The Role and Impact of Export Credit Agencies in Project Finance

2016 ◽  
pp. 81-102
Keyword(s):  
Project Finance ◽  
Export Credit ◽  
Export Credit Agencies

9 Official Funding Sources: Export Credit Agencies and Multilateral Development Banks

2015 ◽  
Author(s):  
Borisoff Alexander ◽  
Compton Andrew
Keyword(s):  
Project Finance ◽  
Export Credit ◽  
Working Capital ◽  
Multilateral Development Banks ◽  
Funding Sources ◽  
Loan Guarantees ◽  
Development Banks ◽  
Export Credits ◽  
Risk Insurance ◽  
Export Credit Agencies

This chapter provides an overview of official funding sources available in the project finance arena, including from export credit agencies, multilateral development banks, and governmental and quasi-governmental entities. The forepart of the chapter describes export credit agencies and multilateral development banks generally, as well as hybrid-type official funding sources. The second part of the chapter explores the types of funding these entities provide, including loans, loan guarantees, political risk insurance, working capital facilities, equity investments, and bond guarantees. The chapter concludes by assessing regulatory regimes applicable to export credit agencies, including the voluntary OECD Consensus or Arrangement on Export Credits that seeks to promote transparency among export credit agencies, and other common issues and considerations to explore when seeking funding by way of such an official funding source.

scholarly journals Financing infrastructure in Asia through bonds and capital markets

2020 ◽  
Vol 4 (1) ◽  
pp. 87
Author(s):  
Shubhomoy Ray ◽  
Jyoti Bisbey
Keyword(s):  
Capital Markets ◽  
Credit Rating ◽  
Market Liquidity ◽  
Project Finance ◽  
Export Credit ◽  
Financial Products ◽  
Asset Class ◽  
The 2008 Financial Crisis ◽  
Export Credit Agencies ◽  
Financing Infrastructure

The project finance scenario has changed significantly around the world after the 2008 financial crisis and following the subsequent Basel III recommendations. Project finance loans from commercial banks and financial institutions have largely dried up, leaving it mostly to the export credit agencies and the bilateral and multilateral development banks to provide the institutional credit. Unfortunately, those sources are not enough, given the huge needs for construction of new infrastructure and renovation of the old ones across Asia, Africa and Latin America. The need for capital markets, through market listed financial products across asset class, unlocking a large part of domestic and corporate savings, has never been felt as strongly before. This article seeks to analyze the development story of various Asian capital markets and examine financial products, which have succeeded in their short history in receiving investor interest. The article also delves into the challenges to market development, policy imperatives and the issues relating to market liquidity and credit rating, which are the most significant influencers for public market float and investor interest.

3 Sources of Funding

2015 ◽  
Author(s):  
Ransome Clive ◽  
Dunnett Geoffrey
Keyword(s):  
Commercial Banks ◽  
Project Finance ◽  
Export Credit ◽  
Market Conditions ◽  
Market Participants ◽  
Contractual Relationships ◽  
Different Types ◽  
The Cost ◽  
Key Participants ◽  
Export Credit Agencies

This chapter provides an overview of the various sources of funding, the cost of funding, access to the debt markets, and the considerations of key participants in current market conditions. As the project finance market evolves, new funders and funding techniques emerge. This chapter explores how contractual relationships between the equity participants and debt providers are structured and how risk is allocated between different types of funders. It discusses the role that sponsors, export credit agencies, multilateral agencies, development finance institutions, and commercial banks play in the project finance market. Finally, the chapter considers the role and use of letters of intent, term sheets, commitment letters, and mandate letters, and analyses the key documentation issues of relevance to the market participants.

scholarly journals Towards Net Zero export credit: current approaches and next steps

2021 ◽  
Author(s):  
Thomas Hale ◽  
Andreas Klasen ◽  
Norman Ebner ◽  
Bianca Krämer ◽  
Anastasia Kantzelis
Keyword(s):  
Business Models ◽  
Global Climate ◽  
Export Credit ◽  
Public And Private ◽  
Climate Targets ◽  
Net Zero ◽  
The Many ◽  
The One ◽  
Investment Portfolios ◽  
Export Credit Agencies

As the world economy rapidly decarbonises to meet global climate goals, the export credit sector must keep pace. Countries representing over two-thirds of global GDP have now set net zero targets, as have hundreds of private financial institutions. Public and private initiatives are now working to develop new standards and methodologies for shifting investment portfolios to decarbonisation pathways based on science. However, export credit agencies (ECAs) are only at the beginning stages of this seismic transformation. On the one hand, the net zero transition creates risks to existing business models and clients for the many ECAs, while on the other, it creates a significant opportunity for ECAs to refocus their support to help countries and trade partners meet their climate targets. ECAs can best take advantage of this transition, and minimise its risks, by setting net zero targets and adopting credible plans to decarbonise their portfolios. Collaboration across the sector can be a powerful tool for advancing this goal.

