and before a receivable is created – though this protection depends on the project company being aware of any defects or delays at the time of issuance, which may not always be the case.

To mitigate this risk, developers should ensure that the EPC+F contract includes robust legal and commercial safeguards. These may include:

• milestone-linked performance verification before payment instruments are issued; 
• rights to withhold issuance of notes in case of unresolved defects; 
• transparent reporting and inspection rights; and 
• adequate performance security (e.g. bonds or guarantees) to cover non-performance risk.

By negotiating these protections upfront, developers can better manage delivery risk and avoid unintended financial exposure under this type of supplier credit arrangement.

Concluding the series

In summary, ECA financing remains a steadfast pillar in the delivery of critical infrastructure globally, providing reliable support to ambitious projects across sectors and geographies. This enduring role continues to underpin large-scale developments, providing liquidity, enhanced economic returns and risk mitigation for developers and procurers.

At the same time, ECA financing is undergoing significant transformation, driven by increasing alignment with governmental policy priorities. Certain ECAs are now as focused on securing economic security and advancing strategic sectors as they are on promoting exports, reflecting shifting geopolitical dynamics.

The evolution of financing structures and the innovative use of Supplier Credit further illustrates a newfound creativity in the sector, enabling developers and procurers to access new sources of liquidity and navigate increasingly complex project demands. As ECAs continue to adapt, their capacity to support ambitious infrastructure projects will remain vital in an ever-changing global market.

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