The fundamental premise of an official export credit agency is that it is willing to take greater risk than the private sector market, and for longer exposure periods. We do that---and price accordingly. Exposure fees are market related fees that Eximbank charges for assuming either greater credit risk, or assuming a longer exposure period, or both. Exposure fees are determined first from a country fee level chart which allows an assessment to be made of credit risk up to eight risk levels for eight different types of borrowers for both the public and private sector, and secondly, from the exposure fee level table which uses the eight risk levels to identify a specific fee according to the term of the credit. Hence, an 8x12 matrix covering the eight fee levels and the maximum 12 year term. Fees range from 1/2% of the financed portion to 17% for a twelve year credit in the weakest long-term markets. Most typically, fees are in the 2-7% range. Importantly, fees can be financed. We will revisit this topic with case studies [in seminars with case studies].
Financing Environmental Exports Green Trade Network Summit Santa Cruz, CA September 19, 2008 Craig O’Connor, Director Office of Renewable Energy & Environmental Exports
Ex-Im Bank supported over $2 billion in U.S. environmental exports since establishing the Environmental Exports Program in 1994.
Last 3 years alone Ex-Im Bank has provided Working Capital Guarantees to Powerlight, Uni-Solar, GT Solar, SierraTherm, etc. = Export value of $315 million
Over the past 4 years, Ex-Im Bank has supported the export value of $326 million in water and wastewater treatment exports.
Ex-Im Bank is usually the most cost-effective source of financing for the purchase of U.S technology and services.
Ex-Im Bank often plays a critical early-stage role in helping small clean energy companies finance their operations.
With Ex-Im Bank’s early-stage intervention these companies can grow their international business, increase profitability, and ultimately attract significant equity investment.
Powerlight, GT Solar, Evergreen Solar, and Southwest Windpower are examples of companies that received early-stage financial support from Ex-Im Bank, and who went on to attract substantial equity investment.
Energy Recovery, Inc. (ERI), San Leandro, CA has used Ex-Im Bank's environmental insurance since 2002, and has also used an Ex-Im Bank-guaranteed working capital line of credit.
ERI's patented PX system recovers energy from seawater desalination reverse osmosis systems at up to 97% efficiency.
ERI’s PX® technology has emerged as the industry standard solution for seawater desalination, specified by over 80 OEMs worldwide with over 6,130 PX® devices installed saving customers an estimated 580 MW of energy or $407 million a year in operating costs.
Ex-Im Bank’s Short-Term Insurance enables ERI to offer open account financing to international customers @ 1% cost for 120-day credit.
Ex-Im Bank’s Working Capital Guarantee helps ERI finance the build-out for export orders.
For ERI, exports to Australia, the Middle East, China, Europe and North Africa accounting for nearly 100% of the sales
1. The Guaranteed Lender bank submits the application for Final Commitment under its Master Guarantee Agreement along with the required information to establish the credit limit for the foreign customer.
2. The information requirements from the foreign company for Medium-Term credit limits are as follows:
A current credit report.
A current commercial bank reference.
Latest 3 years financial statements; interim statements if the latest year’s financial statement is older than 1 year.
Note: audited statements required for credits over $1MM
Copy of the export contract.
3. Ex-Im Bank’s Loan Officer analyzes the application and makes a decision on the amount of credit to be supported.