§ Lord Moynihanasked Her Majesty's Government:
69WAWhat consideration they have given to the premium to be charged on the proposed Exports Credits Guarantee Department line of credit to Cuba: and what evidence they have that any such rate would be competitive against our European counterparts; and [HL1798]
What specific criteria were used to support the anticipated premium on the proposed Exports Credits Guarantee Department line of credit to Cuba: and what is the current state of the facility. [HL1799]
§ The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Sainsbury of Turville)The ECGD has opened negotiations with the Cuban authorities regarding ECGD support for a line of credit to finance the export of UK capital goods and associated services to Cuba under the department's "good projects in difficult markets" (GPDM) scheme. ECGD has recently indicated an approximate premium rate to the Cubans following a preliminary appraisal of all of the risks, which was carried out in accordance with ECGD's standard risk assessment methodology for GPDM transactions. This appraisal included an examination of' the inherent project and country risks, the proposed security structure and the arrangements for purchase of the project deliverables. For any specific exports under the lines of credit, ECGD will carry out its normal business principles due diligence on the impacts of both the exports and the associated project.
ECGD's policy is to match premium to risk and not to seek to match the rates of other export credit agencies (ECAs).
Discussions with the Cubans are continuing.