Board member Dan Renberg says subsovereign guarantee program includes coverage for environmentally-friendly exports
FOR IMMEDIATE RELEASE October 19, 2000
Nancy Publicover (202) 565-3205 or firstname.lastname@example.org
Washington — U.S. exporters of environmentally-beneficial goods and services now have access to subsovereign financing for their foreign buyers. The Export-Import Bank of the United States (Ex-Im Bank) will accept the credit of qualified cities, states, and other subsovereign entities in emerging markets for purchases of U.S. goods, including environmental products. The subsovereign guarantee program compliments Ex-Im Bank's environmental exports program, which features enhanced export credit insurance, loans, and loan guarantees for qualifying exports.
This program can help emerging markets address critical state and municipal environmental needs, by improving their ability to purchase clean air, water, and energy technology, said Dan Renberg, member of the board of directors Ex-Im Bank, speaking today at the Forbes Environmental Superconference in Washington, D.C.
Renberg said the financing features of Ex-Im Bank's environmental program help U.S. exporters gain a competitive advantage over their foreign counterparts. While the U.S. market for environmental technologies is estimated to grow 1.8 percent over the next few years, Latin American and Asian markets are projected to grow at annual rates of 12 percent and 10 percent respectively, he noted. Clearly for U.S. companies, the future is in international markets and Ex-Im Bank can help.
Ex-Im Bank's subsovereign guarantee program, which is not limited to environmental goods and services, is open to qualifying entities whose foreign currency debts are not in default and are rated B/B2 or stronger by an accepted global credit ratings agency. Currently localities in Argentina, Brazil, Bulgaria, China, Colombia, Croatia, the Czech Republic, Estonia, Latvia, Poland, and South Korea qualify for the subsovereign guarantee program. The list of eligible entities will change as credit ratings change. Ex-Im Bank is exploring ways to expand the program in the near future to reach more subsovereign governments in a greater number of countries.
Ex-Im Bank's environmental program provides enhanced financing for U.S. environmental exports, including:
- Export credit insurance featuring open account credit on terms of up to 180 days, 95% commercial coverage and 100% political coverage;
- Maximum allowable repayment terms under international guidelines, capitalization of interest during construction of a project, and local cost coverage;
- Most favorable terms permitted under the Organization for Economic Cooperation and Development (OECD) guidelines and Ex-Im Bank's Environmental Export Program.
Renberg cited examples of U.S. companies who have successfully used Ex-Im Bank for their environmental exports:
- Zond Systems, Tehachapi, CA, used Ex-im Bank's medium-term insurance to offer competitive financing on the sale of a wind turbine to a Mexican cement manufacturer. The wind turbine lowered the customer's demand for electricity and allowed a costly and polluting diesel generator to be retired.
- Golden Genesis Company of Scottsdale, AZ, is using Ex-im Bank's short-term insurance to arrange an open account credit line for the purchase of solar home lighting systems for Kenitel Ltd., of Nairobi, Kenya, one of East Africa's leading solar technology companies.
- Paul C. Rizzo of Monroeville, PA, benefitted from an Ex-Im Bank long-term loan guarantee to export $1.5 million of design and engineering services for the creation of solid waste landfills in 50 Mexican cities. The company added five additional jobs as a direct result of the contract.
- Aqua-Chem of Milwaukee, WI, won an $8 million contract to build a desalination plant for Aruba's Water and Electricity Board with the backing of an Ex-Im Bank long-term loan guarantee.
Ex-Im Bank is an independent federal agency that provides export credit insurance, loans and loan guarantees to finance exports of U.S. goods and services, mainly to developing markets. In fiscal year 2000, Ex-Im Bank helped to support more than $15.5 billion of U.S. exports worldwide.