ECA Cover: Supporting African Imports from Germany

Transcription

1 ECA Cover: Supporting African Imports from Germany Export Credit Guarantees of the Federal Republic of Germany Susann Matuschek Martin Schmerbach ECA Consortium Euler Hermes/PwC All rights reserved. Copyright 2012 Euler Hermes Deutschland AG and PricewaterhouseCoopers AG Wirtschaftsprüfungsgesellschaft. Frankfurt, 06 February 2013

2 Welcome & agenda I. Hermes Cover - How we do our business II. Focusing on Africa III. Premium system IV. Why Hermes Cover? page 2

3 Mandatory business The Export Credit Guarantee Scheme in Germany is handled by in an unincorporated consortium The scheme is operated on behalf and for the account of the Federal Republic of Germany Statutory max. exposure 135 bn. euro page 3

4 Cover for non-payment risks Political Risks General political risks (war or other armed conflicts, revolution or civil commotion, nationalization, expropriation or other sovereign acts that are equivalent to an expropriation in their effects) Convertibility and transfer risk (impossibility of converting or transferring amounts deposited in foreign currency) Loss of the right to receive payment due to frustration of contract for political reasons The loss of goods before the risk has passed to the foreign buyer due to political circumstances Commercial Risks Irrecoverability of claims (insolvency, settlements, compulsory execution, etc.) Protracted default (failure to pay within a certain period of time after the due date) page 4

5 Product Portfolio for exporters Single export transaction» Supplier Credit Cover» Leasing Cover Supplementary Cover» Manufacturing Risk Cover» Contract Bond Cover» Counter-Guarantee Several export transactions one buyer/one country» Revolving Supplier Credit Cover Several export transactions several buyers, different countries Specific Business» Wholeturnover Policy» Constructional Works Cover» Aircraft, Ships and Project Financing page 5

6 Product portfolio for banks Financing single transactions» Buyer Credit Cover» Leasing Cover Supplementary Cover» Securitisation Guarantee» Counter-Guarantee (as beneficiary) Financing regular transactions with one buyer» Framework Credit Cover Euler Hermes is running a pure cover business! page 6

7 Qualification for cover Eligible projects Cover criteria Export project No marketable foreign risk Mainly German products Eligibility for promotion Justifiability of risk Terms of contract Budgetary restrictions No minimum contract value! Conditions for cover page 7

8 Supplier credit cover Insures trade receivables under a single German export transaction with short or medium / long payment terms Exporter Export contract Export receivables Foreign buyer Hermes cover page 8

9 Supplier and buyer credit cover Safeguards trade receivables under a single export transaction with short or medium / long payment terms Exporter Export contract/delivery Foreign buyer Disbursement Financing bank Hermes cover Loan contract/repayment Loan contract/ repayment Foreign bank page 9

10 Our risk assessment criteria Federal cover policy Collaterals Payment terms Political & commercial criteria Credit rating of the foreign buyer Project Contract structure page 10

11 Our decision-making procedure Exporter / Bank files an application for an export credit guarantee Mandataries: preparation of the application assessment / queries presentation of a report to the Interministerial Committee for Export Guarantees (IMC) Decision: Interministerial Committee (IMC) Rhythm: large projects: 4-week-conference-rhythm medium: weekly small: daily page 11

12 Timeline: Application Cover Application (prior to commencement of risk) Issuing fee External information request Invoice on premium Issuance of cover Review (Mandataries) Intermediate notice (if applicable) Credit assessment Decision (Interministerial Committee) page Seite 12

13 Agenda I. Hermes Cover - How we do our business II. Focusing on Africa III. Premium system IV. Why Hermes Cover? page 13

14 Development: Hermes Cover Sub-Sahara New export credit guarantees for the Sub-Sahara region In Mio. EUR Positive trend, volatile on account of large-scale projects Cover Volume 2012: EUR 1,1bn page 14

15 Africa: Hermes cover share of German exports Africa 8,2% 10,1% Northern Africa 7,5% 11,8% Sub-Sahara 9,1% 8,8% Developing & emerging markets Total German exports 2,8% 3,4% 8,5% 7,7% page 15

16 Projects currently covered (single transaction cover) Mauritania processing plant for iron ores as well as expansion of the port in Nouadhibou Kenya bottling systems for beverages Ghana ambulances, trucks and construction vehicles Nigeria construction vehicles, trucks and passenger planes Gabon modernization of infrastructure: drinking water supply, roads, gas-fired and hydropower plants South Africa power plants, chemical facilities, bottling systems for beverages Tanzania bottling systems for beverages, glass-kiln Mauritius passenger planes page 16

17 Sustainable Lending in Africa (OECD) Public Buyer Transactions on credit terms (>360d): OECD-ECAs have to adhere to obligations limiting a country s commercial borrowing under IMF / World Bank programme Grant element obligatory: Dependent on debt analysis: No conditions: [per ] page 17

18 Examples for current wholeturnover cover Synthetic materials for manufacturing of consumer products Drugs and medical equipment Bulk freight of various kinds Plant protection and fertilizers Construction materials page 18

19 Promoting African-German Trade More cover possibilities owing to cooperation with: Cooperation with Euler Hermes in many forms: Parallel Insurance, Joint Insurance, Reinsurance Acceptance of guarantees and as borrower Inclusion of foreign contents page 19

20 Agenda I. Hermes Cover - How we do our business II. Focusing on Africa III. Premium system IV. Why Hermes Cover? page 20

21 Premium System: Fundamentals Premiums & processing fees are to be paid for cover: Processing fees are dependent on the order value Assessment of the estimated risk plays a major role in the calculation Premiums are dependent on: Country category Insured order value up-front premium [not per annum] not negotiable Payment Terms Buyer category: buyer s / guarantor s status page 21

22 OECD Country Risk Categories Country risk Country risk categories to assess the political risk: 1-7 Determining elements: macroeconomic situation of a country payment experience of OECD ECAs Country Risk Categories: 1 - not assigned Classification on OECD level Consensus among all participating ECAs necessary to change a country risk classification Regular update of the data (once a year) 7 - page 22

23 Premium rates: Examples for standard transactions Export to South Africa: Country risk category: 3 Buyer risk category: Risk period: CC0 (= solvent buyer) 3 years Premium rate: 1,38 % Export to Nigeria: Country risk category: 5 Buyer risk category: Risk period: CC3 (= medium corporate risk) 5 years Premium rate: 6,24 % page 23

24 Agenda I. Hermes Cover - How we do our business II. Focusing on Africa III. Premium system IV. Why Hermes Cover? page 24

25 Why Hermes Cover? German ECA s offer is reliable: Long-term funding can be offered in the framework of the OECD- Consensus Realization of critical projects German ECA s offer is flexible: Export transactions are subjected to an individual assessment based on sound underwriting principles Know-How & experience with good payment records Low claims ratio One source for German country information (German embassies, gtai [German Trade and Invest], KfW/ DEG) Attractive cover conditions even for high risk countries More cover possibilities due to cooperation with African Afreximbank and ATI Support with market entry Strong backing of the Federal Republic of Germany German ECA s offer is continuous: Risk appetite remains high as the motivation is to maintain trade relations page 25

26 page 26

27 Contact Susann Matuschek Euler Hermes Deutschland AG Telefon:+49 (0)40 / susann.matuschek@exportkreditgarantien.de Martin Schmerbach Euler Hermes Deutschland AG Telefon:+49 (0)40 / martin.schmerbach@exportkreditgarantien.de Further information is provided under: Hotline: +49 (0) 40 / info@exportkreditgarantien.de page 27