An El Al plane is seen on the ground in Abu Dhabi, United Arab Emirates, Aug. 31, 2020. Photo: Reuters / Nir Elias / Pool.

The export credit agencies of the United Arab Emirates (UAE) and Israel have signed a cooperation agreement to develop economic relations between the two countries, the UAE’s state news agency WAM said.

Etihad Credit Insurance and the Israel Foreign Trade Risks Insurance Corporation (ASHR’A) plan to support jointly exports, trade, and investment between the two countries, WAM said.

Since the UAE and Israel agreed to normalize relations in August, the two countries have signed a series of accords to boost economic and business ties.

The annual exchange of trade between Israel and the UAE across several industries is expected to reach $4 billion per year, the WAM report said.

“With state guarantees from both countries, this deal will encourage exports and investments, help minimize political and commercial risks, and raise export financing for the mid- and long-terms,” Nissim Ben Eli, chief executive of ASHR’A, was quoted as saying.

Export credit agencies (ECAs) offer loan guarantees, and sometimes direct financing to overseas buyers, to facilitate the export and supply of domestic goods or contractors.

ECA-backed debt financing has become increasingly relevant in the Gulf region over the last few years as a drop in oil prices has prompted governments to seek alternative funding sources.