Mexico - Project FinancingMexico - Financing
For large infrastructure projects, several financing instruments are available. Project consortiums often develop a finance mix between development banks, multilaterals, commercial banks, and national export credit agencies, such as the U.S. Export-Import Bank.
The Export-Import Bank of the United States (EXIM), an independent agency of the Federal Government, offers various short-, medium-, and long-term export finance and insurance programs. Of specific interest to U.S. exporters are the guarantees for medium-term loans to foreign buyers of capital equipment. Most loans are made by U.S. banks with EXIM’s guarantee. More than 85 percent of EXIM’s transactions in recent years directly benefited small businesses. In Fiscal Year 2018, EXIM Bank’s total exposure in Mexico was USD 5.48 million and guarantee authorizations were USD 33 million. Mexico remains one of the largest markets in EXIM’s portfolio.
Much of EXIM’s activity is under so-called bundling facilities. A bundling facility is a large medium-term loan made to a Mexican bank by a U.S. bank with the guarantee of EXIM. The Mexican bank then makes loans to Mexican companies for the purchase of American capital goods. There also are several U.S.-based banks that extend EXIM bank credits in Mexico. The major Mexican commercial banks have signed agreements with EXIM bank to grant lines of credit to Mexican firms that purchase U.S.-made products. Many major Mexican banks have Master Guarantee Agreements. Such credits generally are available only to Mexican blue-chip companies and to their suppliers with firm contracts.
Additionally, EXIM has made financing for renewable energy a top priority since the inception of its Environmental Exports Programs in 1994, offering competitive financing terms (up to 18 years in some cases) to international buyers for the purchase of U.S. origin environmental goods and services.
The U.S. Trade and Development Agency (USTDA) provides grant funding for infrastructure project planning activities to help promote U.S. exports. By assisting U.S. firms to become involved in the early stages of project development, USTDA increases awareness of upcoming projects for the U.S. business community, growing the probability that U.S. exports will be used during the implementation stages. USTDA works closely with multilateral development banks, including the World Bank and the Inter-American Development Bank, to help U.S. firms take advantage of projects financed by those banks. Additionally, USTDA organizes reverse trade missions to introduce Mexican project sponsors to U.S. technology and companies. USTDA has an active program in Mexico, funding projects in a wide range of sectors, including energy, transportation, telecommunications, and the environment.
USTDA has published a comprehensive Resource Guide for U.S. companies on Priority Infrastructure Projects in Mexico.
The U.S. Small Business Administration (SBA) provides financial and business development assistance to encourage and help small businesses develop an export component to their businesses. The SBA assists businesses in obtaining the capital needed to explore, establish, or expand in international markets. SBA’s export loans are available under SBA’s guaranty program. Prospective applicants should tell their lenders to seek SBA participation if the lender is unable or unwilling to make the loan directly.
SBA also offers an Export Revolving Line of Credit (ERLC) program that is designed to help small businesses obtain short-term financing to sell their products and services abroad. The program guarantees repayment to a lender in the event an exporter defaults. The ERLC protects only the lender from default by the exporter; it does not cover the exporter should a foreign buyer default on payment. Lenders and exporters must determine whether foreign receivables need credit risk protection.
The U.S. Commercial Service maintains Commercial Liaison Offices in each of the main Multilateral Development Banks, including the Inter-American 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 Inter-American Development Bank (http://export.gov/idb) and the World Bank (http://export.gov/worldbank).
U.S. Export-Import Bank (http://www.exim.gov)
The Export-Import Bank of the United States (EXIM), an independent agency of the Federal Government, offers various short-, medium-, and long-term export finance and insurance programs. Of specific interest to U.S. exporters are the guarantees for medium-term loans to foreign buyers of capital equipment. Most loans are made by U.S. banks with EXIM’s guarantee. More than 85 percent of EXIM’s transactions in recent years directly benefited small businesses. In Fiscal Year 2018, EXIM Bank’s total exposure in Mexico was USD 5.48 million and guarantee authorizations were USD 33 million. Mexico remains one of the largest markets in EXIM’s portfolio.Much of EXIM’s activity is under so-called bundling facilities. A bundling facility is a large medium-term loan made to a Mexican bank by a U.S. bank with the guarantee of EXIM. The Mexican bank then makes loans to Mexican companies for the purchase of American capital goods. There also are several U.S.-based banks that extend EXIM bank credits in Mexico. The major Mexican commercial banks have signed agreements with EXIM bank to grant lines of credit to Mexican firms that purchase U.S.-made products. Many major Mexican banks have Master Guarantee Agreements. Such credits generally are available only to Mexican blue-chip companies and to their suppliers with firm contracts.
Additionally, EXIM has made financing for renewable energy a top priority since the inception of its Environmental Exports Programs in 1994, offering competitive financing terms (up to 18 years in some cases) to international buyers for the purchase of U.S. origin environmental goods and services.
U.S. Trade and Development Agency (http://www.ustda.gov)
The U.S. Trade and Development Agency (USTDA) provides grant funding for infrastructure project planning activities to help promote U.S. exports. By assisting U.S. firms to become involved in the early stages of project development, USTDA increases awareness of upcoming projects for the U.S. business community, growing the probability that U.S. exports will be used during the implementation stages. USTDA works closely with multilateral development banks, including the World Bank and the Inter-American Development Bank, to help U.S. firms take advantage of projects financed by those banks. Additionally, USTDA organizes reverse trade missions to introduce Mexican project sponsors to U.S. technology and companies. USTDA has an active program in Mexico, funding projects in a wide range of sectors, including energy, transportation, telecommunications, and the environment.USTDA has published a comprehensive Resource Guide for U.S. companies on Priority Infrastructure Projects in Mexico.
U.S. Small Business Administration (http://www.sba.gov)
The U.S. Small Business Administration (SBA) provides financial and business development assistance to encourage and help small businesses develop an export component to their businesses. The SBA assists businesses in obtaining the capital needed to explore, establish, or expand in international markets. SBA’s export loans are available under SBA’s guaranty program. Prospective applicants should tell their lenders to seek SBA participation if the lender is unable or unwilling to make the loan directly.SBA also offers an Export Revolving Line of Credit (ERLC) program that is designed to help small businesses obtain short-term financing to sell their products and services abroad. The program guarantees repayment to a lender in the event an exporter defaults. The ERLC protects only the lender from default by the exporter; it does not cover the exporter should a foreign buyer default on payment. Lenders and exporters must determine whether foreign receivables need credit risk protection.