GIEK helps to realise good projects in poor countries by assessing the project’s positive impact on development and ensuring the project does not conflict with Norway’s aid policy.
GIEK’s normal credit-assessment procedure ensures that cases receiving guarantee offers have been assessed as being on a solid foundation with regard to ability to deliver, earnings and debt-service capacity. As regards sales to poor countries, where the state may have less administrative capacity, GIEK will be particularly cautious and ensure that the transaction is justifiable from a development viewpoint.
The OECD has prepared guidelines for use when considering new credit to countries with a limited capacity to raise new loans. The result, in brief, is that GIEK will only provide a guarantee if the project is in accordance with the recipient country’s economic and social strategy. GIEK will also ensure that the project does not conflict with the country's obligations to the IMF and World Bank. Such restrictions apply to around 60 countries and only relate to transactions with public-sector buyers or state-owned companies and transactions where there is a state counter-guarantee.
GIEK complies with the OECD’s sustainable lending principles. These rules include a requirement that export loans to certain countries must contain a gift element (a minimum grant element for external financing). Some countries that are entitled to a gift element can nonetheless raise commercial loans, but only within certain limits. Since Norway does not offer export loans with a gift element, so-called tied aid, GIEK can only offer guarantees if the IMF agreements allow limited commercial loans.
The list of countries covered by the sustainable lending rules can be found here.