When Offshore Group Newcastle (OGN) secured a multi-million-pound contract from Kvaerner for the Shell-operated Nyhamna onshore gas plant project in Norway last year, it was with the help of UK Export Finance (UKEF), the UK’s export credit agency.

UKEF provides a range of specialist insurance and bonds that allows exporters to operate in markets where the commercial sector is unable to provide support.

UKEF’s local export finance adviser, Jonathan Leonard, says: “When signing an export contract with an overseas buyer, it is common for exporters to ask for an advance payment to cover some of the initial costs.

In return, the buyer may ask the exporter’s bank for a performance bond — or guarantee of delivery — in case the exporter fails to meet its contractual obligations.

“The difficulty for exporters is that their bank may want them to set aside cash in case the bank has to honour that bond; in many cases, businesses need that cash as working capital.”

OGN director Richard Glasspool says: “Needing a performance bond to support an overseas contract can be a constraint on a business, but UKEF worked with us and our local bank to find a solution. Using the Bond Support Scheme enabled us to bid for a prestigious international contract while retaining our working capital.”