Special Financing Options for

Environmental Exports

Special Financing Options for

Environmental Exports

Rob GuthrieRob GuthrieBusiness Initiatives SpecialistBusiness Initiatives Specialist

Office of Renewable Energy Office of Renewable Energy & Environmental Exports& Environmental Exports

Berkeley, CA August 10, 2013Berkeley, CA August 10, 2013

Export-Import Bank of the U.S.Export-Import Bank of the U.S.Export-Import Bank of the U.S.Export-Import Bank of the U.S.

Independent U.S. Government agency, founded in 1934Independent U.S. Government agency, founded in 1934

Self-funded & profitable!Self-funded & profitable! -- $1.1 billion net profit in 2012 -- $1.1 billion net profit in 2012

MISSIONMISSION: : U.S. JOBS THROUGH EXPORTSU.S. JOBS THROUGH EXPORTS

255,000 jobs created in 2012255,000 jobs created in 2012

Provides:Provides: ▪ Working Capital GuaranteesWorking Capital Guarantees▪ Export Credit Insurance Export Credit Insurance ▪ Loan Guarantees Loan Guarantees ▪ Direct LoansDirect Loans

Small Business is Our Business:Small Business is Our Business:

86% of all companies supported are small businesses86% of all companies supported are small businesses

Ex-Im Bank Authorizations Are Growing!Ex-Im Bank Authorizations Are Growing!

Export-Import Bank of the U.S.Export-Import Bank of the U.S.Export-Import Bank of the U.S.Export-Import Bank of the U.S.

Eligibility CriteriaEligibility CriteriaEligibility CriteriaEligibility Criteria

U.S. ContentU.S. Content▪ Short-term transactions: 50.1% minimum

▪ Medium / Long-term transactions: only U.S. content including profit margin, up to 85%.

No Defense ArticlesNo Defense Articles▪ Exceptions may be made for humanitarian

purposes, drug interdiction, & dual-use items.

Country EligibilityCountry Eligibility▪ Support available in over 155 countries

▪ Restrictions may apply for political or economic reasons

▪ Refer to the Country Limitation Schedule (CLS) at www.exim.gov

Environmental Exports ProgramEnvironmental Exports ProgramEnvironmental Exports ProgramEnvironmental Exports Program

▪ Created in 1994Created in 1994

▪ Created the Office of Renewable Energy & Created the Office of Renewable Energy & Environmental Exports in 2008Environmental Exports in 2008

▪ FY 2012:FY 2012:

Financed $355 million of renewable energy Financed $355 million of renewable energy projects.projects.

Supported $1.18 billion in exports of Supported $1.18 billion in exports of environmentally beneficial goods and services.environmentally beneficial goods and services.

Environmental Exports ProgramEnvironmental Exports ProgramEnvironmental Exports ProgramEnvironmental Exports Program

EnhancementsEnhancements::

▪ Terms of up to Terms of up to 18 years18 years for renewable energy for renewable energy and water treatment projectsand water treatment projects

▪ Up to Up to 30% local cost 30% local cost support within the U.S. support within the U.S. scope of supplyscope of supply

▪ Capitalization of interest during constructionCapitalization of interest during construction

▪ Grace periods of up to Grace periods of up to 18 months18 months

Working Capital Loan GuaranteeWorking Capital Loan GuaranteeWorking Capital Loan GuaranteeWorking Capital Loan Guarantee

Ex-Im Bank provides 90% repayment guarantees for Ex-Im Bank provides 90% repayment guarantees for working capital loans.working capital loans.

Revolving OR transaction-based, made by Revolving OR transaction-based, made by commercial lenders to U.S. companies to finance commercial lenders to U.S. companies to finance foreign purchase orders.foreign purchase orders.

Enables exporters to use Enables exporters to use export-boundexport-bound materials, materials, labor, and overhead to collateralize their working labor, and overhead to collateralize their working capital facility.capital facility.

May be used to cover stand-by letters of credit for May be used to cover stand-by letters of credit for bid and performance bonds: 10% collateral.bid and performance bonds: 10% collateral.

Example: WindstreamExample: WindstreamExample: WindstreamExample: Windstream

Windstream, Inc.Windstream, Inc. of New Albany, IN (windstream- of New Albany, IN (windstream-inc.com) manufactures low-cost vertical axis wind inc.com) manufactures low-cost vertical axis wind turbines for rooftop and roadway applications. turbines for rooftop and roadway applications.

