Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.

Export Credits

The U.S. Export-Import Bank (Ex-Im Bank), an independent agency of the U.S. government, seeks to increase the competitive position of U.S.-based exporters in overseas markets by supporting the financing of U.S. export sales. Generally speaking, Ex-Im Bank guarantees the repayment of loans or makes loans to international purchasers of U.S. goods and services.  Ex-Im Bank also extends export credit insurance thus protecting U.S. exporters against the risks of non-payment for political or commercial reasons.  A reasonable assurance of repayment on every transaction financed must be provided.
 
The Ex-Im Bank first signed a Framework Agreement with China’s Ministry of Finance (MoF) in 2005.   According to this agreement, a Chinese bank (usually China EXIM) acted as the borrower, with the MoF providing a sovereign guarantee of the borrower bank’s obligations for imports from the U.S. for Chinese government projects.  The Sovereign Guaranteed Loan Program (SGLP) was created to help strengthen economic and trade ties between the two countries by offering beneficial terms to boost U.S. exports of advanced technology and equipment.
 
SGLP’s provided key advantages in a waiver of import duties and VAT for eligible projects, procedures to facilitate the approvals process for Chinese buyers, and a pre-negotiated form of Master Guarantee Agreement to streamline documentation.  The program helped finance a wide range of exports to China, ranging from renewable energy, medical equipment, and environmental products to transportation, telecommunications, and other infrastructure equipment.
 
However, the SGLP is currently unable to be offered.  In April 2017, the Ex-Im Bank and China’s Ministry of Finance (MoF) discussed the need for a new framework agreement after China implemented its New Budget Law in 2015.  While the law was meant to better manage local government debts, the law restricted China EXIM and MOF’s ability to support the SGLP under the existing agreement.  The U.S. Ex-Im Bank and China’s Ministry of Finance (MoF) remain in the process of negotiating a new agreement.   Until further agreement between the two sides is reached, SGLP cannot be offered. 
 
Although the SGLP is currently restricted, other financial services from the Ex-Im bank are available for Chinese buyers of U.S goods and services for the short, medium and long term.  Please refer to the U.S. Ex-Im Bank for further details.
 
For private sector borrowers, U.S. Ex-Im Bank will accept financial statements audited according to acceptable accounting practices with auditor’s notes and statements that adequately disclose financial conditions and afford a reasonable basis for reliance on the information provided.  The terms and conditions of standard export financing are governed by the OECD Arrangement on export credits.
 
For U.S. Ex-Im Bank direct loans, lending rates (commercial interest reference rates or CIRR) are set monthly and are based on a spread above U.S. treasuries.  The U.S. Ex-Im Bank is also open for limited-recourse, project financing in China. Such a project is one in which anticipated cash flows can cover debt service repayment to lenders and payment of dividends to shareholders and is without government guarantees.  Loans under this program will be available to companies operating investment projects that require imports from the United States. Project financing is also available from the various multilateral financial institutions as described below.
 
For more information concerning U.S. Ex-Im Bank programs and application procedures contact:
 
Richard Pearson
Business Development Officer, Global Business Development, Export-Import Bank of the United States
tel. (202) 565-3709, 
richard.pearson@exim.gov.
*Exposure fee calculations and applications can be found on-line.

U.S. Department of Agriculture

The USDA GSM-102 program provides credit guarantees to encourage financing of commercial exports of U.S. agricultural products. By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries — mainly developing countries — that have sufficient financial strength to have foreign exchange available for scheduled payments.
 
The program is available to exporters of:

  • high-value, consumer-oriented, processed products such as frozen foods, fresh produce, meats, condiments, wine, and beer;
intermediate products such as hides, flour, and paper products; and bulk products such as grains, oilseeds, and rice.

Multilateral Development Banks

The Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the Asian Development Bank and the World Bank.  These institutions lend billions of dollars in developing countries on projects aimed at accelerating economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development.  The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects, and advocate on behalf of American bidders.
 
Learn more by contacting the Commercial Liaison Offices to the Asian Development Bank and the World Bank.

Asian Infrastructure Investment Bank (AIIB)

The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank based in Beijing with a AAA credit rating.  The AIIB, which was founded in 2016, currently has 70 members as well as 27 perspective members; members are not limited to the Asian continent, though are separated into regional and non-regional members.  The U.S. and Japan are not members.  
 
The mission of the bank is to improve social and economic outcomes in Asia, with India, Indonesia, and Turkey being among the three largest recipients of funds.  The main area of promotion for the AIIB is cross-border infrastructure.  The bank is not directly related to the Chinese government; however, a Chinese-appointed director holds 27% voting power giving China veto power in the AIIB.

Web Resources

Export-Import Bank of the United States 
Country Limitation Schedule                                             
OPIC 
Trade and Development Agency BA's Office of International Trade     
U.S. Agency for International Development 
Commercial Liaison Office to the Asian Development Bank               
Commercial Liaison Office to the World Bank
Asian  Infrastructure Investment Bank (AIIB) 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.