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4.-7.10. 2022

International Engineering Fair

EGAP increases the territorial limits for Belarus, Azerbaijan and Kazakhstan


As of today, the Export Guarantee and Insurance Corporation increases the territorial limits of insurance for exports to Belarus, Azerbaijan and Kazakhstan. The General Director of EGAP Jan Procházka announced it at the International Engineering Fair during the Conference on Exports Funding Outside the EU. The credit insurance company is responding to the outage of exports to Ukraine and decreased exports to Russia in connection with EU sanctions against Russia.

"We took the decision for this step based on the awareness of several business cases. The business department recorded increased interest mainly in Belarus and Azerbaijan and it is no secret that the limits have been exhausted by more than 80 percent in the case of these two countries," Jan Procházka explained. According to him, the events of 2014 that nobody expected put EGAP get into a situation where they have to continue with the changes started up so far, but mainly show that state support of exports has its undeniable sense and they as a credit insurance corporation play a key role. Of course this year the complicated situation is caused by the conflict in Ukraine and sanctions against Russia. Loss of trade in Ukraine alone amounts to billions of Crowns and everyone is watching the effects of the sanctions. "No one is able to say at this point how high the outage of exports may be in the coming months. CIS countries may constitute some compensation when exporting; from EGAP’s point of view there  is greatest interest in Czech goods and technologies in Azerbaijan and Belarus. For now there is no danger that we would refuse to insure quality business cases in these countries," said Procházka. Therefore, there is a free limit for new business insurance of 7.8 billion Crowns for Belarus as of today. Business transactions currently under negotiations include export of locomotives, supplies for the construction of the underground and several contracts in the  sector. Nearly 15.5 billion Crowns is now the free limit for Azerbaijan. According to Deputy Commercial Director of EGAP Marek Dlouhý, Czech companies can find their use mainly in large infrastructure projects. "We have information about new business cases of modernization and construction of the railway, road construction, turbines supply for water power plants and Czech companies could also participate in the construction of an artificial island," Marek Dlouhý comments on the possible future activities in Azerbaijan.

The growing interest in new business also accounts for the increased limit for Kazakhstan. There is now a free capacity of more than 20 billion Crowns. Czechs could build a power generation centre there, supply equipment for a coal mine and there is a growing interest in components for the assembly of Škoda Auto vehicles. Increased limits have been appreciated at the conference by exporters and representatives of banks providing export financing. "Increased limits for Azerbaijan and Belarus copy the current business opportunities of Czech exporters. We are prepared to continue offering export financing for these territories," added Jana Ševčíková of ČSOB. Currently, there is also an effort to help exporters to new markets in this context. EGAP has already managed to support Czech export into new territories, they are just smaller projects and business cases for now. The company will insure firms exporting to countries in Latin America, Africa or some Asian countries.

EGAP has also published new data on this year’s export insurance at the International Engineering Fair today. In the first nine months of 2014, exports of more than 35 billion have been insured. "It's only about 2 billion less than this time last year. And all this while we are struggling with the outage of exports to Ukraine and attenuation of exports to Russia, i.e. with factors that we did not expect in any event," said EGAP CEO Jan Procházka. During the 22 years of its existence, EGAP had thus insured exports for 710 billion Crowns.

Date: 1 Oct 2014 12:00:00

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