ANNOUNCEMENT 30 Jun 2019
The German Export Credit Agency Euler Hermes Aktiengesellschaft and KfW IPEX-Bank provided financing to support a German company's export of gas and steam turbine generation sets to Bahrain.
NUMBER OF INTERVENTIONS
AGA-Portal, Project information June 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
In June 2019, KfW IPEX-Bank granted an export loan which in turn is guaranteed by the German Export Credit Agency Euler Hermes Aktiengesellschaft. The export credit guarantee supports a non-disclosed German company's export of gas and steam turbine generation sets to Bahrain.
KfW has not disclosed the total value of the loan, whilst the German Export Credit Agency Euler Hermes Aktiengesellschaft only publishes value ranges for the projects it finances. The present project is in category 4. This category includes projects with a financing value between EUR 101 and 200 million. The GTA assumes the lower bound amount of the respective category, in this case, 101 million EUR (approx. USD 115 million), as the conservative estimate of the project value. The maturity of the KfW IPEX-Bank export loan is 10 years.
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.