The Covid-19 pandemic made its impact felt on the global economy for most of 2020. Great uncertainty and lower levels of activity as a result of strict infection-control measures globally led to a hugely challenging year for Norwegian export companies.
The Norwegian business sector continued to experience great uncertainty in Q4, although by the end of the year the oil price had risen to the same level as before the outbreak of Covid-19. Meanwhile, Norwegian export companies demonstrated an impressive ability and desire to face the challenges head on, through an increased rate of change and a shift towards new industries.
Refocus on new sectors
“The pandemic meant that 2020 was a challenging year for Norwegian export companies. Nevertheless, we have seen a high level of activity throughout the year, including in Q4,” says Otto Søberg, CEO of Export Credit Norway.
In Q4 Export Credit Norway received 106 loan applications with a total value of NOK 34 billion. Although applications during the quarter were similar in number to the same period in the previous year, the value of the applications was 22% lower. Export Credit Norway paid out NOK 529 million in new loans in Q4 2020, compared with NOK 5.2 billion in Q4 2019. The high disbursement value in Q4 2019 was the result of delivery of cruise ships from Norwegian shipyards and delivery of equipment to the oil and gas sectors.
“2020 was the year when many Norwegian companies were forced to take a new approach. Norwegian export companies have demonstrated an impressive ability and desire to transition and refocus their production on new sectors. For Export Credit Norway it has been important to be available to our customers during this demanding year. It is especially important, during such difficult times as we have been through, that Export Credit Norway has the resources to support export companies and, to some extent, function as a countercyclical balance,” says Otto Søberg.
Significant activity within renewable energy
In Q4 2020, Export Credit Norway received 13 applications linked to the domestic ship financing scheme. There was also significant activity within offshore wind and zero- and low-emission ferries. Export Credit Norway also witnessed Norwegian export companies that operate within energy and industry increasingly turning to other sectors, such as wind power, solar energy and hydropower.
“It is reasonable to assume that this trend will gain momentum in 2021, both because of the continuing effects of the pandemic, and because of the focus on the green transition leading to increased electrification and demand within renewable energy,” says Otto Søberg.
In 2020, a total of NOK 5.6 billion was paid out in new loans. At the end of the year, the probability-adjusted order book was NOK 14.5 billion, which is an increase compared with the same period in 2019.
Export Finance Norway from July 1
On 1 July Export Credit Norway and GIEK will merge to form a new government agency. The new agency, which will be called Export Finance Norway (Eksfin), will be a driving force for Norwegian exports that deliver value creation.
“The merger process has not and will not affect our customers. During 2020 we prioritised assisting our customers with good service, frequent advice and a stable, favourable financing offer. This will continue in 2021. It is vital for Norwegian export companies that they receive excellent support during trying periods like this,” says Otto Søberg.
Published 15. Mar 2021