1	Medium and Long-term Financing for EEP Deals “Clean Technology Exports Conference: Finding New Buyers and Financing Your Exports” November 2006
2	Medium & Long-term Financing for EEP Deals Medium and long-term defined Structured versus Project Finance Ex-Im Bank’s point of view for supporting the Korean solar power project
3	Medium & Long-term Financing for EEP Deals Medium-term Transaction amount < $10 MM, with repayment term from 1 to 7 years (up to 15 years for EEP Deals) MT credit standards at: www.exim.gov/tools/credit_stds.html Long-term/structured/project Transaction amount > $10 MM, with repayment term over 7 years Treating deals of <$10MM but over 7 years as MT rather than LT is expected to make the EEP efficient and flexible… Handled by Credit Underwriting division Structured Finance may handle transaction if structuring is required Credit Committee has approval authority
4	Structured & Project Finance: What is the Difference? Structured (Typical) Existing company borrower financing an expansion Full recourse to borrower Analyze historical & projected cash flows Limited “perfection of security” Can finance 85% of project costs (subject to U.S. content rules). Project Finance SPV borrower financing a greenfield project or expansion Limited recourse to parent companies Analyze project’s future cash flows Complex documentation to perfect security More than 15% equity required, so total debt provided less than 85%
5	Korean Solar Power Project – Case Study Project: Goods and services related to the construction of a 1 MW solar power project in South Korea The key elements of the transaction: U.S. exporter: PowerLight Corporation, California Guaranteed lender: City National Bank, California Borrower: S&P Corporation – a private sector Korean company established to own and operate the Project Guarantors: 2 relatively small private sector Korean companies Ex-Im guaranteed loan amount: approx. $7.8 million Repayment Period: 15 years under EEP Source of Loan Repayment: revenue stream from local electricity retailer, corporate guarantees and security and collateral
6	Korean Project – Strengths/Challenges Key Strengths: Guaranteed tariff rate for 15 years after Project begins commercial operation. Free use of land in exchange for the Project being turned over to the local government entity after 15 years. Experienced U.S. Exporter using solar technology that is proven and has been utilized much in the U.S. and abroad. Korean and local government support for renewable energy deals. Key Challenges: No power purchase agreement (PPA) for projects over 200 kW in size. Priority of purchasing power from renewable energy projects over power produced from other natural resources not “technically” guaranteed. The guarantors are relatively small considering the size of the loan. Borrower’s revenues are in KRW and loan repayment is in USD.
7	Korean Project – Case Study Highly Structured to Address Challenges Ex-Im got comfortable with structure based on complete package that included several components from Project Finance, such as analyzing future cash flows, DSRA, lien on equipment, assignment of contracts, etc.
8	Korean Solar Power Project - Result Repayment Period of 15 years necessary to make transaction economically viable. Project is 80% constructed and generating electricity First ECA supported transaction under Environmental Exports Program with 15 year repayment period to close Much work for a small transaction size -- it is a good example for other projects
9	Inquiries For Small Business - Contact Ex-Im’s Western Regional Office: Jim Lucchesi Paul Watts For EEP – Contact: Craig O’Connor