On Friday, the Minister of Economic Affairs and Communications, Juhan Parts sent the draft for the State Export Guarantee Act for interministerial approval, pursuant to which a state company dealing with credit insurance for state export guarantee for enterprises will be established.

Pursuant to the draft, the state will establish a company, where KredEx will obtain a holding and will provide a service on the basis of a management agreement. The establishment of the company enables to provide entrepreneurs more mid- and long-term export guarantees than ever, their necessity became evident from an analysis carried out within the co-operation between KredEx and Ministry of Economic Affairs and Communications. Furthermore, in connection with global economy issues, the interest in short-term export guarantees has strongly grown. So far, too small capital volume of the KredEx Export Guarantee Target Fund and rigid equity capital requirements in providing guarantees have hindered the grant of export guarantees which does not meet the requirements of the established market. Currently the volume of the KredEx Export Guarantee Target Fund is 100 million EEK, enabling to issue the guarantees for a maximum of 800 million EEK. However, the potential demand-based guarantee volume with the annual issuing possibility is over 1 billion EEK. Proceeding from the analysis, the state would receive notable potential benefit from mid- and long-term export guarantees – each export of 100 million EEK, established by virtue of the guarantee scheme, will create over 20 million added value directly EEK. According to prognoses, annual volumes of guaranteed export could reach EEK 1.1—1.5 billion. Hence, the direct added value to be obtained from the guarantee scheme would be approx. 1 billion EEK in total (within 2009-2013).

The company to be established will have a separate management board and supervisory board. According to the plan, the equity capital of the company will consist of 200 million EEK budgetary investment, 100 million EEK will come from the KredEx holding, and 200 million EEK as supplementary loss reserve from the funds of EU Regional Development Fund. Direct state holding in the company will be 66.5% and the holding of the KredEx Foundation will be 33.5%. Financial data of the company will be consolidated or entered in the KredEx report in the form of equity method.

On April 28, 2008, the Cabinet of Ministers assigned the task of the Minister of Economics and Communications to develop the proposals for the amendment of State Export Guarantee Act.

The Draft and explanatory memorandum can be accessed via e-law at http://eoigus.just.ee/?act=10&subact=1&ESILEHT_W=243605