The 2023 OECD Arrangement modernisation

The 2023 OECD Arrangement modernisation extended maximum repayment tenors to 15 years for standard transactions and 22 years for climate-aligned projects, broadening eligible green categories and eliminating prior project finance constraints. On 31 March 2023, the eleven participants to the OECD Arrangement reached agreement in principle. The implementing text was published on 17 July 2023 following formal adoption by participants: the United States, Australia, Canada, the European Union, Japan, South Korea, New Zealand, Norway, Switzerland, Turkey, and the United Kingdom.

How the OECD Arrangement modernisation extended repayment tenors

Maximum repayment periods increased materially across the participant network. For projects eligible under the Climate Change Sector Understanding (CCSU), maximum tenor rose from 18 to 22 years. For transactions outside CCSU, maximum tenor extended to 15 years, compared with the previous 8.5 to 10-year range. These extensions apply uniformly across buyer credit and supplier credit structures, eliminating the prior distinction between product types.

Minimum premium rates for credit risk were adjusted for longer repayment terms, moderating the cost of extended tenors. This pricing adjustment reflects the risk profile of extended transactions and improves competitiveness for borrowers evaluating multiple financing options. The combined effect of longer tenors and adjusted premium rates addresses a structural disadvantage faced by OECD-supported export finance when competing against non-OECD alternatives.

The tenor extension proves particularly consequential for infrastructure and energy projects with slower revenue generation or demand-linked cash patterns. Borrowers can now structure repayment schedules that match underlying project economics rather than conforming to pre-defined OECD tenor ceilings. This flexibility was previously unavailable under the old 8.5 to 10-year framework, which compressed amortisation periods and constrained financeable projects.

Broadened green project eligibility under the Climate Change Sector Understanding

The modernisation substantially expanded CCSU project categories, moving beyond narrow definitions of renewable energy generation. The revised agreement now includes:

• Environmentally sustainable energy production
• CO2 capture, storage, and transportation
• Energy transmission, distribution, and storage systems
• Clean hydrogen and ammonia production and infrastructure
• Low-emissions manufacturing processes
• Zero and low-emissions transport systems
• Clean energy minerals and related infrastructure

This expansion addresses material gaps in the previous framework, where supporting infrastructure for renewable energy often fell outside green classifications. The prior regime treated primary generation assets (wind, solar) as eligible but excluded the transmission, storage, and enabling infrastructure that makes renewable energy operationally viable. Hydrogen infrastructure now qualifies as a green sector, recognising hydrogen's role in decarbonisation across manufacturing, transport, and heating. Critical mineral projects supporting the energy transition and transmission networks connecting renewable generation to demand centres now qualify for 22-year tenor treatment alongside primary generation assets.

The practical effect of this broadening is substantial. Developers of renewable energy projects can now finance the full ecosystem in a single OECD-supported structure, rather than separating primary generation (eligible) from transmission or storage (previously ineligible). This integrated financing approach reduces complexity and improves project economics by aligning debt maturity with the revenue-generating lifecycle of the entire asset portfolio.

Project finance simplification and rule consolidation

The modernisation removed Annex VI, eliminating special rules that previously governed limited recourse project finance transactions. General financial structuring provisions now apply uniformly across all transaction types. This change represents a fundamental simplification of the OECD framework, aligning project finance treatment with standard export credit principles rather than carving out project-specific constraints.

Under the prior Annex VI regime, project finance transactions faced detailed eligibility criteria and shortened repayment constraints that created material disadvantages compared to supply or buyer credit structures. These restrictions were particularly restrictive for high-income OECD country transactions, creating structural barriers to project-financed solutions in developed markets. The removal of these carve-outs extends the 15-year tenor ceiling uniformly to project finance structures, matching the treatment available for conventional export financing.

The removal also eliminated approval processes previously required to demonstrate project finance qualification. Origination teams no longer need to establish compliance with bespoke project finance technical rules or seek special category approval. Deal teams now evaluate project finance structures against standard underwriting frameworks, improving deal velocity at the origination stage.

Flexible amortisation structures and cashflow alignment

The modernised arrangement accommodates sculpted repayment profiles aligning with underlying project cashflows. Previous framework requirements for equal six-monthly instalments no longer apply. For renewable energy projects with seasonal generation patterns or infrastructure concessions with demand-linked revenue, flexible scheduling improves affordability and reduces refinancing pressure during lower-revenue periods.

Implementation and effective date

The agreement in principle reached on 31 March 2023 required each participant government to complete internal decision-making processes before taking effect. Publication of the revised text on 17 July 2023 reflected completion of that process, and the modernised terms took effect for new business in July 2023.

Market implications and competitive positioning

The modernisation shifts competitive dynamics in export finance. Extended tenors, expanded green categories, and adjusted premium rates improve the relative attractiveness of OECD-supported financing against non-OECD alternatives. This repositioning directly addresses competitive pressures from non-OECD export credit agencies offering more flexible terms on infrastructure and energy projects.

Borrowers requiring large infrastructure projects with extended revenue ramps gain material benefits from 22-year tenor availability, substantially widening the set of financeable projects. Where a 10-year OECD tenor previously made a project uneconomic due to compressed debt service requirements, the new 15 to 22-year framework enables repayment profiles matching actual project cashflows. This expansion is particularly significant for:

• Renewable energy projects requiring payback periods aligned with technology depreciation schedules and power purchase agreement terms
• Infrastructure concessions with ramp-up revenue patterns
• Critical mineral extraction and processing facilities with capital-intensive upfront costs
• Port, transport, and connectivity projects with long-term demand build profiles

For origination teams, the removal of Annex VI constraints eliminates a prior source of deal friction. Project finance qualification no longer requires separate technical approval or compliance with dedicated Annex VI rules. Credit review integrates project finance into standard underwriting frameworks, accelerating deal progression and reducing administrative overhead. Traditional export-financed sectors retain competitiveness through the maintained 15-year tenor baseline across non-CCSU financing, ensuring that conventional supply and buyer credit structures remain viable alternatives to project finance solutions.