In May 2012, Ex-Im Bank guaranteed a $500,000 In May 2012, Ex-Im Bank guaranteed a $500,000 revolving working capital credit line to help fill revolving working capital credit line to help fill Windstream’s foreign purchase orders.Windstream’s foreign purchase orders.

GBC International Bank received the 90% guarantee GBC International Bank received the 90% guarantee under Ex-Im Bank’s ‘Delegated Authority' program.under Ex-Im Bank’s ‘Delegated Authority' program.

KEY: the working capital loan guarantee KEY: the working capital loan guarantee increases increases the advance rates the advance rates that lenders may advance on the that lenders may advance on the primary collateral:primary collateral:

75% on ALL export-bound inventory75% on ALL export-bound inventory

90% on foreign accounts receivable90% on foreign accounts receivable

Example: WindstreamExample: WindstreamExample: WindstreamExample: Windstream

Example: WindstreamExample: WindstreamExample: WindstreamExample: Windstream

Export Credit InsuranceExport Credit InsuranceExport Credit InsuranceExport Credit Insurance

Enables U.S. exporters to offer short- and medium-term Enables U.S. exporters to offer short- and medium-term credit credit directly to their customers.directly to their customers.

Credit insurance is an attractive substitute to cash-in-Credit insurance is an attractive substitute to cash-in-advance, local bank financing, and letters of credit.advance, local bank financing, and letters of credit.

Ex-Im Bank also may Ex-Im Bank also may insure a letter of credit instead of insure a letter of credit instead of paying bank confirmation charges;paying bank confirmation charges; usually more usually more cost-effective.cost-effective.

Example: ForeverPure & Example: ForeverPure & CooleradoCooleradoExample: ForeverPure & Example: ForeverPure & CooleradoCoolerado

ForeverPure of Santa Clara, CA (foreverpure.com) and ForeverPure of Santa Clara, CA (foreverpure.com) and Coolerado, of Denver, CO (coolerado.com) use Ex-Im Coolerado, of Denver, CO (coolerado.com) use Ex-Im Bank’s multi-buyer credit insurance to extendBank’s multi-buyer credit insurance to extend open open account account terms to their foreign buyers.terms to their foreign buyers.

AlternativesAlternatives::

1.1. Cash in advance: may be too expensive.Cash in advance: may be too expensive.

2.2. Foreign letters of credit carry interest rates of 10 – Foreign letters of credit carry interest rates of 10 – 25% per annum; much less affordable.25% per annum; much less affordable.

3.3. Private-sector insurance: available, but typically Private-sector insurance: available, but typically much more expensive; does not cater to small much more expensive; does not cater to small businesses.businesses.

Example: ForeverPure & Example: ForeverPure & CooleradoCooleradoExample: ForeverPure & Example: ForeverPure & CooleradoCoolerado

Credit Insurance Premium Rates:Credit Insurance Premium Rates:

▪ 60 days60 days - 0.55%- 0.55%

▪ 90 days90 days - 0.90%- 0.90%

▪ 180 days180 days - 1.15%- 1.15%

▪ 360 days360 days - 1.77%- 1.77%

Export Credit Insurance: Export Credit Insurance: ForeverPureForeverPureExport Credit Insurance: Export Credit Insurance: ForeverPureForeverPure

Export Credit Insurance: CooleradoExport Credit Insurance: CooleradoExport Credit Insurance: CooleradoExport Credit Insurance: Coolerado

Buyer Loan Guarantee ProgramBuyer Loan Guarantee ProgramBuyer Loan Guarantee ProgramBuyer Loan Guarantee Program

Guaranteed Loans:Guaranteed Loans: made by commercial banks (U.S. made by commercial banks (U.S. or foreign) to a foreign buyer with a 100% or foreign) to a foreign buyer with a 100% unconditional unconditional repayment guarantee from Ex-Im repayment guarantee from Ex-Im Bank.Bank.

▪ Coverage: up to 85% of the U.S. exportCoverage: up to 85% of the U.S. export

▪ NegotiatedNegotiated interest rates, usually a floating rate interest rates, usually a floating rate based on spread over 6-month USD LIBOR rate: based on spread over 6-month USD LIBOR rate: 0.40%0.40%

▪ 15% required cash payment: banks may finance15% required cash payment: banks may finance

▪ Guarantee available in major foreign currenciesGuarantee available in major foreign currencies

Example: SolarWorld USAExample: SolarWorld USAExample: SolarWorld USAExample: SolarWorld USA

SolarWorld USASolarWorld USA manufactures CSi solar PV modules in manufactures CSi solar PV modules in Hillsboro, OR (Hillsboro, OR (solarworld-usa.com)solarworld-usa.com)..

