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Jobs Through Exports EXPORT-IMPORT BANK
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Jobs Through Exports EXPORT-IMPORT BANK


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  • 1. Financing Environmental Exports “ Opening Opportunities in Mexico” AWWA 2006 Conference & Exposition June 11, 2006 Ashok Pasricha Export-Import Bank of USA Engineering & Environment Division
  • 2. Overview
    • Introduction to Ex-Im Bank
    • Industry/Market Analysis
    • Ex-Im Bank’s Environmental Exports Program
    • Ex-Im Products
    • Success Stories
    • Conclusion
  • 3. Ex-Im Bank Introduction
    • Independent agency of the U.S. government.
    • Established in 1934 to finance the export sales of goods and services produced in the U.S.
      • Since 1934 - supported over $450 billion in exports.
    • Supports short, medium, and long-term financing to credit worthy international customers both public- and private-sector; working capital guarantees to U.S. exporters.
    • Products include Direct Loans, Guarantees, Export Credit Insurance, Working Capital Guarantees, Tied Aid Fund
    • No minimum nor maximum project size.
    • Special initiatives for environmental exports, small business, and lending directly to municipalities.
  • 4. US Environmental Industry Trade Balance 2003 (in $billions) Source: Environmental Business International, Inc.
  • 5. Environmental Exports Program
    • Support for environmentally-beneficial exports included in our Charter.
    • Environmental Exports Program Consists of pro-active business development and enhancements to existing Ex-Im Bank programs.
    • Director Conlin formed new Environmental Exports Team
    • Environmental projects are offered enhancements:
      • Maximum OECD repayment term for Long-Term Loans and Guarantees of 10-15 years after project completion.
      • Capitalization of interest during construction.
      • Up to 15% local cost support within the U.S. scope of supply.
      • Repayment terms of 15-years allowed OECD as of July 1, 2005!
      • Use of structured finance approach to support smaller projects
    • RESULTS: Transactions approved under the Program grew from
    • 13 in FY 1994, to 78 FY 2005, totaling over $2 billion.
  • 6. Qualifying Sectors
    • Special Terms approved by the OECD for 2-year trial period include:
      • Projects related to the supply of water for human use and wastewater treatment facilities; collection and treatment of household and industrial wastewater and sewage, including water recycling and treatment of sludge
      • Hydropower
      • Wind energy
      • Geothermal energy
      • Solar photovoltaic power
      • Solar thermal energy
      • Tidal and tidal steam power; wave power; ocean thermal energy
      • Bio-energy: sustainable biomass, landfill gas, sewage plant gas, biogas.
  • 7. Water Supply and Wastewater
    • The Ex-Im Bank recognizes need for clean water & sanitation in emerging markets – where commercial lenders will not assume risk
    • Environmental Exports Program offers enhancements for certain water quality exports
    • The Ex-Im Bank has a strong record on financing exports for potable water supply and wastewater treatment plants
      • Sin ce 2002, assisted in over $350 million of U.S. exports for water projects
  • 8. Ex-Im Bank Financing Products
    • A wide variety of products to meet a diverse range of environmental deals
    • pre-export finance – working capital guarantee program
    • short term financing – insurance
    • medium term financing – insurance & loan guarantees
    • long term financing – loan guarantees
  • 9. Insurance Policies
    • Short-Term (Payments up to 180 days, exceptionally 360 days)
      • Multi-buyer
      • Single-buyer
      • Small Business Multi-Buyer Policies:
        • New-To-Export, Environmental
    • Bank
      • Letter of Credit
      • Financial Institution Buyer Credit
      • Financial Institution Supplier Credit
    • Leasing
      • Operating
      • Financing
    • Medium-Term (1-5 year payments, exceptionally 7 years)
      • Single buyer
  • 10. Export Credit Insurance
    • Enables U.S. exporters to offer short- and medium-term credit directly to their customers.
    • Export credit is an attractive substitute to cash-in-advance, letters of credit and costly local bank financing.
    • Using Ex-Im Bank to insure a letter of credit instead of paying bank confirmation charges usually more cost effective.
      • Example: Insurance costs 0.11% or $110 for a $100,000 sight letter of credit vs. $2,500 minimum bank confirmation charge.
