# Presentation: 526211

## Financing Environmental Exports

***	******	***

**“****Opening Opportunities in Mexico”**
***AWWA 2006 Conference & Exposition***
***June 11, 2006***

**Ashok Pasricha **
***Export-Import Bank of USA ***
***Engineering & Environment Division***

## Overview

**Introduction to Ex-Im Bank**
**Industry/Market Analysis**
**Ex-Im Bank’s Environmental Exports Program**
**Ex-Im Products**
**Success Stories**
**Conclusion**

## Ex-Im Bank Introduction

- Independent agency of the U.S. government.
- Established in 1934 to finance the export sales of goods and        services produced in the U.S.
***Since 1934 -  supported over $450 billion in exports. ***
- Supports short, medium, and long-term financing to _**credit worthy**_ international customers both public- and private-sector; working capital guarantees to U.S. exporters.
- Products include Direct Loans, Guarantees, Export Credit Insurance, Working Capital Guarantees, Tied Aid Fund
- No minimum nor maximum project size.
- Special initiatives for environmental exports, small business, and lending directly to municipalities.

## US Environmental Industry Trade Balance 2003(in $billions) Source: Environmental Business International, Inc.

## Environmental Exports Program

*	**Support for environmentally-beneficial exports included in our Charter. *
*	**Environmental Exports Program Consists of *_*pro-active*_* business development and enhancements to existing Ex-Im Bank programs.*
*	**	**Director Conlin formed new  Environmental Exports Team*
*	**Environmental projects are offered enhancements:*
**Maximum OECD repayment term  for Long-Term Loans and Guarantees of 10-15 years after project completion.**
**Capitalization of interest during construction.**
**Up to 15% local cost support within the U.S. scope of supply. **
_**Repayment terms of 15-years allowed OECD as of July 1, 2005!**_
**Use of structured finance approach to support smaller projects**
*	**RESULTS: Transactions approved under the Program grew from *
*       **13 in FY 1994, to 78 FY 2005, totaling over $2 billion.*
*	*

## Qualifying Sectors

_*Special Terms approved by the OECD for 2-year trial period include:*_
*	*
***WATER SUPPLY & TREATMENT:***
**Projects related to the supply of water for human use and wastewater treatment facilities; collection and treatment of household and industrial wastewater and sewage, including water recycling and treatment of sludge**
**Hydropower**
**Wind energy**
**Geothermal energy**
**Solar photovoltaic power**
**Solar thermal energy**
**Tidal and tidal steam power; wave power; ocean thermal energy**
**Bio-energy: sustainable biomass, landfill gas, sewage plant gas, biogas. **

## Water Supply and Wastewater

*The Ex-Im Bank recognizes need for clean water & sanitation in emerging markets – where commercial lenders will not assume risk*
*Environmental Exports Program offers enhancements for certain water quality exports*
*The Ex-Im Bank has a strong record on financing exports for potable water supply and wastewater treatment plants*
**Sin****ce 2002, assisted in over $350 million of U.S. exports for water projects**

## Ex-Im Bank Financing Products

***A wide variety of products to meet a diverse range of environmental deals***
***	******pre-export finance – working capital guarantee program***
***	******short term financing – insurance***
***	******medium term financing – insurance & loan guarantees***
***	******long term financing – loan guarantees***

## Insurance Policies

***Short-Term (Payments up to 180 days, exceptionally 360 days)***
- Multi-buyer
- Single-buyer
- Small Business Multi-Buyer Policies:
- New-To-Export, Environmental
***Bank***
- Letter of Credit
- Financial Institution Buyer Credit
- Financial Institution Supplier Credit
***Leasing***
- Operating
- Financing
***Medium-Term (1-5 year payments,  exceptionally 7 years)***
- Single buyer

## Export Credit Insurance

***Enables U.S. exporters to offer short- and medium-term *****credit directly to their customers. **
***Export credit is an attractive substitute to cash-in-advance, letters of credit and costly local bank financing.***
***Using Ex-Im Bank to *****insure a letter of credit instead of paying bank confirmation charges***** usually more cost effective.***
*Example: Insurance costs 0.11% or $110 for a $100,000 sight letter of credit vs. $2,500 minimum bank confirmation charge.*
***Supports repayment terms up to 180 days beginning from date of importation of the goods; capital goods terms of 360 days-7 years. ***

