British Airways, a part of the International Airlines Group (IAG), to which Iberia and Aer Lingus belong, has received a £2 billion loan guaranteed by the state-backed credit agency UK Export Finance (UKEF).

The agreement implies that BA will borrow the money from a syndicate of banks, but the Government will be partially liable if the carrier fails to repay. UKEF is the Government’s export credit agency that grants financial support to overseas buyers of British products and services that qualify for such aid.

“British Airways expects to drawdown the facility in January 2021 subject to the agreement of final terms with the lenders and UKEF,” IAG announced on January 31st.

One of the underwritten loan’s essential conditions is that only BA’s activities can be covered by the state’s backing but no other IAG’s members’ endeavors. Another restriction is imposed on paying dividends to IAG while the loan is outstanding.

The support provided to BA will help it bounce back after the pandemic and prepare for the recovery of air travel. Before the recent £2 billion loan announcement, IAG had €8 billion of cash in its reserves and undrawn loan commitments.