8 Official Funding Sources: Export Credit Agencies

2019 ◽  
Author(s):  
Borisoff Alexander ◽  
Pendleton Andrew ◽  
Blundell Lewis
Keyword(s):  
Natural Resources ◽  
Financial Institutions ◽  
Government Policy ◽  
Pivotal Role ◽  
Export Credit ◽  
Infrastructure Projects ◽  
Market Participants ◽  
Funding Sources ◽  
Border Trade ◽  
Export Credit Agencies

This chapter focuses on export credit agencies (ECAs). ECAs are government-backed suppliers of financing and other credit support. As enablers of government policy and ‘soft diplomacy’, they possess a variety of tools that are not available to commercial financial institutions alone. Among the most important of these tools is the ability to offer financial terms that are more competitive than those available in the market. ECAs are able to provide financial liquidity in challenging times, making them attractive market participants in all types of credit environments. ECAs are an essential source of capital for the financing of cross-border trade, including for the financing of major infrastructure projects worldwide. In the coming years ECAs will likely continue to play a pivotal role in the financing of global energy, natural resources and infrastructure projects.

3 Sources of Funding

2019 ◽  
Author(s):  
Ransome Clive ◽  
Pridgeon Benjamin
Keyword(s):  
Public Sector ◽  
Capital Markets ◽  
Development Process ◽  
Project Finance ◽  
Export Credit ◽  
Bank Debt ◽  
Development Finance ◽  
Specific Project ◽  
Sources Of Capital

From the very beginning of the development process relating to any specific project, the project’s sponsors will continually assess and analyse the best available sources of capital for the project. The sponsors will seek to obtain funding at the lowest achievable cost; they will seek to minimize as far as practicable the sponsors’ equity contribution and will look to achieve the longest-possible debt tenors. This chapter discusses a variety of sources potentially available to sponsors pursuing a project finance funding plan. These sources include equity, equity bridge loans, subordinated shareholder debt, mezzanine debt, bank debt, Islamic project finance, capital markets, public sector lenders in project financings, export credit finance, multilateral agencies and development finance institutions, and leveraged and finance lease arrangements. The chapter concludes with an overview of the reasons for entering into, and a description of the role of, term sheets, letters of intent, commitment letters, and mandate letters.

Financing alternatives in a changing gas landscape

2014 ◽  
Vol 54 (2) ◽  
pp. 516
Author(s):  
James MacGinley ◽  
Brad Calleja
Keyword(s):  
Oil And Gas ◽  
New Technologies ◽  
Oil And Gas Industry ◽  
Project Finance ◽  
Export Credit ◽  
Gas Industry ◽  
The Past ◽  
New Development ◽  
Credit Agency ◽  
Global Banks

In recent years, Australia has gone through an unprecedented expansion in its oil and gas industry. The demand for capital has been enormous and has resulted in some of the largest project debt financings globally. In the coming years, the funding requirement will change dramatically as projects reach completion; become cash-flow positive; and, owners changing their funding structure from project finance debt to lower cost, lower covenant corporate debt. The development of a number of Australia’s largest oil and gas projects during the past five years coincided with a tightening of capital from the traditional project finance market. This lead to the emergence of export credit agency financing as an integral component of project development. During the past year, however, re-capitalisation of global banks are now re-entering the Australian market and are driving competition and increasing liquidity. This extended abstract covers a review of the funding approaches taken on major Australian LNG projects, including lessons from the funding of CSG projects that may be relevant to other new development markets such as shale gas. It also draws on historical lessons of funding new technologies and provide insight about funding of the next wave of LNG development: floating LNG. The National Australia Bank is one of the largest resources project finance banks globally and is well positioned to provide APPEA’s delegates with relevant insight about the future of debt funding in the oil and gas industry.

scholarly journals How Rising Powers Create Governance Gaps: The Case of Export Credit and the Environment

2019 ◽  
Vol 19 (1) ◽  
pp. 34-52 ◽  
Author(s):  
Kristen Hopewell
Keyword(s):  
Global Governance ◽  
Environmental Governance ◽  
Export Credit ◽  
Due Diligence ◽  
Rising Powers ◽  
Environmental Implications ◽  
Environmental Practices ◽  
Energy Projects ◽  
Emerging Powers ◽  
Export Credit Agencies

This article analyzes how rising powers are affecting an important area of global governance at the intersection of trade and environment: export credit. State-backed export credit agencies (ECAs) play a major role in financing large infrastructure and energy projects, particularly in developing countries. Many of these projects carry significant environmental implications, yet there has been little scholarly attention to their governance. Since the 1990s, global governance of the environmental practices of ECAs has been progressively expanded and strengthened via the OECD Arrangement on export credit and Common Approaches for environmental and social due diligence. Recently, however, there has been a dramatic increase in export credit provision by rising powers, such as India and China, who are not members of the OECD nor subject to the Arrangement or Common Approaches. In this article, I argue that existing governance mechanisms have not caught up with the rapidly changing landscape of export credit. Drawing on the case of India’s financing for the Rampal coal-fired power plant in Bangladesh, I show that the problem of environmental governance for export credit increasingly extends beyond the advanced-industrialized states of the OECD. The failure to cover the large and growing volume of export credit provided by the emerging powers represents a major gap in the established system of environmental governance for export credit.

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