ANNOUNCEMENT 30 Apr 2019
In April 2019, the German Export Credit Agency Euler Hermes Aktiengesellschaft provided a guarantee to support a German company's exports of machinery and equipment for the production foils to the United Arab Emirates.
NUMBER OF INTERVENTIONS
AGA-Portal, Project information April 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 April 2019. The guarantee supports the German company Textima Export Import GmbH's export of foil production machinery and equipment to Abu Dhabi, the United Arab Emirates. The guarantee additionally supports the construction of a factory.
The German Export Credit Agency Euler Hermes Aktiengesellschaft only publishes value ranges for the projects it finances. The present project is in category 2. This category includes projects with a financing value between EUR 16 and 50 million. The GTA assumes the lower bound amount of the respective category, in this case, 16 million EUR (approx. USD 18 million), as the conservative estimate of the project value. The maturity of the loan is 10 years. The financing institution is AKA Ausfuhrkredit-Gesellschaft mit beschränkter Haftung.
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.