9th Arab-German Energy Forum Panel 5 Energizing Funding Export Credit Financing with a German Export Credit Guarantee Ingo Schwutke Euler Hermes Aktiengesellschaft Cairo, 25 th October 2018
1 The role of Export Credit Agencies
Export promotion in the world Export Credit Agencies (ECAs) and ExIm Banks are globally the first choice when it comes to official promotion of exports Countries with a national ECA or ExIm Bank Countries who are members of multilateral ECAs or ExIm Banks Countries without a national ECA or ExIm Bank Page 3
Why are ECAs needed Exporters are confronted with various risks that can be mitigated and managed with the help of an ECA - ECAs help strengthen exports to difficult markets Export transactions involve higher risks than domestic transactions these types of risk are partially not marketable and thus lead to a market failure this is where statesupported credit insurances step in and provide cover. Commercial risks Political risks Non-payment due to commercial reasons (e.g. insolvency) Protracted default General political risks (e.g. war, revolution, expropriation) Convertibility and transfer risk Loss of goods or payment rights due to political circumstances ECAs are governmental institutions and play a major role in the international export finance community They intend to only offer support which is not available on the private market Page 4
How we cooperate internationally to promote a level-playing field and opportunities for exporters OECD-Consensus: Sector Understandings Coordination among EU member states Premia OECD-Recommendations: Common approaches Information exchange Bribery x Workshops BU operational guidelines International debt restructuring International Working Group ECA cooperation Bilateral exchange Reinsurance (IWG) 5
2 Who we are Snapshot of the German ECA
Export Credit Guarantees in Germany Plus other Ministries Contract between government and Euler Hermes Cover Fees & Premium Indemnification German companies and financial institutions Application, Management, etc.
The German ECA in figures Active on behalf of the Federal Government since 1949, combining the expertise of 400 employees. Current portfolio (2017) EUR 86 bn is fully underwritten by the Federal Republic of Germany with AAA Rating. Overall volume of cover 2017 EUR 16,9 bn (2016 EUR 20,6 bn). Egypt: 2017: EUR 280 million 2016: EUR 3.251 million Doing business with 1.600 exporters and banks. Serial winner of Best ECA awards, both globally and regionally. 8
Internationally Recognised Trade Finance Magazine + + + Trade Finance Review + + + Global Trade Review + + + Trade & Export Finance Trade Finance Magazine + + + Trade Finance Review + + + Global Trade Review + + + Trade & Export Finance Deals of the Year in MENA region (past 10 years) 2008 BNP Paribas, Jordania 2009 SabaFon Islamic ECA financing telephone project, Yemen 2010 Société Générale S.A., Wind farm, Azerbaidshan 2010 2010 Citi / HSBC / Calyon, Dubai Electricity and Water Authority (DEWA), Dubai, VAE Calyon S.A. / Emirates Aluminium Company Ltd. PJSC, Abu Dhabi, VAE 2010 Calyon Credit Agricole CIB, London, SATORP Jubail, Saudi Arabia 2012 2013 SMS Meer GmbH / Société Générale S.A., Gulf United Steel Holding Company, Bahrain / Yamato Kogyo, Japan KfW- IPEX Bank GmbH, Petrochemical Complex, Sadara Chemical Company LLC, Al Jubail, Saudi Arabia 2014 ABB AG / Commerzbank AG, KAR Power Iraq, Iraq 2015 Republic of Egypt, Ministry of Defense Kairo, Egypt 2016 Orpic Plastics/ Natixis, Liwa Plastics Industries Complex, Oman 9
Partner of German Suppliers International Trade Transportation/Logistics Engineering Social Development Capital/Heavy Equipment Renewables German suppliers offer a diverse range of goods and services we support (almost) all industries, sectors and/or structures. 10
Point of Contact in the German Trade Ecosystem German Exporters Federal Government International Banks German Banks Chamber of Commerce ECAs 11
3 How we can help you with Hermes Cover
Finance your imports effectively Goods Finance We offer third-party credit support to German exporters and their banks by virtue of comprehensive insurances and/or guarantees. We enable banks to benefit from the AAA-credit rating of the federal republic of Germany, limiting banks capital requirements and thus freeing up lines to YOU. We enable but also require (at least partial) German sourcing as a core prerequisite to access our product suit. 13
Advantages of using Export Credit Guarantees New markets An experienced partner Profit from a AAA rating Diversify your financing options Facilitate access to new markets, especially to emerging markets Hermes can look back on more than 60 years experience in facilitating trade as one of the major players in the market Hermes cover comes with the AAA of the Federal Republic of Germany, lowering your borrowing costs Domestic borrowing or bonds are not your only options Access Advice Strong partner Perfect Concept Flexibility Long tenors possible (following the OECD rules) Competitive all-in-costs (fees, pricing, interests, etc.) Can open the door to international investors 14
In Short Euler Hermes is Germany s official export credit agency. We enable the procurement of products and services from Germany international customers YOU. We offer strong credit support to German exporters and their banks, indirectly allowing - YOU - to benefit from Germany s top AAA-credit rating. We ask for (at least partial) sourcing of German goods and services as a core pre-requisite. 15
Thank you for your attention! Ingo Schwutke Department Manager Euler Hermes Mail: ingo.schwutke@eulerhermes.com Further information is provided under: Hotline: +49 (0) 40 / 88 34-90 00 info@agaportal.de All rights reserved. Any reproduction or distribution in any medium as a whole or in part requires the written consent of Euler Hermes Aktiengesellschaft. Copyright Euler Hermes Aktiengesellschaft www.agaportal.de