Catalysts for development: How export credit and PRI support sustainable development

In the upcoming United Nations FFD4 Conference, the Berne Union is hosting a side event on ‘enhancing de-risking mechanisms for sustainable development’, in partnership with UN Trade and Development (UNCTAD) and the International Chamber of Commerce (ICC), to discuss how export credit guarantees and political risk insurance (PRI) can be further leveraged to channel flows of long-term capital into developing economies and achieve sustainable economic development.

Perhaps overlooked as a form of development finance, export credit and PRI are already driving real impact in mobilising private capital, de-risking investments, and enabling both trade and infrastructure development in some of the world’s most challenging economies, with USD 140m of financing in developing economies in 2024 alone. Here’s how.

With the latest estimate of the annual SDG financing gap at USD 4tn – up from USD 2.5tn in 2015[1] – the role of Berne Union members (ECAs, private insurers, and MDBs) in facilitating development finance is more critical than ever. Through credit insurance, guarantees, and PRI, these institutions not only facilitate trade, finance infrastructure and energy projects, but also attract private capital into high-risk but high-need environments.

Export credit as a sustainable development enabler

Credit insurance and guarantees—both export-linked and untied—mitigate non-payment and political risks, enabling financiers to offer long-term financing for projects in developing countries that otherwise would not be feasible. These instruments support blended finance structures and improve access to affordable funding, especially in developing economies, making it possible for commercial banks to lend for renewable energy, health infrastructure, or public transport projects with reduced risk exposure. Under these instruments, Berne Union members currently hold USD 507bn in exposure in developing economies, a figure that has grown steadily since 2010 (USD 323bn). Within LDCs, this figure has surged from USD 15.9bn in 2010 to nearly USD 98bn in 2024, demonstrating an increasing willingness to support the poorest countries.

Medium- and long-term (MLT) export credit forms the core of this support, typically extended to foreign buyers purchasing goods or services. Today, over 60% of MLT exposure – equivalent to USD 430bn – is held in developing countries, a proportion that has remained steady since 2005. During this period, overall MLT exposure has grown at a compound annual rate of 4.7%, indicating sustained demand and increasing capacity. Notably, annual new MLT commitments to developing economies have surpassed those to developed countries by an average of 46% each year. LDCs have seen especially remarkable growth, with exposure climbing from USD 5.3bn in 2005 to USD 97.8bn in 2024, with Berne Union members now operating in 39 of the 45 LDCs, underscoring their willingness to take on challenging markets.

Figure 1: Total Credit Commitments Outstanding by Level of Development, 2010-2024 [USD bn]

Figure 2: Total New Credit Commitments by Level of Development, 2010-2024 [USD bn]

Support for public infrastructure and clean energy projects

Infrastructure accounts for the largest share of MLT exposure in developing countries, currently totalling USD 90.6bn—a 32% increase since 2019. This growth mainly reflects rising demand for public infrastructure projects, particularly in Sub-Saharan Africa, which holds the highest regional share at approximately 22%. Since 2019, Berne Union members have issued USD 74.4bn in new commitments for infrastructure in developing economies, facilitating long-term investments in roads, ports, energy production, and health services. These figures represent more than financial flows – they enable real, transformative projects that are directing countries towards sustainable growth. For instance, UKEF supported the delivery of critical infrastructure, including projects that will support sanitation, roads, and storm drainage, to the coastal region of Angola vulnerable to flooding; Bpifrance has supported the construction of electricity transmission and distribution infrastructure in Senegal; and EIFO and KUKE provided financing for health and social infrastructure in Côte d’Ivoire.

Another major area of impact is renewable energy. Since 2019, exposure in renewables in developing countries has expanded by 51%, reaching USD 48.8bn. This growth is accelerating, with USD 18.8bn in new commitments made during 2023–24 alone – over half of the six-year total of USD 31bn. Projects supported by Berne Union members span from solar electrification in Angola to wind power in Türkiye and Taiwan, and climate-linked power purchase agreements in Chile. LDCs now account for USD 19.5bn of this renewable energy exposure, second only to infrastructure for this group of countries, reflecting a strong focus on providing clean energy sources to the poorest of countries.

The private sector expands its reach

Although public ECAs still provide the bulk of support, the private insurance market is expanding rapidly and becoming a more pivotal player in mobilising capital flows. Private insurers now hold USD 54.6bn in exposure[2] in developing countries – representing 54% of their global portfolio and a 73% increase since 2014, with growth coming from new market entrants and existing providers expanding their deployed capacity. In LDCs, their presence has grown even faster, with exposure rising 176% to USD 8.6bn, particularly in countries such as Angola, Senegal, and Bangladesh, with new commitments to LDCs reaching a total of USD 10.1bn in the last five years. Their contribution to renewable energy is especially noteworthy: MLT commitments in this sector have grown at a compound annual rate of 39% since 2019, reaching USD 391m annually.

Their growing role is further illustrated by initiatives like the IFC’s Managed Co-Lending Portfolio Program (MCPP) Real Sector Program. This USD 3bn credit insurance facility – backed by 14 global insurers, many of them Berne Union members – will channel private insurance capacity into development sectors such as energy, transport, health, education, and agribusiness. It exemplifies how development banks are working with private insurers to build scalable, impact-driven solutions – an approach likely central to discussions at FFD4.

PRI, meanwhile, is another powerful – though underutilised – tool for channelling investment into risky markets. PRI protects investors from currency inconvertibility, expropriation, political violence, and government contract breaches, mitigating political risk that might otherwise be a barrier for investment. According to a recent UNCTAD survey[3] of PRI providers, a lack of awareness and high perceived costs are key barriers to wider use, restricting the potential of this product as a means of mobilising capital into developing economies.

Despite this, PRI providers have covered USD 200bn of investment in developing countries between 2020 and 2024, including USD 31.7bn in LDCs. Roughly 70% of new PRI issuance is consistently directed toward developing countries (excluding LDCs), with LDCs receiving around 10% annually. Encouragingly, this share rose to 16% in 2023. Like export credit, PRI is most present in infrastructure and renewables – around 90% of cover in both sectors is for projects in developing countries.

Risk sharing and collaboration

Looking ahead, the role of export credit and insurance in sustainable development is only set to grow. The recent OECD Arrangement modernisation reflects the industry’s adaptability and alignment with global development goals. The revised rules include extending maximum repayment terms to 22 years for climate and social sector projects (such as health, education, and water) and up to 15 years for most conventional projects. These longer tenors will ease debt burdens and make vital infrastructure more affordable for developing countries, and additional flexibility in premium structures for green and social projects enhances the viability of these transactions further.

In short, export credit should not be a peripheral component of development finance—it has been and will continue to be a core facilitator. With evolving policies, strong provider appetite, and deeper collaboration, ECAs and private insurers are well positioned to be key enablers of sustainable development in the decade ahead. Intentionally integrating these export credit and PRI instruments more deeply into the development finance architecture and fostering partnerships with DFIs, climate funds, and private investors can multiply their collective impact. This goal will be central to discussions at the upcoming FFD4 side event.