DEBT ADVISORY

Export Credit Agencies are a specialized finance institutions with a primary objective  of promoting their national Exports.  They do this by providing Direct Loans to foreign Buyers, Guarantees and Insurance to lenders to cover political and commercial risk associated with  Export transactions.

Lower interest and longer Tenors in comparison to what would be available in the domestic.

ECAs have the Capacity, and appetite for challenging risk environments otherwise considered too risky by private Market participants.

ECAs provide a reliable and stable source of finance and in many cases their presence attract other credible Lenders and participants to a transaction.

The only down side of ECAs  could be the  time it takes to approve applications. ECAs operate under very strict OECD(Organization for Economic Cooperation and Development) and own  Country regulations  and for that reason  they are thorough in their activities.  To counter this it helps to plan applications in advance to when the finances would be needed and most importantly to understand all the documentary requirements and procedures and requirements of the different ECAs. This is where our experts will be of immense help to you

The only down side of ECAs  could be the  time it takes to approve applications. ECAs operate under very strict OECD(Organization for Economic Cooperation and Development) and own  Country regulations  and for that reason  they are thorough in their activities.  To counter this it helps to plan applications in advance to when the finances would be needed and most importantly to understand all the documentary requirements and procedures and requirements of the different ECAs. This is where our experts will be of immense help to you.

The projects must meet all international  procurement standards on anti -corruption and bribery

The definition of a foreign buyer can be in three distinct groups. 

a sovereign Buyer- A sovereign is a foreign state, government , ministry or other institution that can validly bind the state. The main characteristic  is that it cannot be liquidated in the event of  a bankruptcy procedure.

A public Buyer -This is usually a company owned or controlled wholly or in majority by the state.  Such companies can be declared bankrupt and liquidated in a Bankruptcy procedure.

A private buyer- These are neither sovereign or public . They are legal entities registered and organized in the country of import. 

Buyer‘s Credit

This is where an ECA provides a direct loan, a Guarantee/Insurance to a foreign Buyer for an export Transaction.

Supplier‘s Credit :

This is an Agreement in a commercial Contract in which an exporter  will supply goods and services to a foreign buyer.

 ECA premiums-  ECAs charge a premium for providing an insurance or guarantee cover. The premiums vary and depends on various factors including the risk category of the Foreign Buyer‘s country , their creditworthiness among others.

15% Down Payment  – According to the OECD Guidelines, ECAs can support only up to a maximum 85% of the contract value. This means at least 15%  must be provided by the Buyer. 

Both Premiums and down payments may be financed usually by commercial Banks .

The eligibility criteria varies from ECA country to Country.  In almost all cases there must be  a  minimum country content before an ECA will participate

The projects must meet all international  procurement standards on anti -corruption and bribery

YES some ECAs have programs for small enterprises that can be as low as half a million USD in contract values supporting small businesses.