The Export-Import Bank of the United States was founded to sustain and maintain American jobs by supporting the export of U.S. goods and services to foreign buyers. The EXIM Bank is dedicated to creating trade finance programs that help both American exporters and emerging countries that otherwise would not be able to purchase U.S. products. Therefore, Special Initiatives have been formulated to assist industries that have high growth rates, great potential and are highly competitive in the Global Marketplace.
Oil and Gas
EXIM Bank views the Oil & Gas sector as a key industry due to its overall size and importance to the U.S. economy and high employment rates (supporting 9.2 million jobs in the U.S., according to the American Petroleum Institute). Presently, more than 10,000 U.S. companies, ranging from small businesses to global-scale enterprises, provide the goods and services that support petroleum exploration, drilling, refining and other operations, both domestically and internationally. Although U.S. companies have maintained their traditional technological leadership in the industry, they face increasing competitive challenges from manufacturers and service providers in Western Europe, Canada, Asia and South America.
For many years, the Petroleum Sector (including oil & gas exploration and field development, pipelines and distribution, refineries & petrochemical operations) has represented a major element of EXIM Bank's portfolio and annual financing commitments. From fiscal 2001 to the present, EXIM Bank has provided commitments totaling $14.8 billion dollars for 78 transactions/projects in the Petroleum Sector, including 49 transactions in Latin American, 14 in Africa, six in Russia/FSU, five in the Middle East and four in Asia.
In fiscal year 2010, EXIM Bank provided approximately $3 billion in financing for the Papua New Guinea Liquid Natural Gas Project. That multifaceted project included a natural gas liquefaction facility, gas and liquid pipelines and gas field developments in Papua New Guinea. The project will enable gas to be transported to an energy starved Asia while contributing substantially to the economy of Papua New Guinea.
Since the Petroleum Industry is expected to maintain high levels of capital development expenditures for the foreseeable future, annually exceeding $200 billion worldwide, and with increasing globalization of the industry, EXIM Bank's role in supporting jobs associated with the U.S. exporters in this sector can be expected to grow even further. EXIM Bank will help U.S. companies involved in the petroleum sector maintain an edge in the international marketplace, enabling them to effectively compete against foreign counterparts who receive support from other export credit agencies.
The U.S. is the major supplier of large mining and processing equipment to the world mining industry, be it coal, copper, gold or uranium. The U.S. is expected to continue to play a major role in this sector, including both surface and underground mining. Domestically produced equipment is based on innovation and incorporates high technology in its design and manufacturing process, which enables U.S. exporters of mining equipment to remain highly competitive in the international marketplace, along with the continued support of the EXIM Bank.
Soon after EXIM Bank was chartered in 1934, it became a force in the mining and minerals processing sector, beginning with projects in Latin America. Since then, its financing has supported projects from Canada to Argentina, and from Russia to Africa and Australia. During fiscal year 2010, EXIM Bank has financed $900 million in U.S. exports the following mining projects:
- $18 million for the Sangatta Surface Coal Mine in Indonesia
- $420 million for the Boleo Underground Copper-Cobalt Mine in Mexico
- $375 million for Barrick's Pueblo Viejo Surface Gold Mine in the Dominican Republic,
- $20 million for Ferroexpo's Surface Iron Ore Mine in Ukraine,
- $62 million financing for Iron Ore Company of Canada's Surface Mine
In addition, EXIM Bank has supported numerous smaller export sales for gravel, limestone and sand operations worldwide. As is the case for all industrial sectors, EXIM Bank thoroughly evaluates all applications for the financing of mining projects to determine the project's potential environmental and social impacts, and it only supports those that are shown to be in compliance with the Bank's environmental guidelines.
EXIM Bank currently has several applications of various types of mines across the globe. The Bank's activities over the decades underscore its commitment to maintaining the competitiveness of U.S. exporters in the mining sector, thereby helping to create and sustain jobs with the suppliers and sub-suppliers of mining exports across the country.
