§ Mr. Sillarsasked the Secretary of State for Trade what progress has been made towards the introduction of ECGD as a facility to provide pre-shipment finance for exports.
§ Mr. ShoreIt will be recalled that the intention is to facilitate the provision, by ECGD guarantees, of pre-shipment finance for the larger type of export projects. Access to the scheme will be available for desirable overseas contracts for capital goods or projects valued at £1 million or more and involving a manufacturing period of at least one year. These contracts will have to be insured with ECGD. The facility will supplement, but will in no way replace, the normal sources of working capital. Each case will need to be negotiated individually between the exporter, his bank and ECGD. The finance made available will not be subsidised, but the total cost to the exporter, including ECGD premium, is expected to be only slightly higher than that of normal overdraft finance.
The exporter will be able to draw down the necessary manufacturing finance from a guaranteed loan in accordance with a predetermined schedule against evidence of the progress of work and contract expenditure; and the loan will be liquidated eventually by his cash receipts on delivery or completion of the project. A number of details have still to be resolved with the banks. However, where export contracts meet the guidelines set out 239W above for the facility, exporters may, if they wish, make inquiries from ECGD as a preliminary to presenting a case in due course.