In the fourth quarter of 2015 we reported that the authority of the Export-Import Bank of the United States (“EXIM Bank”) lapsed on 30 June 2015. This resulted in EXIM Bank ceasing active lending.
In a welcome move for the project finance sector, both the Senate and the House of Representatives voted for the reauthorisation of EXIM Bank, and on 4 December 2015 President Obama signed the law reauthorising EXIM Bank until 30 September 2019.
EXIM Bank secured significant bipartisan support, however there remain critics from certain quarters who continue to view the ECA as a form of corporate welfare that may disadvantage taxpayers and private enterprise. It will be important for EXIM Bank to work hard to secure its long-term authorisation after September 2019.
US-Exim requires approval from its board of directors for any deal over US$10m. At the time of writing, the board still awaits Senate confirmation of a director nomination to achieve a quorum, therefore activity has been restricted to smaller-scale transactions since reauthorisation.
Fred Hochberg, Chairman and President of EXIM Bank, noted that the bank is quickly returning to full speed and emphasised his team’s dedication to the US’ exporters in the competitive global economy. With over 85 active ECAs in the world, and certain sectors requiring ECA support before submitting proposals, the reauthorisation of EXIM Bank is positive news for US exporters and their competitiveness on a global scale.