EXIM Bank is active in its support of a broad range of agricultural products. The Bank is able to support the sale of agricultural commodities and consumables, such as grain and soil additives, through the Short-Term insurance program, while assistance is available for the export of livestock through one of EXIM Bank's Short or Medium-Term Products. Medium-Term financing has been used extensively by U.S manufacturers and suppliers of new and used agricultural equipment. The range of equipment benefitting from EXIM Bank's support has ranged from small items such as disc harrows to more complex machinery such as seeders and combines.
Beyond the sale of equipment and commodities, EXIM Bank is also able to assist U.S exporters and suppliers with the financing for agricultural projects. Examples of projects supported include the export of greenhouses to individual growers to the development of large scale integrated meat processing facilities and everything in between.
Regardless of the size and scope of an exporter's involvement in foreign agricultural activities, EXIM Bank has a financing program that will meet their needs.
According to Clean Edge, Inc., a leading market analyst, the global clean tech sector is expected to grow approximately 130% over the next decade, from a $144 billion industry to $343 billion. Additionally, a study by the Pew Charitable Trust found that jobs in this sector are growing at a rate faster than other sectors, increasing 9.1% compared with 3.7% between 1998 and 2007.
EXIM Bank is dedicated to helping U.S. exporters grab a share of that market. In fact, EXIM Bank has a Congressional mandate to support renewable energy and has been directed that 10% of its authorizations should be dedicated to renewable energy and environmentally beneficial transactions. Consequently, EXIM Bank has had a focus on the environment since 1994 with its Environmental Exports Program (EEP), and has steadily grown its portfolio of transactions. In 2007, the Office of Renewable Energy & Environmental Exports was created. Further in 2010, the Division was expanded to include dedicated credit officers to process renewable energy and environmental transaction. As of June 30, 2010, Environmentally Beneficial authorizations reached approximately $323 million.
The EEP as well as EXIM Bank's Carbon Policy offer a number of incentives that encourage the use of EXIM Bank products, including tenors up to 18 years, 30% local costs support, capitalized interest during construction, interest rate lock on direct loans and the ability to pay the exposure fee as a margin over an interest rate. Additionally, a streamlined approach to small solar (Solar Express) deals has resulted in a number of applications.
As a key agency involved in the President's National Export Initiative (NEI), which aims at doubling exports over the next five years, EXIM Bank and the Office of Renewable Energy & Environmental Exports is committed to meeting the needs of U.S. exporters in this important sector.
Medical Equipment & Services
Medical Technologies is a sector with great potential for future growth with a high level of quality and innovation second to none.
The Medical Technologies Initiative ensures that more buyers qualify for EXIM Bank support by providing a more flexible set of standards for those companies and countries that otherwise would not qualify for financing under the standard guidelines. Therefore, transactions of this nature are considered for extended terms, have greater flexibility in capital formation, can create start-ups with experienced management, have capitalization of interest on loans and Cost Cover for local costs. It is a priority for good business and international citizenship to support the creation of American jobs and of facilities that deliver humanitarian benefits.
Construction Equipment and Services
EXIM Bank's experience in the Construction and Civil Works sectors has included a broad range of products and applications. Whether selling a specific piece of mobile equipment to a private contractor or embarking on the implementation of a large civil works project, including equipment sales along with engineering and construction management services, EXIM Bank has an appropriate financing product to fit the need.
The Medium-Term insurance and guarantee programs support the sale of both new and used/refurbished construction equipment. In addition, to help U.S companies build relationships with foreign project developers early in the development phase, the Engineering Multiplier Program provides Medium-Term financing of pre-project feasibility studies and technical studies. The balance of that loan can be rolled into any subsequent long term financing of the project's construction phase.
Beyond the direct support of construction equipment, EXIM Bank provides Long-Term financing of large civil works projects. In addition to earth moving equipment and engineering services, these projects typically involve a variety of goods and services related to the specific project's purpose. Large civil works projects benefitting from EXIM Bank support have included water and wastewater treatment plants, railroad and airport construction, construction of tunnels, highways and bridges, large hydroelectric plants and irrigation networks, large towers, hospitals and residential housing developments, coastal protection and reclamation and many others. The majority of the transactions are financed via one of EXIM Bank's Long-Term products and often make use of one or more of EXIM Bank's sector specific incentive programs, such as the Environmental Exports Program or the Medical Equipment Program.
