Arrangement and sector understandings
The main purpose of the Arrangement is to provide a framework for the orderly use of officially supported export credits by fostering a level playing field to encourage competition amongst exporters based on the quality and prices of goods and services exported, rather than on the most favourable officially supported export credits
About
The Participants to the Arrangement are
The Participants to the Arrangement are Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye, the United Kingdom, and the United States.
Further information on the Arrangement
The Arrangement is a "gentlemen's agreement" amongst its Participants. It places limitations on the financing terms and conditions to be applied when providing officially supported export credits and tied aid.
The Arrangement applies to all officially supported export credits with a repayment term of two years or more. It does not, however, apply to military equipment nor to agricultural commodities. Export credits provided in accordance with the Arrangement benefit from a safe haven clause in the WTO’s Agreement on Subsidies and Countervailing Measures.
Some of the rules laid out in the Arrangement are sector-specific and are detailed in the sectoral annexes of the Arrangement (called “Sector Understandings”).
The Arrangement prohibits the provision of officially supported export credits and tied aid for unabated coal power plants.
Key messages
The Arrangement first came into existence in 1978, building on the export credit “Consensus” agreed to among a small number of OECD countries in 1976. Since then, it has been regularly developed and updated to reflect Participants’ policy needs and market developments.
The Evolution of the Arrangement provides an overview of the milestones since its adoption in 1978, and a detailed list of all the changes made since 1992 with links to the previous versions of the Arrangement.
Latest updates to the Arrangement
The current Arrangement on Officially Supported Export Credits is the September 2024 version, which became applicable as of 2 September 2024..
Compared to the previous version (July 2023):
- the sunset clauses relating to Project Classes G (Low emissions manufacturing) and I (Clean Energy Minerals and Ores) of the Climate Change Sector Understanding were replaced by a review clause with a 30 June 2026 deadline (Annex I, footnotes 6 and 10); and
- the temporary 100 basis points margin of the CIRR was extended for another year (Annex XII, footnote 3).
The Climate Change Sector Understanding (CCSU) (Annex I of the Arrangement) was originally agreed with a reduced scope (Renewable Energies and Water Projects) in 2009. Since then, the Sector Understanding has evolved to provide more flexible terms and conditions for climate adaptation and mitigation projects as well.
In July 2023, as part of the modernisation of the Arrangement package reform, the CCSU was amended to include a wider scope of mitigation sectors, as well as to increase the flexibility of the financing terms and conditions (increased maximum repayment terms of up to 22 years and additional repayment flexibilities). See Evolution of the Arrangement for further information.
Additional information on OECD work on Climate Finance (promoting good practice to scale-up and better target public and private finance to support climate-friendly investment) is provided by the Environment Directorate of the OECD.
The Nuclear Sector Understanding (NSU) (See Annex II of the Arrangement) was first included as an Annex to the Arrangement in 1984. It provides flexible terms and conditions for the provision of officially supported export credits relating to nuclear power plants.
In July 2023, as part of the modernisation of the Arrangement package reform, the NSU was amended to provide more flexible terms and conditions by increasing the maximum repayment terms allowed (up to 22 years instead of 18 years) and adding further repayment flexibilities (frequency, size and pattern or repayment of principal and interest).
Read more on the Evolution of the Arrangement.
The Aircraft Sector Understanding (ASU) is a self-contained agreement for officially supported export credits relating to civil aircraft. It operates with no recourse to any of the provisions of the Arrangement.
The ASU is managed by its own Participants, which are Australia, Brazil, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, United Kingdom and the United States. See Annex III of the Arrangement and Aircraft Specific Rules.
The Participants to the SSU are Australia, the European Union, Japan, Korea, New Zealand, and Norway.
The SSU provides specific disciplines that may be applied to officially supported export credits relating to the export of sea-going vessels, ship conversions and hovercraft vessels. The SSU was initially agreed to in 1969 as a stand-alone agreement; the present version of the SSU is found in Annex IV of the Arrangement.
The SSU is managed by the OECD Shipbuilding Committee (SHIP).
Context
Arrangement Export Credits by provider country
Historic top 15 providers (among Participants) in Billion USD
The scope of official export credit transactions is limited to those transactions with a repayment term of two years or more that were provided in conformity with the Arrangement by Participants (i.e. neither non-Arrangement programmes nor products are included, nor are transactions supported by non-Participants).
Arrangement Export Credits trends
Arrangement Export Credits by destination country
Arrangement Export Credits (a) by income level of the destination countries and (b) by biggest destination countries.
Arrangement Export Credits by sectors
Arrangement Export Credits (a) by broad sectors and (b) by electric power generation sub sectors.