China - Project Financing China - Financing
The U.S. Export-Import Bank (Ex-Im Bank), an independent agency of the U.S. Government, seeks to increase the competitive position of U.S.-based exporters in overseas markets by supporting the financing of U.S. export sales. All of Ex-Im Bank’s financial products are available for Chinese buyers of U.S goods and services for the short, medium and long term. Generally speaking, Ex-Im Bank guarantees the repayment of loans or makes loans to international purchasers of U.S. goods and services. Ex-Im Bank also extends export credit insurance thus protecting U.S. exporters against the risks of non-payment for political or commercial reasons. A reasonable assurance of repayment on every transaction financed must be provided.
Ex-Im Bank signed a Framework Agreement (Agreement) with China’s Ministry of Finance (MoF). According to this Agreement, the MoF will provide a sovereign guarantee for imports from the U.S. for Chinese Government projects. The Sovereign Guaranteed Loan Program (SGLP) was created in 2005 to help strengthen economic and trade ties between the two countries by offering beneficial terms to boost U.S. exports of advanced technology and equipment.
In April 2017, Ex-Im Bank and China’s Ministry of Finance (MoF) discussed the future trade finance cooperation between US and China. The meeting was held after China implemented its New Budget Law in 2015. This law which was meant to better manage the local government debts, restricts China EXIM and MOF’s ability to support Sovereign Guarantee loans under the U.S.-China Framework Agreement. U.S. Ex-Im Bank and China’s Ministry of Finance (MoF) are currently in the process of negotiating a new agreement.
Eligible Buyers: The SGLP program is not limited to a specific set of customers, but procurements must be pre-approved at the municipal and provincial levels before being considered for approval by the MoF. To date, the end-users of U.S. export products have principally been SOEs, agricultural cooperatives, and provincial and municipal authorities.
Eligible Products: The SGLP is targeted to cover a wide range of U.S. equipment and services exports, in sectors ranging from environmental technology, water and wastewater, renewable energy, agricultural machinery, medical equipment, firefighting equipment, machine technology, and others.
For private sector borrowers, U.S. Ex-Im Bank will accept financial statements audited according to acceptable accounting practices with auditor’s notes and statements that adequately disclose financial conditions and afford a reasonable basis for reliance on the information provided. The terms and conditions of standard export financing are governed by the OECD Arrangement on export credits.
For U.S. Ex-Im Bank direct loans, lending rates (commercial interest reference rates or CIRR) are set monthly and are based on a spread above U.S. Treasuries. The U.S. Ex-Im Bank is also open for limited-recourse, project financing in China. Such a project is one in which anticipated cash flows can cover debt service repayment to lenders and payment of dividends to shareholders, and is without government guarantees. Loans under this program will be available to companies operating investment projects that require imports from the United States. Project financing is also available from the various multilateral financial institutions as described below.
For more information concerning U.S. Ex-Im Bank programs and application procedures contact Richard Pearson, Business Development Officer, Global Business Development, Export-Import Bank of the United States tel. (202) 565-3709, firstname.lastname@example.org. Exposure fee calculations and applications can be found on-line.
U.S. Department of Agriculture
The USDA GSM-102 program provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries — mainly developing countries — that have sufficient financial strength to have foreign exchange available for scheduled payments.
The program is available to exporters of:
high-value, consumer-oriented, processed products such as frozen foods, fresh produce, meats, condiments, wine, and beer;
intermediate products such as hides, flour, and paper products; and bulk products such as grains, oilseeds, and rice.
U.S. Trade and Development Agency
The U.S. Trade and Development Agency (USTDA) helps companies create U.S. jobs through the export of U.S. goods and services for priority development projects in emerging economies. USTDA links U.S. businesses to export opportunities by funding project planning activities, pilot projects, and reverse trade missions while creating sustainable infrastructure and economic growth in partner countries.
USTDA promotes economic growth in emerging economies by facilitating the participation of U.S. businesses in the planning and execution of priority development projects in host countries. The Agency’s objectives are to help build the infrastructure for trade, match U.S. technological expertise with overseas development needs, and help create lasting business partnerships between the United States and emerging economies.
If a priority project exists for which you wish to consider U.S. sources of goods and services, please contact Mr. Carl B. Kress, Regional Director for East Asia, at USTDA's Arlington, VA office. Tel: (703) 875-4357, Fax: (703) 875-4009, Email: email@example.com. In China, contact the USTDA Representatives, Mr. Steven Winkates and Ms. Wan Xiaolei, at the U.S. Embassy Beijing at Tel: (86 10) 8531-4534, Fax: (86 10) 8531-3701.
Multilateral Development Banks
U.S. Commercial Service Liaison Offices at the Multilateral Development Banks (Asian Development Bank, World Bank)
The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the Asian Development Bank and the World Bank. These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders. Learn more by contacting the Commercial Liaison Offices to the Asian Development Bank and the World Bank.