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On the sidelines of Make it in the Emirates Forum 2024

Emirates Development Bank and Etihad Credit Insurance join forces to launch pioneering co-cover scheme to boost UAE priority sectors

• New partnership aims to facilitate comprehensive financing solutions that address the unique needs of critical industries.
• H.E. Ahmed Mohamed Al Naqbi: This scheme will enable more businesses to leverage enhanced financial security and competitive insurance solutions, driving forward the national vision for a diversified, high-tech economy.
• H.E. Raja Al Mazrouei: This partnership seeks to empower both SMEs and large companies to expand in vital sectors, thereby contributing to the growth and diversification of the national economy in alignment with the objectives of "We the UAE 2031"

Abu Dhabi, United Arab Emirates, 28 May 2024: Emirates Development Bank ("EDB" or "the Bank"), the key financial engine of economic development and industrial advancement in the UAE, and Etihad Credit Insurance (ECI), the UAE Federal export credit company, have entered into a strategic partnership to introduce a pioneering Co-Cover Scheme. This scheme is designed to enhance trade credit support and boost liquidity for SMEs and larger enterprises within the UAE’s thriving manufacturing, renewables, food security, advanced technology, and healthcare sectors.

The innovative Co-Cover initiative aligns with EDB’s mission of fostering a healthy, sustainable, and self-reliant economy, as well as its mandate to provide AED 30 billion in financing to support 13,500 companies within those five sectors. Additionally, it synergies with ECI’s expertise, building upon its mandate of supporting local businesses, fostering economic growth, and promoting exports of goods ‘Made in the UAE’. 

The new partnership agreement, signed during the Make it in the Emirates (MIITE) forum, highlights a shared commitment between EDB and ECI to facilitate comprehensive financing solutions that address the unique needs of these critical industries. By combining ECI’s non-payment insurance with EDB’s Credit Guarantee Scheme, this collaboration empowers local banks to provide targeted support for SMEs operating in these key sectors.

The Co-Cover Scheme is poised to deliver a significant boost to the UAE’s economic landscape by ensuring that companies engaged in exports within high-priority sectors have the necessary support to scale operations, innovate, and compete on a global stage. It particularly focuses on enhancing the bankability of projects and reducing financial risk, thereby encouraging more ambitious and large-scale projects within the designated sectors.

Commenting on the announcement, His Excellency Ahmed Mohamed Al Naqbi, Chief Executive Officer of EDB, said: “This collaboration with Etihad Credit Insurance marks a significant step forward in our mission to accelerate the UAE’s advancement across priority sectors. The new Co-Cover Scheme builds upon our existing support programs by providing businesses with more robust financial security and competitive solutions for their exports. This partnership will be instrumental in driving forward the national vision for a diversified, high-tech economy.”

Her Excellency Raja Al Mazrouei, Chief Executive Officer of ECI, emphasised the significance of such strategic partnerships to further the UAE’s economic goals in line with the directives of the wise leadership to solidify the country’s stature as a premier trade and investment hub, both regionally and globally. “We are pleased to collaborate with Emirates Development Bank as it resonates with our commitment to provide tailored financial solutions that spur development, enhance competitiveness, and propel the UAE towards sustainable prosperity. Through this collaboration, we aim to empower SMEs and larger enterprises across vital sectors, driving economic growth and diversifying in alignment with the ‘We the UAE 2031’ vision to achieve a non-oil foreign trade target of AED 4 trillion,” H.E. Al Mazrouei added.

The announcement at MIITE underscores the strategic alignment between EDB’s financing initiatives and the UAE government’s broader economic goals, demonstrating a proactive approach to fostering an environment conducive to industrial innovation and sustainable development. It builds upon EDB's Credit Guarantee Scheme, which plays a crucial role in mitigating the risks associated with lending to SMEs by providing partial credit guarantees to partner commercial banks, and ECI’s non-payment insurance.

This reduces the perceived risk for lenders and encourages them to extend financing to SMEs. The Co-Cover Scheme is designed to enhance the creditworthiness of SMEs by covering a significant percentage of the potential default on loans issued by participating banks. The co-cover can reach up to 80% of the loan amount, thereby sharing the risk between EDB, ECI,  and the partner commercial banks. 

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About Emirates Development Bank:

Emirates Development Bank [EDB] the UAE’s development bank, is a key financial engine for the economic development and industrial advancement of the UAE. EDB provides financial and non-financial support to businesses of all sizes from start-ups, SMEs to corporates driving economic competitiveness across five strategic priority sectors: advanced technology, food security, healthcare, renewables, and manufacturing. EDB was established under Federal Law by Decree No. 07 of 2011 issued by the late Sheikh Khalifa bin Zayed Al Nahyan; and became operational in June 2015.   For more details, visit www.edb.gov.ae   

About Etihad Credit Insurance:

Etihad Credit Insurance, UAE’s federal export credit company, offers businesses, financial institutions and investors innovative solutions that catalyse and consolidate international trade. The company provides a wide range of solutions and products such as export credit insurance, risk mitigation insurance, comprehensive market intelligence, export strategy and access to finance. Established in 2018, ECI has a Fitch Rating of ‘AA-’ and is a member of the widely acclaimed Berne Union and an affiliate member of the UN Environment Programme – Finance Initiative’s NZECA.  ECI is dedicated to fostering sustainability and non-oil trade to support the resilience and diversification of the UAE economy, while empowering businesses to conduct seamless global trade by providing robust credit solutions and expert market insights. Guided by the core organisational values of protection, customer-centricity, integrity, collaboration, global competitiveness, innovation, and sustainability, ECI remains committed to ensuring client success.