Heckmann: Global supply chains are becoming increasingly complex

International supply chains are becoming increasingly complex, while competition among exporting countries has intensified significantly, Gerlind Heckmann, Deputy Director-General at Germany's Federal Ministry for Economic Affairs and Energy, said at the German-Azerbaijani Connectivity Conference on infrastructure, transport, logistics, green energy and digitalization along the Middle Corridor in Baku, Report informs.

According to her, international supply chains have become increasingly complex and integrated. "At the same time, competition among exporting countries has intensified significantly. Therefore, the modernization package is primarily designed to ensure that German export financing remains competitive and is an appropriate instrument for both exporters and borrowers. The first measure is what is called 'flex and cover'. Traditionally, eligibility for support from the German Export Credit Agency (ECA) was closely linked to the German content of an individual export contract."

She noted that this approach does not always reflect how companies operating globally work today. "With 'flex and cover', we simply take a broader view and assess the company's overall economic footprint in Germany. This includes factors such as employment, investment and value creation. This gives German exporters significantly greater flexibility in organizing international supply chains while maintaining access to ECA support. At the same time, local buyers also benefit."

Heckmann added that the second measure is known as "shopping line cover". "This instrument allows buyers and financing banks to establish a financing framework that can subsequently be used for purchases from multiple German suppliers. This makes the supply chain more flexible and efficient for borrowers, particularly for larger investment programs that require technology, equipment and services from several German companies rather than a single exporter. I think this is also attractive for Azerbaijan. Today, many borrowers have access to various sources of financing. In this regard, the challenge is long-term financing. This is precisely where ECA-supported financing can create significant value," she said.