    • Supports repayment terms up to 180 days beginning from date of importation of the goods; capital goods terms of 360 days-7 years.
  • 11. Loan Guarantee Program
    • Guaranteed Loans made by commercial banks (U.S. or foreign) to a foreign buyer with a 100% unconditional repayment guarantee from Ex-Im Bank
      • Guarantee covers 85% of the U.S. content of the transaction.
      • Negotiated interest rates, usually a floating rate based on spread over 6-month U.S. dollar LIBOR rate
      • Loan fully transferable, can be securitized
      • Banks often finance the 15% required cash payment
      • Guarantee available in Euros, other currencies
  • 12. Case Study: Facileasing, S.A.
    • PNC Bank, Pittsburgh, PA arranged a 5-year loan for Facileasing, S.A., Mexico City, to purchase $1 million in U.S.-made equipment.
    • The equipment includes a desalination plant , solar panels , laundry equipment, and golf carts which Facileasing, S.A will lease to the Hotel Marival – Cancun on 5-year lease payment terms.
    • Facileasing, S.A, based in Mexico City, offers both finance and operating leases with payment terms ranging from 12-60 months.
    • Facileasing, S.A.’s customers include both Mexican and U.S. and other multinational companies, in the food, pharmaceutical, and printing sectors.
    • Facileasing, S.A. retains title to the leased assets for the entire term of the lease.
  • 13. Working Capital Guarantee
    • Ex-Im Bank provides 90-100% repayment Guarantee for working capital loans, revolving or transaction based, made by commercial lenders to small businesses to finance export sales.
    • The Working Capital Guarantee serves as the collateral to the commercial lender by mitigating the risk inherent when the source of repayment for the loan is an overseas contract.
    • Enables exporters to finance materials, labor, and overhead to produce goods/services for export.
    • Enables exporters to cover standby letters of credit for bid and performance bonds, or payment guarantees.
    • Enables the exporters to finance foreign sales receivables.
    • Most Working Capital Guarantees provided by Delegated Authority Lenders without prior Ex-Im Bank approval.
  • 14. Short-term EEP Case Study: Environmental Dynamics, Inc (EDI)
    • EDI of Columbia, MI – established in 1975 – had mainly domestic sales and wanted to expand to new foreign markets for its advanced water and wastewater treatment technologies.
    • In 1997, used Ex-Im Bank’s short-term insurance to offer financing to their international customers with repayment terms ranging from 60-360 days.
    • Result : Dramatically increased their sales and now has a distribution network in more than 30 countries. EDI has installed equipment in more than 3,000 industrial and municipal wastewater treatment systems worldwide.
    • EDI plans to hire additional employees and expand marketing further in Asia and Latin America.
  • 15. Case Study: Aruba Desalination
    • Ex-Im Bank’s Comprehensive loan guarantee under the Environmental Enhancement Program enabled Aqua-Chem of Milwaukee to win an $9.3MM contract to win and build a 1000 gpm desalination plant for Aruba’s Water and Electricity Board.
    • Ex-Im Bank supported enhancements to the Loan:
      • repayment term of 7 years (longer terms were offered)
      • capitalized interest during construction (1.5 years); total term equal to 8.5 years
      • supported an additional 15% local cost.
      • Canadian Imperial Bank of Commerce made the loan to WEB, NV at fixed interest rate with Ex-Im Bank’s Guarantee.
    • Ex-Im Bank and CIBC’s Program support, and willingness to meet directly with WB,NV , helped Aqua-Chem win this deal over foreign competition.
  • 16. Conclusion
    • We have the right product to meet your export needs
    • Ex-Im can finance any size deal. No minimum or maximum
    • Focused on increasing environmental exports – using resources throughout the bank
    • New 15 year terms
    • Ex-Im Bank supports short, medium, and long-term financing to creditworthy international customers, and working capital guarantees to U.S. exporters.
    • Ex-Im Bank is focused on increasing its support for environmental exports.
    • New 15-year repayment terms offer a strong enhancement for water technologies exports .
    • Internet http://
    • e-mail : [email_address]
    • e-mail : ashok [email_address]