EXIM Bank has been, and will continue to be, an important source of aircraft finance for the U.S. aircraft manufacturing industry, a key industry which directly or indirectly employs U.S. workers in all 50 states and in which the United States continues to have a competitive advantage.
EXIM Bank supports the export of small/business aircraft and helicopters. During the past few years, EXIM Bank has supported financings of small/business aircraft and helicopters, including business aircraft for both charter operations and personal use and helicopters for use by (i) military/police end-users for (a) search and rescue, or (b) drug interdiction, or (ii) commercial end-users providing private transportation, charter services to offshore oil and gas operations, and emergency medical transport services.
During FY 2009, EXIM Bank provided financing of approximately $8.6 billion to support the export of 150 large commercial aircraft, a greater than 50% increase relative to the prior year. The increased demand by foreign airlines and aircraft operating lessors for U.S.-manufactured large commercial aircraft and a withdrawal/contraction in the commercial financial market, especially between September 2008 and June 2009, contributed to this record increase in EXIM Bank supported financing of large commercial aircraft.
EXIM Bank anticipates that demand for its financing in support of this key industry of the U.S. economy (and the high-paying jobs it provides) will remain strong.
Power Generation and Related Services
The global power sector has been an active and important sector for US companies and is considered a key industry by the Export Import Bank of the US, since exports from this sector create a large number of US jobs. From year 2000 to 2009, EXIM Bank has authorized over $5 billion in medium and long term transactions for the export of goods and services in the power sector. Not only has EXIM Bank helped create numerous jobs in the US, but by providing vital financial support, it has also played a vital role in the development and growth of the power sector in numerous developing countries. US companies have participated in the development of safe, reliable and environmentally friendly power plants by providing State of the Art Technology, coupled with valuable engineering and project management services in the design, construction, commissioning and operation of power plants.
EXIM Bank has funded projects in the generation, transmission and distribution of power. In Year 2009, EXIM Bank had an overall financial exposure of about $4.5 billion in the power sector. In FY2009, EXIM Bank financed over $1.3 billion in US exports in the power sector to numerous countries including Saudi Arabia, Bahrain, and Turkey.
In conventional power generation, US Companies have provided valuable exports in:
- Gas Powered Gas Plants
In the electric power sector, natural gas is an attractive choice for new generating plants because of the low initial cost, flexible power output, relative fuel efficiency and low carbon dioxide intensity. The gas fired power plant sector has been a very active sector for EXIM Bank. (Photograph of the Gas Fired Ilijan Power Plant Philippines)
- Coal Fired Power Plants
EXIM Bank has supported numerous coal fired power plants in the past. Since conventional coal fired power plants have a higher carbon dioxide intensity compared to other types of power plants, EXIM Bank reviews the quantity of carbon dioxide emitted from new coal fired power plant in accordance with the EXIM Bank's Environmental Procedures and Guidelines. (See Coal Fired Paiton Power Plant, Indonesia)
The nuclear sector is on the verge of a tremendous growth. Over 30 countries, which do not have nuclear power at this time are seriously considering new nuclear power generation. According to the World Nuclear Association currently 53 new nuclear reactors for a total of almost 50,000 MW are planned and an additional 136 new nuclear reactors for a total of close to 150,000 MW are being proposed around the world. The US has World Class companies offering State of the Art, safe and reliable technology to nuclear power plants. EXIM Bank has provided financial support to a large number of nuclear power plants over the years, and EXIM Bank provides special extended financial terms of up to 18 years to support nuclear power plants.
At present, EXIM Bank has numerous several applications in house in the power sector. EXIM Bank expects to continue to be an active player in supporting the power sector and to continue to help in the creation and sustenance of US jobs in the power sector.