The Export-Import Bank of the United States (Ex-Im Bank) offers favorable financing options to facilitate the export of U.S.-produced renewable energy goods and services.
In 2009, to encourage investment and trade in renewable energy, the member states of the Organization for Economic Cooperation and Development (OECD) agreed to longer repayment terms for export credit agency financing provided for the purchase of renewable energy exports.1 Ex-Im Bank has incorporated these long-term repayment options into loan and guarantee packages available to purchasers of U.S. exports seeking to develop clean energy from wind, water and solar sources. Through its Environmental Exports Program (EEP), Ex-Im Bank now offers 18-year repayment terms, low interest rates, capitalization of interest during the construction of facilities, and local cost financing of up to 30% of the U.S. supply contract.2 The EEP, first established in 1994, has financed a substantial number of foreign renewable energy projects involving U.S. exports and its portfolio continues to grow as more developers seek to invest in renewable energy projects.3
The EEP provides an array of financing options to facilitate investment in renewable exports, including loans, guarantees, and insurance. Ex-Im Bank will either lend directly to the purchaser of U.S. exports, or it will provide loans to intermediary lenders which then offer funds to the overseas purchaser. Both short- and long-term loans are available in dollars, euros, and other currencies.4 To encourage financing, lenders are guaranteed that the U.S. government will repay loans made to overseas purchasers of renewable energy products produced in the United States.5 Ex-Im Bank will also back commercial lenders to provide working capital loans to U.S. companies in need of capital to prepare their products for export and compete in the international market.6 Environmental export credit insurance is available to protect U.S. exporters in the case that commercial or political events disrupt payments from the overseas purchasers.7
Developers and purchasers seeking smaller loans to buy U.S. renewables can borrow $3 million to $10 million through an expedited application process called Renewable Express.8 Under this program the borrower's credit can be assessed at a competitive price and Ex-Im Bank can approve the application in less than two months.9
Examples of successful renewable energy financing from Ex-Im Bank
Gamesa Technology Corp., based in Langhorne, PA, has invested over $150 million to create manufacturing facilities for wind-energy turbines and blades, and, with the help of Ex-Im Bank financing, has secured a profitable contract to export these products.10 In 2011, Gamesa will ship 51 wind turbines (102 MW) to Honduras to be used on the first large utility-scale wind farm in the country. The wind farm is expected to provide about six per cent of Honduras's electricity.11 Energía Eólica de Honduras, S.A. will purchase the wind turbines from Gamesa with a $159 million direct loan from Ex-Im Bank.12 The loan features an 18-year repayment period and low interest rates.
On May 26, 2011, Ex-Im Bank announced its approval of a $22.2 million euro-denominated guaranteed loan with a 15 year tenor to buy wind turbines from a U.S. exporter. The special purpose borrowers ARG Energie S.R.L., Eoland S.R.L. and PurEnergy Land S.R.L. will purchase wind turbines from Northern Power Systems Inc., a U.S. manufacturer based in Barre, VT.13 This transaction has facilitated the construction of 55 wind towers in southern Italy, for sale of electricity into the Italian national power grid eligible for the attractive 15 year feed-in tariff available for small wind-power projects.14
Through the Renewable Express program Ex-Im Bank has recently processed in 41 days a guarantee of a euro-denominated loan of $10.3 million from KBC Bank NV in Belgium for the purchase of solar panels to be installed on the rooftop of a supermarket distribution center owned by the Delhaize Group.15 Solyndra LLC, headquartered in Fremont, CA, will supply the panels needed to construct the three-megawatt project outside of Brussels.16
If you are interested in learning more or are considering pursuing an EEP financing please contact us.