Etihad Credit Insurance, the UAE’s federal export credit agency, signed an agreement with state-owned reinsurance services provider Indonesia Re to boost trade and investment between the UAE and the South-East Asian country.
Under the agreement, the two organisations will focus on improving funding access to small and medium enterprises and mid-cap companies, as well as growing halal trade through Sharia-compliant insurance and finance solutions to increase exports.
“The UAE considers Indonesia as a vital strategic partner and this agreement will be a significant force in creating new opportunities, attracting FDI, boosting trade and exports, and accelerating the global economic recovery,” Dr Thani Al Zeyoudi, UAE Minister of State for Foreign Trade and deputy chairman of ECI's board of directors, said in a statement on Thursday.
The new partnership agreement comes as Indonesian President Joko Widodo visits the UAE to strength relations between the two countries.
ECI and Indonesia Re will also collaborate on enhancing business relations between the two countries, provide information on ongoing and potential new projects, explore opportunities for insurance, reinsurance and co-insurance for export and investments and explore recoveries of claims to be collected in Indonesia or in the UAE, among others.
The two entities will also support strategic economic sectors such as steel and aluminium, ceramics, renewable energy, mechanical, and waste management industries as part of the new partnership.
The latest development comes as the two countries focus on strengthening their economic relationship through new deals. In March, the UAE invested $10 billion with the Indonesia Investment Authority to spend on infrastructure and tourism projects in Indonesia.
Earlier this month, DP World also signed a $7.5bn deal with Indonesia's sovereign wealth fund to develop the South-East Asian country's seaports over a period of up to 30 years.
Other business deals signed by UAE companies with Indonesia recently include a preliminary agreement between Abu Dhabi National Oil Company and Indonesia’s Pertamina and Chandra Asri to explore the possibility of developing a crude-to-petrochemicals complex in Indonesia.
Abu Dhabi’s clean energy company Masdar also signed a power-purchase agreement with Indonesia’s state electricity company, Perusahaan Listrik Negara, to develop the country’s first floating solar photovoltaic plant.
Established in 2018, ECI provides export guarantees and trade insurance for UAE companies to minimise payment risks associated with exporting.
It has partnerships with local and international banks that offer loans to UAE companies to fund exports to overseas buyers, with ECI providing insurance.
The ECI issued Dh3.4bn worth of revolving credit guarantees as of September 2021. The volume is three times higher than the guarantees issued last year for the same period, the company said.
The total non-oil trade between the UAE and Indonesia surpassed $11bn in the past five years and touched $2bn last year.