| Finance
UKEF has substantial risk capacity for well-structured
projects with good project sponsors.’
UK export contracts of similarly significant size are in prospect in HVOs across a range of other markets and sectors including airports, healthcare, mining, transport, construction and infrastructure. Many of these examples have come about because of the proactive engagement of UKEF with project sponsors in- market at an early stage in the design of the projects when major procurement decisions have yet to be taken. Through this engagement UKEF officials are able to outline to the sponsors the scale and type of UKEF financing support potentially available to them provided they decide to procure corresponding amounts of eligible goods and services from the UK. At the same time UKEF routinely supplies non- committal, early stage, “letters of interest” to UK companies bidding for specific contracts in the HVO programme, as on other large projects. These letters of interest outline the UKEF-supported credit terms and amounts that might be available to the project sponsors should the UK bidder win the contract. They are frequently as generous as the OECD rules
BRITISH SUCCESSES
l In 2011 UKEF guaranteed a US$1bn long term loan facility to Petrobras in Brazil for the purpose of financing procurement of goods and services from the UK in connection with Petrobras’ huge offshore drilling and exploration programme in the Campos, Santos and Espirito Santo basins. At the time of writing approximately US$600m of the loan had been utilised to finance a number of long-term rig leasing contracts awarded to UK-based companies. Further potential contracts currently under active consideration could lead to full utilisation of the overall US$1bn UKEF-supported
loan capacity in coming months. l GE Power Conversion in Rugby has
been awarded approximately US$600m of marine power conversion and systems contracts with a variety of Brazilian shipyards and EPC contractors as a direct result of a prospective line of credit, with a value of up to US$800m being negotiated by UKEF with a special purpose entity called Sete which has been commissioned by Petrobras to supply 29 drillships as part of the drilling and exploration programme. Significant further contracts which could also be financed under the line are currently in prospect as a result of UKTI’s sustained activity to introduce potential UK suppliers to the Brazilian companies involved in this programme.
44 GLOBAL OPPORTUNITY 2014 | ISSUE 01
governing ECA activities allow. In many cases UKEF’s financing support can also be extended to significant amounts of third country and local content within the overall export contract - a flexibility that can provide UK exporters with a significant competitive edge. Such letters therefore offer a commercially valuable complement to the UK exporter’s cash bid. Before the 2008/9 global financial crisis such engagement would have had more limited impact. At that time the international banks and bond markets - who have no commercial interest to support procurement from one country more than any other - seemed to have ample capacity to provide most of the required debt finance without needing to turn to official financing agencies for support. ECA business was generally in the doldrums. Now, however, the lending capacities of the banks are much reduced. In today’s economic environment debt finance backed by national ECAs, such as UKEF, often constitutes the very core of large project debt financing plans. This creates a significant opportunity to encourage project
sponsors to take advantage of UKEF’s lending support capabilities by making procurement decisions in favour of UK suppliers. UKEF has substantial risk capacity for well-structured projects with good project sponsors. Even very large, but economically viable, projects located in poor markets can frequently be funded with UKEF support using appropriate structured and project financing techniques. UKEF is well respected internationally for its experience and expertise in these areas. In general UKEF’s main challenge is to raise the awareness of overseas project sponsors and UK exporters of its support facilities and how they can help win business, including in the HVO programme. This is where working ever-more closely with UKTI colleagues at home and abroad comes into the picture. UKEF frequently supports UKTI by participating in HVO-related events including the many inward and outward missions organised by UKTI aimed at introducing overseas project sponsors to established and new UK exporters of all sizes. Recent overseas examples include the UAE, Vietnam, Brazil, Malaysia, Russia and Colombia. More are planned. UKEF also participates generally in UKTI’s overall communications strategy with UK supply chain companies in relation to HVO business. It’s important to understand, for example, that although UKEF-supported credit lines may not always be needed by overseas project sponsors in respect of HVO projects UKEF may nevertheless be relevant to UK exporters on all HVOs where companies are concerned about the risks of not being paid or need help to meet the buyer’s bonding requirements or with working capital. In all these scenarios UKEF’s products and services can help. Furthermore UKEF now has an extensive network of specialised Export Finance Advisers (EFAs) co-located with UKTI staff around the regions. UKEF’s EFAs are only too happy to talk issues through on a bilateral basis, whether on the phone or at the company’s own premises.
GO
FURTHER INFORMATION
www.gov.uk/uk-export-finance
global-opportunity.co.uk
|
FINANCE
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146 |
Page 147 |
Page 148 |
Page 149 |
Page 150 |
Page 151 |
Page 152 |
Page 153 |
Page 154 |
Page 155 |
Page 156 |
Page 157 |
Page 158 |
Page 159 |
Page 160 |
Page 161 |
Page 162 |
Page 163 |
Page 164 |
Page 165 |
Page 166 |
Page 167 |
Page 168 |
Page 169 |
Page 170 |
Page 171 |
Page 172 |
Page 173 |
Page 174 |
Page 175 |
Page 176 |
Page 177 |
Page 178 |
Page 179 |
Page 180 |
Page 181 |
Page 182 |
Page 183 |
Page 184 |
Page 185 |
Page 186 |
Page 187 |
Page 188 |
Page 189 |
Page 190 |
Page 191 |
Page 192 |
Page 193 |
Page 194 |
Page 195 |
Page 196 |
Page 197 |
Page 198 |
Page 199 |
Page 200