Export and Develop­ment Financing, ExDev

Export and development financing is a financing instrument that combines export credits with aid funds. The aim is to create synergies between trade and aid so that projects contributing to social and economic development in developing countries can be implemented, while Swedish companies gain better conditions to compete internationally.

The regulation entered into force on August 1, 2025, marking the start of a five-year pilot program.

The instrument is administered by EKN in close collaboration with SEK, Sida, and other Team Sweden actors.

To create synergies between aid and trade, so that projects contributing to social and economic development can be implemented in developing countries, while simultaneously strengthening Swedish competitiveness.

The instrument is a combination of a guarantee from EKN, credit from Swedish Export Credit Corporation (SEK), and grant funds, which are to be used to reduce borrowing costs for buyers of Swedish goods and services. Under this arrangement, a bank arranges and administers the transactions.

Export and development financing is based on a combination of three key agreements:

• an export credit agreement between the borrower and SEK with a fixed CIRR rate
• an export credit guarantee from EKN
• a grant agreement between EKN and the borrower

The export credit agreement follows the rules of the OECD Arrangement. This means that terms applicable to traditional export credits—such as maximum maturity, repayment profile, grace period, down payment, and validity period of the offer—also apply when aid funds are used.

Under the export credit agreement, the borrower is obligated to pay interest and principal. Through the grant agreement, a defined portion of these payments is financed with aid funds.

EKN’s guarantee covers the entire loan amount and all interest during the term, including the portion repaid with aid funds.

EKN issues guarantees and disburses aid funds.

SEK offers the export credit at a fixed interest rate (CIRR).

Private credit institutions arrange and administer the credit.

Sida conducts the aid assessment as part of the basis for EKN’s decision.

The work may also involve other Team Sweden actors.

The project must take place in a low- or lower-middle-income country where EKN is open to providing guarantees, lead to social and economic development, and comply with the OECD’s rules for tied aid with a minimum 35% subsidy. A commercial bank will arrange the export credit, which shall be assigned to SEK, Svensk Exportkredit (which offers a fixed interest rate, known as CIRR).

• The financing instrument entails that EKN grants guarantees based on its standard regulations.
• The financing instrument shall comply with the OECD Arrangement’s rules for tied aid and adhere to the OECD DAC’s guidance on the permissible uses of aid funds.
• The instrument is aimed at socially beneficial projects that cannot be financed commercially, such as energy, public transportation, water supply, digital infrastructure, and other socially beneficial infrastructure, in low- and lower-middle-income countries.

• Aid funds may be used for the repayment of export credits, i.e., principal repayment and interest payments. The transactions must be arranged and administered by a privately owned credit institution.
• The combination of aid funds and export financing must always meet the concessionality requirement (at least 35%) and may take the form of, for example:
  - interest subsidies
  - grant funds for repayment of the loan principal 
  - [longer repayment period]

Low- and lower-middle-income countries where EKN is open to providing guarantees which meet the requirements for being granted aid funds according to the OECD DAC. Both public and private borrowers may be eligible depending on the country. EKN’s current country policy for each country is available on the website.

Examples of countries that may be eligible:

Public and private borrowers:

Bangladesh, Benin, Bhutan, Egypt, Ivory Coast, Eswatini, Philippines, Guinea, Honduras, India, Jordan, Cambodia*, Cameroon*, Kenya, Kyrgyzstan, Lesotho, Morocco, Nepal, Nicaragua, Nigeria, Papua New Guinea, Rwanda, Tanzania, Togo, Uganda, Uzbekistan, Vietnam, East Timor*, Mauritania*, and Tajikistan*.

Private borrowers only:

Democratic Republic of the Congo**, The Gambia*, Ghana, Congo, Laos**, Liberia*, Malawi*, Mozambique**, Pakistan*, Sierra Leone*, Sri Lanka, Tunisia*, and Zambia.

*private risk with increased premium
**private risk with restrictions

Please note that the country list may be updated; for the latest information on EKN’s policy for each country.

EKN has chosen to apply a pricing model in which the effects of aid funds are taken into account in the calculation of the guarantee fee. The guarantee fee corresponds to the state’s expected loss under the Ordinance on Lending and Guarantees (2011:211). Since part of the future payments under the credit agreement will be made with aid funds, the expected loss is lower, which allows for a lower guarantee fee than in a standard export credit transaction. EKN has therefore decided to deviate from the principle of the minimum possible premium (Minimum Premium Rate, MPR) as stipulated in the Arrangement for these guarantees.

The terms and conditions for aid funds are governed by a grant agreement between the aid recipient and EKN. The agreement specifies how the funds may be used, the requirements for repayment of the export credit, and the division of responsibility between the parties.

All operations comply with OECD DAC guidelines and Swedish public access and confidentiality legislation. Reporting and transparency are key requirements.

The Government decided on export and development financing after the Parliament (Riksdagen) approved the 2025 budget bill. The regulation entered into force on August 1, 2025.

EKN has been authorized to enter into agreements for transactions in 2026 where disbursements from the aid budget may total up to SEK 2.432 billion. Aid funds for this purpose may be disbursed through 2047.

Exporters and banks are subject to EKN’s standard terms and conditions, with adjustments to comply with the Regulation on Export and Development Financing. Projects must meet aid and sustainability requirements and demonstrate a negative cash flow. Transparency requirements are governed by Swedish law. Before an agreement is concluded, a notification is sent to OECD participants in accordance with the rules on tied aid.

EKN, together with Sida, assesses whether the project complies with the OECD’s regulations on tied aid and the OECD DAC’s guidance on what aid funds may be used for.

The regulation took effect on August 1, 2025. EKN is currently developing procedures for the process. Export companies or banks may contact EKN to discuss the structure of the transaction at an early stage. The budget is limited and is allocated primarily on a “first come, first served” basis.

Decisions on assistance are made internally within EKN (EKNK), and subsequent decisions on the transaction are made at the level corresponding to the project’s value, in accordance with EKN’s standard internal regulations.

In order to assess whether the criteria for granting aid funds are met EKN will receive an opinion from the Swedish Board for International Development Cooperation (Sida). In this statement, Sida will assess whether the export transaction could contribute to social and economic development and welfare in the beneficiary country and whether the project is likely to contribute to achieving the goal set by the Swedish Parliament regarding international development Assistance “to create preconditions for better living conditions for people living in poverty and under oppression”. As a basis for Sida to make this assessment, the applicant is requested to supplement their application with a supporting document. The statements are backed by research, evaluation, or other analyses.

EKN’s export and development financing always requires a Swedish export component, whereas Sida’s guarantees are not linked to Swedish exports.