UK Export Finance (UKEF) announced two changes on 28 October 2026.
The first raises its Ukraine country risk limit from £3.5 billion to £6.5 billion. That business is written outside UKEF’s normal underwriting criteria, on the direction of a minister.
The second widens the General Export Facility (GEF). Lenders will be able to provide facilities backed by UKEF of up to £15 million per exporter without seeking approval from UKEF for each transaction, up from £10 million.
One change adds wartime exposure under ministerial direction. The other gives commercial lenders more room under published rules.
How the Ukraine Limit Was Set
The £3.5 billion figure itself came from a ministerial direction. On 8 December 2021, Anne-Marie Trevelyan, then Secretary of State for International Trade, directed UKEF to raise its Ukraine market limit to that level. UKEF had warned that a limit of that size sat outside its Exposure Management Framework.
In March 2022, after Russia’s invasion of Ukraine, Trevelyan directed UKEF to remain open for cover in Ukraine and keep the £3.5 billion limit. UKEF had told her the risks no longer met its normal underwriting criteria.
On 19 July 2024, Defence Secretary John Healey and Ukrainian Defence Minister Rustem Umerov signed the Defence Export Support Treaty. It allows Ukraine to draw on £3.5 billion of export finance to buy military equipment from UK companies.
On 23 October 2026, UKEF chief executive Tim Reid wrote that the agency was close to capacity against that limit. The government says UKEF financing has included more than 5,000 air defence missiles from Thales in Belfast and nuclear fuel supplied by Urenco in North West England. It has also covered the reconstruction of six bridges in the Kyiv region using Scottish and Welsh steel, and the supply of former Royal Navy mine countermeasure vessels.
The government says the additional £3 billion will support a growing pipeline of opportunities linked to Ukraine, and projects critical to Ukraine’s defence and resilience.
What Reid Said
Reid, who is also UKEF’s Accounting Officer, set out the financial risks in his letter. He wrote that the risks of supporting Ukraine remain far beyond what UKEF would normally accept, and that the probability of default and expected loss are exceptionally high.
He tested the proposal against Managing Public Money. It did not meet the regularity test, because support to Ukraine falls outside UKEF’s normal underwriting criteria under its HM Treasury Consent. He was unable to conclude whether it represented value for money.
He accepted that the support had wider benefits. He said it had helped Ukraine defend itself, secured strategically important UK exports and supported British businesses and jobs. He wrote that balancing those benefits against the financial risk was a matter for ministers, and asked for a formal written direction.
Jonathan Reynolds, Secretary of State for Business, Innovation, Science and Trade, issued that direction on 25 October. He said he had weighed the financial risks against national security, foreign policy and economic benefits. He directed UKEF to continue its Ukraine support through the National Interest Account and to raise the limit to £6.5 billion.
Reid’s letter states that HM Treasury consent is also required before the direction can be implemented and any additional support provided. Neither published letter records that this consent has been given.
How the Losses Are Recorded
Accounting rules require UKEF to recognise expected future losses when it issues support, not when a borrower defaults. Reid wrote that these losses may outweigh UKEF’s operating income in any given year. He expects UKEF to report a substantial net operating deficit for the 2025 to 2026 financial year, driven by its Ukraine support.
Each new Ukraine guarantee therefore brings an expected loss into UKEF’s accounts when it is issued.
Reid also wrote that there is a strong possibility future debt relief operations will lead to restructuring of debt backed by UKEF, with corresponding losses to the Exchequer.
The £6.5 billion is a limit on cover, not a forecast of losses. Neither letter puts a figure on the eventual cost. UKEF’s annual report and accounts for that year will show the size of the deficit Reid has forecast.
The General Export Facility
The GEF gives lenders partial guarantees so that UK exporters can obtain trade finance. It covers trade loans, bonding and letter of credit lines, on facilities of up to around £25 million with repayment terms of up to five years. When the scheme launched in 2020, UKEF said it could provide an 80% guarantee. Exporters do not need to link the facility to individual export contracts.
Since March 2024, UKEF has given participating lenders delegated authority of up to £10 million per exporter. When an application meets set criteria, UKEF’s guarantee is granted automatically. The 28 October announcement raises that amount to £15 million. Facilities between £10 million and £15 million that meet the criteria will no longer need UKEF’s approval case by case.
Eligibility will also be widened. At present an exporter qualifies if UK export sales made up at least 20% of its turnover in any one of the last three financial years, or at least 5% in each of them.
The lender pays UKEF a guarantee fee, set as a proportion of the interest margin the exporter pays. Sixteen lenders are approved to offer the scheme. UKEF has not yet published the revised eligibility rules or a date for the new £15 million limit.
What Lenders Should Note
The two changes call for different checks.
GEF business rests on the lender’s own credit assessment within UKEF’s published criteria, and the delegated limit is about to rise.
Ukraine business rests on a ministerial direction, on HM Treasury consent that the published record does not yet show, and on a level of risk that UKEF’s Accounting Officer has said falls outside the agency’s normal rules. Until Treasury consent is given, no additional support can be provided under the new limit.
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