SACE Signs MENA Surety Bond Agreement With Europe Arab Bank
Italian export credit agency (ECA) SACE has signed an agreement with Europe Arab Bank (EAB) to supply Italian companies in the MENA region with surety bonds. Surety bonds are a type of guarantee, in the form of credit rather than insurance. Under the terms of the agreement, EAB will act as a local fronting bank to issue surety bonds with SACE’s guarantees in the 15 countries where EAB operates (Algeria, Cyprus, Egypt, Jordan, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, UAE and Yemen). SACE can support transactions involving Italian interests, for instance those in which an Italian company works as a subcontractor.
Given the positive trend in the building sector, and the climb in numbers of Italian companies active in public works, residential and industrial building, SACE expects demand for surety bonds issuance services to grow in the region, the ECA told MEES. Due to a reasonably strong oil price, and good level of financial resources, governments in the region are carrying out industrial diversification, urban development and infrastructure projects, noted SACE. SACE’s MENA exposure totals more than €7bn. In 2008 the area absorbed almost 15% of SACE’s new commitments. In Lebanon SACE has recently issued a €3.1mn guarantee for the Italian company Opere Pubbliche for the rehabilitation of the Saoufar-Mdeirej highway between Beirut and Damascus and the Grand Hotel Viaduct damaged during the war in 2006. EAB, with headquarters in London, is a wholly owned subsidiary of Arab Bank which was established in Jerusalem in 1930. It is based in Amman, Jordan.
Copyright MEES 2009.
