ANNOUNCEMENT 31 Jan 2019
In January 2019, the German Export Credit Agency Euler Hermes Aktiengesellschaft provided a guarantee to support a German company's provision of road work services in Angola.
NUMBER OF INTERVENTIONS
AGA-Portal, Project information January 2019: https://www.agaportal.de/en/exportkreditgarantien/praxis/projektinformationen
AGA-Portal, Main features of export credit guarantees:
AGA-Portal, Foreign Content: https://www.agaportal.de/en/exportkreditgarantien/verfahren/auslaendische-zulieferungen
The German Export Credit Agency Euler Hermes Aktiengesellschaft granted an export credit guarantee in January 2019. The guarantee supports the German company Gauff GmbH & Co. Engineering KG's road work services in Angola. The stretch of road is around 60 km. In the context of this project, the company is operating in a joint venture with INZAG Germany GmbH.
The German Export Credit Agency Euler Hermes Aktiengesellschaft only publishes value ranges for the projects it finances. The present project is in category 3. This category includes projects with a financing value between EUR 51 and 100 million. The GTA assumes the lower bound amount of the respective category, in this case, 51 million EUR (approx. USD 58.4 million), as the conservative estimate of the project value. The maturity of the loan will be 10 years. The financing institution is Commerzbank AG.
Germany provides Export Credit Guarantees and Untied Loan Guarantees to support German exports. The issuance of such guarantees is managed on "behalf of the Federal Republic of Germany by Euler Hermes Aktiengesellschaft".
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets or from foreign subsidiaries.
The German Export Credit Agency's approval process depends on the percentage of foreign-sourced goods included in the value of the export contract. Export contracts which include a foreign content value lower than 49% are approved without further investigation. However, if the export contract value contains more than 49% in foreign-sourced goods, an "Interministerial Committee will decide whether a transaction may be covered on the merits of the individual case." According to the agency, the criteria for this evaluation include the likely effect of the transaction on German employment, whether the location of the project's management remains in Germany, the domestic availability of foreign-sourced inputs, and the German exporter's capacity utilisation rate.