UK Export Finance, the British government’s export credit agency, has agreed a £100m loan to the government of Benin to enable it to pay Sogea-Satom to improve a 114-mile road between Bohicon and Parakou.
UK Export Finance exists, as its name suggests, to promote British exports. It helps supposedly UK companies to win contracts by providing attractive financing terms to their overseas buyers, to fulfil contracts by supporting working capital loans, and to get paid by insuring against buyer default.
Sogea-Satom is a French company, part of Vinci, active only in Africa. It set up a representative office in London last year, registered at the office of Reed Smith Corporate Services in Broadgate Tower. This appears to be enough to qualify it for UK state backing.
A spokesperson for UK Export Finance said that Sogea-Satom had promised that £35m-worth of goods and services would be sourced "from across the UK supply chain" through the duration of the two-year project. It is not clear, however, how much of this will go beyond the pockets of Sogea-Satom UK, the newly-formed UK-registered company.
UKEF was unable to provide names of any other British companies involved but said that Sogea was "strengthening its relationships with UK suppliers to contribute to its project pipeline in the region".
Graham Stuart MP, minister for exports, said: “This deal will bring significant benefits to UK construction exporters and suppliers at a time when we need keep trade flowing. It shows that UK businesses, with the right support from government, can continue to export anywhere in the world.”
Sogea-Satom president Jean-Michel Guelaud said: “We are excited about this project which help us expand our overseas footprint and will have a profound impact on trade in West Africa. UKEF’s support was fundamental to the securing of this contact and shows the UK government belief in the importance of trade with dynamic, emerging economies.”
Sogea-Satom actually already has a presence in Benin, where it is responsible for managing other large-scale projects, including civil works, construction of buildings, refurbishment and development of roads and construction of marine infrastructure, including the port of Cotonou.
Next month the National Audit Office is due to publish its findings into UKEF’s performance, including the value of UK exports that it supports. However, the report won’t cover specific contracts or transactions, nor will it make any judgements on UKEF's criteria for picking which projects to support.