Letter from Secretary of State for Business & Trade to UK Export Finance on NAREW air defence programme, 2024
Published 31 October 2024
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From:
Rt Hon Kemi Badenoch MP
Secretary of State for Business and Trade
Department for Business and Trade
Old Admiralty Building
London
SW1A 2BL
To:
Tim Reid
Chief Executive
UK Export Finance
1 Horse Guards Road
London
SW1A 2HQ
24 May 2024
Dear Tim,
UK Export Finance (UKEF) support for Poland - ‘NAREW’
Thank you for your letter dated 23 May 2024. This is to confirm that I am formally directing you as Accounting Officer to proceed with support for a financing in connection with the NAREW air defence programme. I recognise that a contingent liability approaching approximately £9 billion could be involved as a result of this transaction.
I note your concerns that this level of contingent liability is outside of that permitted under UKEF’s Exposure Management Framework (EMF) and is very substantial in the context of UKEF’s overall risk portfolio. Support for the financing of the transaction would not be considered to fall within UKEF’s normal underwriting criteria.
I have, however, considered with ministerial colleagues the arguments in support of proceeding with this level of contingent liability in the national interest. I believe that these arguments are sound – Poland is a close ally of the UK. We share common security interests, and the NAREW programme will help develop our existing strong strategic bilateral relationship.
I, therefore, instruct you to make the appropriate arrangements along the lines discussed for the relevant support mechanisms guarantee to be put in place.
I will of course inform Parliament of this instruction in due course.
Best wishes,
The Rt Hon Kemi Badenoch MP
Secretary of State for Business & Trade and President of the Board of Trade Minister for Women & Equalities