## Loan Guarantee Program

_*Guaranteed Loans*_* made by commercial banks (U.S. or foreign) to a foreign buyer with a 100% unconditional repayment guarantee from Ex-Im Bank *
**Guarantee covers 85% of the U.S. content of the transaction.**
**Negotiated interest rates, usually a floating rate based on spread over 6-month U.S. dollar LIBOR rate**
**Loan fully transferable, can be securitized**
**Banks often finance the 15% required cash payment**
**Guarantee available in Euros, other currencies**

## Case Study: Facileasing, S.A.

***PNC Bank, Pittsburgh, PA arranged a 5-year loan for *****Facileasing, S.A., *****Mexico City, to purchase $1 million in U.S.-made equipment.***** **
***The equipment includes a ***_***desalination plant***_***, *****solar panels*****, laundry equipment, and golf carts which *****Facileasing, S.A *****will lease to the  Hotel Marival – Cancun on 5-year lease payment terms.***
**Facileasing, S.A, *****based in Mexico City, ***** *****offers both finance and operating leases with payment terms ranging from 12-60 months.***
**Facileasing, S.A.’s *****customers include both Mexican and U.S. and other multinational companies, in the food, pharmaceutical, and printing sectors.***
**Facileasing, S.A. *****retains title to the leased assets for the entire term of the lease.***

## Working Capital Guarantee

*	**Ex-Im Bank provides 90-100% repayment Guarantee for working capital loans, revolving or transaction based, made by commercial lenders to small businesses to finance export sales.*
*	**The Working Capital Guarantee serves as the collateral to the commercial lender by mitigating the risk inherent when the source of repayment for the loan is an overseas contract.*
*	**Enables exporters to finance materials, labor, and overhead to produce goods/services for export.*
*	**Enables exporters to cover standby letters of credit for bid and performance bonds, or payment guarantees.*
*	**Enables the exporters to finance foreign sales receivables.*
*	**Most Working Capital Guarantees provided by Delegated Authority Lenders without prior Ex-Im Bank approval.*

## Short-term EEP Case Study:Environmental Dynamics, Inc (EDI)

*EDI**** of Columbia, MI – established in 1975 – had mainly domestic sales and wanted to expand to new foreign markets for its advanced water and wastewater treatment technologies.***
***In 1997, used Ex-Im Bank’s short-term insurance to offer financing to their international customers with repayment terms ranging from 60-360 days.***
_***Result***_***:  Dramatically increased their sales and now has a distribution network in more than 30 countries.  EDI has installed equipment in more than 3,000 industrial and municipal wastewater treatment systems worldwide.***
***EDI plans to hire additional employees and expand marketing further in Asia and Latin America.***

## Case Study: Aruba Desalination

***Ex-Im Bank’s  Comprehensive loan guarantee under the Environmental Enhancement Program enabled Aqua-Chem of Milwaukee to win an $9.3MM contract to win and build a 1000 gpm desalination plant for Aruba’s Water and Electricity Board. ***
***Ex-Im Bank supported enhancements to the Loan:***
- repayment term of 7 years (longer terms were offered)
- capitalized interest during construction (1.5 years); total term equal to 8.5 years
- supported an additional 15% local cost.
*Canadian Imperial Bank of Commerce *made the loan to WEB, NV at fixed interest rate with Ex-Im Bank’s Guarantee.
***Ex-Im Bank and CIBC’s Program support, and willingness to meet directly with WB,NV , helped Aqua-Chem win this deal over foreign competition. ***

## Conclusion

*We have the right product to meet your export needs*
*	**Ex-Im can finance any size deal.  No minimum or maximum*
*Focused on increasing environmental exports – using resources throughout the bank*
*New 15 year terms**	*
*Ex-Im Bank supports short, medium, and long-term financing to creditworthy international customers, and working capital guarantees to U.S. exporters.*
*Ex-Im Bank is focused on increasing its support for environmental exports.*
*New 15-year repayment terms offer a strong enhancement for *_*water technologies exports*_*.*
*         **BRING US A DEAL!**	*
*Internet**	*_*[http://](http://www.exim.gov/)*__*[www.exim.gov](http://www.exim.gov/)*_
*	**e-mail :     *_*[craig.oconnor@exim.gov](mailto:craig.oconnor@exim.gov)*_
*	**	**          **e-mail :     **ashok*_*[.pasricha@exim.gov](mailto:.pasricha@exim.gov)*_* **	**	*