# Presentation: 608512

## Export-Import Bank of the United States 

***Financing Solar Energy Exports***
**	****Craig O’Connor, Director**
**Office of Renewable Energy & **
**Environmental Exports**
**Presentation to DOC Webinar**
**November 17, 2008**
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## U.S. Ex-Im Bank

**Independent agency of the U.S. government established in 1934 to finance the export sales of U.S.-made goods and services**
** ****has supported over $450 billion in exports. **
**Products include Direct Loans, Loan Guarantees, Export Credit Insurance, Working Capital Guarantees, Tied Aid Fund**
***No minimum nor maximum project size.***
**Support for renewable energy and environmental exports mandated in Ex-Im Bank’s Congressional Charter. **
** ****Environmental Exports Program offers enhancements:**
**Repayment terms of 15-years for renewable energy, and  water treatment projects**
**Capitalization of interest during construction**
**Up to 30% local cost support within the U.S. scope of supply**
**Ex-Im Bank supported over $1.27 billion in U.S. renewable energy goods and services exports since establishing the Environmental Exports Program in 1994.  **
**Since 2004 Ex-Im Bank provided Working Capital Guarantees to Powerlight, Uni-Solar, Evergreen Solar, GT Solar, SierraTherm, etc. that financed $350.5 million in exports.**

## Indian Infrastructure Facility

**Ex-Im Bank provides $2.45 billion medium- and long-term cost-effective funding to nine Indian financial institutions:**
**ICICI Bank Ltd.**
**Power Finance Co.**
** ****Infrastructure Development Finance Corporation **
**Industrial Development Bank of India**
**India Infrastructure Finance Company, Ltd.**
**State Bank of India**
**Infrastructure Leasing & Financial Services**
**India Renewable Energy Development Agency (IREDA)**
**Punjab National Bank.**
**These institutions provide their guarantees to expedite processing of Ex-Im Bank-backed medium- and long-term financing for Indian buyers of U.S. exports. **
**Each financial institution has an underlying pre-approved credit line of $50 to $250 million;  Power Finance Co., has a pre-approved line of $800 million **

## Case Study: Sunwize

***Sunwize Technologies Inc.***** is using Ex-Im Bank’s **_**Short-Term Insurance**_** to offer  “open account” credit to customers worldwide.**
***Sunwize *****exports both modules and turnkey solar power systems.**
***Sunwize *****use of Ex-Im Bank Insurance is supporting their growth in exports as financing to overseas dealers enables financing to *****their *****customers, and projects.**
***Wireless Energy Chile***** is using a $300,00 180-day credit line from Sunwize to finance their expanding operations, and to provide  financing to their customers. **
**Financing is often THE critical factor in financing export sales, open account credit has advantages:**
**“****Supplier credit” attractive substitute to buyer using L/Cs**
**Interest rates very high in many international markets**
**Increase order quantities to existing customers/distributors.**

## 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 a small spread over the 6-month U.S. $ LIBOR rate**
**Banks may also arranged fixed interest rates via PEFCO**
**Banks often finance the 15% required cash payment**
**Guarantee available in major foreign currencies**
**Ex-Im Bank charges a 1-time flat Exposure Fee based on the country of the borrower + term of the credit**
**Major benefit for India! High Rating = Low Ex-Im Bank Guarantee Fee****	**** = 0.62% per year for 15-year loan**

## Structured Financing: Korea Solar

**Ex-Im Bank’s Loan Guarantee to *****City National Bank***** supported its 15-year, $7.8MM  financing of the 1MW solar power project in Gwangju, Korea.**
**Ex-Im Bank’s first 15-year deal under the new OECD terms.**
***Powerlight/Sunpower*****l designed, developed, and deployed the solar power plant, located at the Kim Dae Jung Convention Center. **
**Ex-Im Bank used the “structured finance” approach to create a reasonable assurance of repayment and support the project.**
**No outside financial advisors, limited legal fees**
_**Structure of the deal included:**_
**15-year guaranteed tariff rate for power sales**
**Corporate guarantees of two relatively small private-sector companies as project sponsors **
**Mortgage on the solar panels**
**Debt service reserve account**
**Financial covenants**

## Slide 7

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## Working Capital Guarantee

**Ex-Im Bank provides a 90% 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, warranty bonds, and payment guarantees.**
**Enables the exporters to finance foreign sales receivables.**
**Most Working Capital Guarantees provided by Delegated Authority Lenders (see **_**[www.exim.gov](http://www.exim.gov/)**_** for a list) without prior Ex-Im Bank approval.**

## Case Study: United Solar Ovonic 

**In Feb. 2008, Ex-Im Bank guaranteed a $25 million revolving credit working capital line for United Solar Ovonic of  Auburn Hills, Mich.**
**The credit was guaranteed under Ex-Im Bank’s 'Fast Track' Working Capital Guarantee Program that helps small and medium-sized businesses obtain larger working capital loans in less time. **
**Experienced lenders that qualify for the program can provide up to $25 million per borrower in Ex-Im Bank-guaranteed financing. **
**The guaranteed lender is JP Morgan Chase Bank in Cleveland, OH**
**United Solar Ovonic, a wholly owned subsidiary of Energy Conversion Devices Inc., is using the credit line to finance the export of its thin-film solar laminates used in solar rooftop installations to customers in Europe and Asia. **
**"Our ability to access a line of credit of this size based on export-eligible receivables and inventory is tremendously helpful. The reduced amount of time involved enables us to move quickly to expand our export sales," **
**-****	****Sanjeev Kumar, Vice President & CFO, Energy Conversion Devices Inc.**

## Slide 10

## Conclusion

**Ex-Im Bank: top priority to support renewable energy exports**
**Ex-Im Bank supports short, medium, and long-term financing to **_**creditworthy**_** international customers and projects, and working capital guarantees to U.S. exporters.**
**Ex-Im Bank enables U.S. exporters to arrange the *****most attractive source of credit directly for their customers and projects***
**Ex-Im Bank is interested in any size project. **
**We will work with you to create a “bankable” international solar project.**
_***Internet***__***	***_***http://www.exim.gov***
_***e-mail***_***   craig.oconnor@exim.gov***