ANNOUNCEMENT 31 May 2019
In May 2019, the German Export Credit Agency Euler Hermes Aktiengesellschaft provided a guarantee to support a German company's exports of a steam turbine to Egypt.
NUMBER OF INTERVENTIONS
AGA-Portal, Project information May 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
AGA-Portal, further information concerning near cash terms: https://www.agaportal.de/en/exportkreditgarantien/grundlagen/bauleistungsdecku
The German Export Credit Agency Euler Hermes Aktiengesellschaft granted an export credit guarantee in May 2019. The guarantee supports the German company MAN Energy Solutions SE's export of a steam turbine to Egypt.
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 credit period is under near-cash terms.
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.