Israel - Project Financing Israel - Project Financing
The Ex-Im Bank and the U.S. Overseas Private Investment Corporation (OPIC) offer project financing and other financial services. Ex-Im Bank provides a range of financial programs ranging from medium and long-term guarantees, insurance programs, working capital guarantee to project finance. The Project Finance Division provides financing to projects that are dependent on the project cash flows for repayment. In March 2014, OPIC announced a $250 million loan for a concentrated solar power (CSP) project in Israel’s Negev Desert, Israel’s first large-scale solar project.
OPIC supports U.S. investment in emerging markets through project loans and loan guarantees that provide medium to long-term funding to ventures involving significant equity and/or management participation by U.S. businesses. OPIC also provides insurance against a broad range of political risks. Rather than relying on sovereign or sponsor guarantees, OPIC's project financing program looks for repayment from the cash flows generated by the project. For projects sponsored by U.S. small businesses or cooperatives, financing may be provided through direct loans. These loans generally range in amount from $2 million - $10 million. Loan guarantees, which typically are used for larger projects, range in size from $10 million - $75 million, but in certain instances can be as high as $200 million.
U.S. companies will find that Israel does not suffer from any lack of capital or trade financing. There are no unusual rules or regulations concerning export financing, apart from the foreign currency regulations noted above. Loans at market interest rates are available from commercial banks to finance the manufacture of exports including the import of raw materials and components for export products. Loans vary depending upon the raw material requirements, cost of conversion and collection timeframe.
U.S. exporters may find export financing and insurance available through commercial sources; City/State-sponsored export financing and loan guarantee programs; the U.S. Small Business Administration (SBA); the Ex-Im Bank, which can provide U.S. exporters with export credit insurance, pre-export financing and working capital guarantees; and other sources. Ex-Im Bank can also provide established Israeli buyers with fixed-rate financing for their purchases from U.S. exporters. Ex-Im Bank’s Environmental Export Insurance Policy provides enhanced short-term insurance for medium and long-term loans and guarantees for environmental exports, projects and services. Israel does not receive PL-480 or similar U.S. Department of Agriculture (USDA) program commodity grants. USDA’s GSM-102 funds and supplier credit guarantees are available but not sufficiently attractive to most parties.
There are three bilateral U.S.-Israel government funded organizations, which provide financing for joint R&D and research projects: The U.S. Ex-Im Bank and the U.S. Overseas Private Investment Corporation (OPIC) offer project financing and other financial services. Ex-Im Bank provides a range of financial programs ranging from medium and long-term guarantees, insurance programs, working capital guarantee to project finance. The Project Finance Division provides financing to projects that are dependent on the project cash flows for repayment. In March 2014, OPIC announced a $250 million loan for a concentrated solar power (CSP) project in Israel’s Negev Desert, Israel’s first large-scale solar project.
OPIC supports U.S. investment in emerging markets through project loans and loan guarantees that provide medium to long-term funding to ventures involving significant equity and/or management participation by U.S. businesses. OPIC also provides insurance against a broad range of political risks. Rather than relying on sovereign or sponsor guarantees, OPIC's project financing program looks for repayment from the cash flows generated by the project. For projects sponsored by U.S. small businesses or cooperatives, financing may be provided through direct loans. These loans generally range in amount from $2 million - $10 million. Loan guarantees, which typically are used for larger projects, range in size from $10 million - $75 million, but in certain instances can be as high as $200 million.
U.S. companies will find that Israel does not suffer from any lack of capital or trade financing. There are no unusual rules or regulations concerning export financing, apart from the foreign currency regulations noted above. Loans at market interest rates are available from commercial banks to finance the manufacture of exports including the import of raw materials and components for export products. Loans vary depending upon the raw material requirements, cost of conversion and collection timeframe.
U.S. exporters may find export financing and insurance available through commercial sources; City/State-sponsored export financing and loan guarantee programs; the U.S. Small Business Administration (SBA); the U.S. Ex-Im Bank, which can provide U.S. exporters with export credit insurance, pre-export financing and working capital guarantees; and other sources. Ex-Im Bank can also provide established Israeli buyers with fixed-rate financing for their purchases from U.S. exporters. Ex-Im Bank’s Environmental Export Insurance Policy provides enhanced short-term insurance for medium and long-term loans and guarantees for environmental exports, projects and services. Israel does not receive PL-480 or similar U.S. Department of Agriculture (USDA) program commodity grants. USDA’s GSM-102 funds and supplier credit guarantees are available but not sufficiently attractive to most parties.
There are three bilateral U.S.-Israel government funded organizations, which provide financing for joint R&D and research projects:
U.S.-Israel Binational Industrial Research and Development Foundation (BIRD)
Established in 1977, BIRD supports joint industrial R&D projects designed to develop, manufacture, sell and support an innovative product. A pair of companies, one from each country, must conduct the project. BIRD often plays a proactive role in providing matchmaking services between potential U.S. and Israeli strategic partners.
BIRD provides funding covering up to 50% of project development costs, up to $1M per project, with the goal of expanding cooperation between U.S. and Israeli private high-tech industries. The mission of the Foundation is “to stimulate, promote and support joint (non-defense) industrial R&D of mutual benefit to the two countries”. Projects are supported in the areas of Agriculture, Communications, Construction Technologies, Electronics, Electro-optics, Life Sciences, Software, Homeland Security, Renewable and Alternative Energy and other technology sectors.
According to the Foundation, BIRD supports approximately 20 projects annually. The cumulative sales of products developed through BIRD projects have exceeded $10 billion. Awards typically range from $700,000 to $900,000. The award size varies based on total project budget and other considerations.
U.S.-Israel Binational Science Foundation (BSF)
The U.S.-Israel Binational Science Foundation (BSF) promotes scientific relations between the U.S. and Israel by supporting collaborative research projects in a wide area of basic and applied scientific fields, for peaceful and non-profit purposes.
Founded in 1972 by an agreement between the United States and Israel, the BSF is an independent body, directed by a board of governors consisting of five American and five Israeli members. Its base of operation is in Israel.
Funding for research derives from the annual interest on an endowment contributed in equal parts by the two countries. Grants are made on a competitive, peer reviewed basis, juried by leading scientists from the U.S., Israel and around the world. Eligible projects must demonstrate outstanding scientific merit and clear collaboration between Israeli and American researchers from institutions throughout the two countries.
Since its inception, the BSF has awarded some $600 million to over 5,000 research projects of the highest quality. Many of these have led to important scientific, medical and technological breakthroughs with wide-ranging practical applications.
U.S.-Israel Binational Agricultural Research and Development Fund (BARD)
BARD funds, generated from a $100 million endowment, finance cooperative agricultural research between scientists of the United States and Israel on topics considered to be of mutual benefit to the agriculture sectors of both countries. BARD also supports international workshops and provides post-doctoral fellowships.