Ex-Im Bank provided a 10-year loan guarantee to PNC Ex-Im Bank provided a 10-year loan guarantee to PNC Bank to finance a 1.4MW rooftop solar project in Bank to finance a 1.4MW rooftop solar project in Barbados.Barbados.

Sustainable Recycling Centre, Inc. (Barbados) will use Sustainable Recycling Centre, Inc. (Barbados) will use the electricity to power SBRC’s operations.the electricity to power SBRC’s operations.

☼ ☼ SBRC is wholly-owned by Williams SBRC is wholly-owned by Williams Industries, Industries, making significant savings in electricity making significant savings in electricity costs.costs.

Example: SolarWorld USAExample: SolarWorld USAExample: SolarWorld USAExample: SolarWorld USA

Direct Loan ProgramDirect Loan ProgramDirect Loan ProgramDirect Loan Program

▪ Direct LoansDirect Loans are made by Ex-Im Bank to a foreign buyer. are made by Ex-Im Bank to a foreign buyer.

▪ Current interest rate for a 10-18 year loan: ≤ 3.5%Current interest rate for a 10-18 year loan: ≤ 3.5%

▪ Coverage: up to 85% of the U.S. exportCoverage: up to 85% of the U.S. export

▪ Ex-Im Bank requires the buyer to make a cash payment Ex-Im Bank requires the buyer to make a cash payment to the exporter equal to at least 15% of the U.S. supply to the exporter equal to at least 15% of the U.S. supply contract.contract.

Example: Areva Solar, Inc.Example: Areva Solar, Inc.Example: Areva Solar, Inc.Example: Areva Solar, Inc.

Areva Solar of Mountain View, CA (areva.com) is Areva Solar of Mountain View, CA (areva.com) is benefiting from an $80 million, 15.5-year fixed rate benefiting from an $80 million, 15.5-year fixed rate Ex-Im Bank Ex-Im Bank direct loan direct loan to finance the purchase of its to finance the purchase of its concentrated solar technology to Reliance Power in concentrated solar technology to Reliance Power in Rajasthan, India.Rajasthan, India.

The project, The project, Rajasthan Sun Technique Energy Private Rajasthan Sun Technique Energy Private Ltd.Ltd. is a subsidiary of Reliance Power, and is being is a subsidiary of Reliance Power, and is being co-financed by the Asian Development Bank and co-financed by the Asian Development Bank and FMO, the Dutch development bank.FMO, the Dutch development bank.

Example: Areva Solar, Inc.Example: Areva Solar, Inc.Example: Areva Solar, Inc.Example: Areva Solar, Inc.

This project uses a concentrated solar power technology This project uses a concentrated solar power technology known as Compact Linear Fresnel Reflector (CLFR)known as Compact Linear Fresnel Reflector (CLFR)

““Our strategic tie-up with Ex-Im is unmatched in terms of Our strategic tie-up with Ex-Im is unmatched in terms of its scope and size. This partnership plays an its scope and size. This partnership plays an important role in meeting India's growing energy important role in meeting India's growing energy needs.”needs.”

- Jayarama P. Chalasani, Chief Executive Officer, - Jayarama P. Chalasani, Chief Executive Officer, Reliance PowerReliance Power

ConclusionConclusionConclusionConclusion

Ex-Im Bank: renewable energy & environmental Ex-Im Bank: renewable energy & environmental exports are exports are TOP PRIORITYTOP PRIORITY..

Ex-Im Bank is interested in projects of Ex-Im Bank is interested in projects of ANY SIZEANY SIZE..

Ex-Im Bank supports short, medium, and long-term Ex-Im Bank supports short, medium, and long-term financing to financing to creditworthycreditworthy international customers, international customers, and U.S. borrowers of working capital.and U.S. borrowers of working capital.

Ex-Im Bank will work with you to create bankable Ex-Im Bank will work with you to create bankable projects.projects.

Contacts:Contacts:Contacts:Contacts:

Rob Guthrie - Irvine, CARob Guthrie - Irvine, CArob.guthrie@exim.gov

Craig O’Connor - Washington, DCCraig O’Connor - Washington, DCcraig.oconnor@exim.gov

WWW.EXIM.GOV