How it works

EKF secures financing of large FLSmidth order to Jordan

A combination of two EKF-solutions made the difference when international and local banks sought a financing solution for a new cement plant in Jordan.
Case facts
What
FLSmidth designs the production line of a new cement plant in Jordan and supplies all necessary equipment.
How much
FLSmidth supplies worth DKK 850 million.
EKF's role
Through the export lending scheme EKF lends DKK 380 million to the Jordanian buyer. In addition, EKF issues an export credit guarantee covering 95 per cent of the loan.
EKF product
Export loans; Buyer credit guarantee
When
2010-2017
Download case as PDF
  • Step 1
    The challenge
    Quote

    A lot of cement projects simply wouldn’t see the day without an export credit guarantee. That’s also the case with the plant in Jordan.

    Tine Bremholm Kokfelt, Head of Project and Export Finance, FLSmidth.

    ​In July 2008 FLSmidth signed a contract with the Jordanian company Modern Cement & Mining Company to supply equipment for a new cement plant south of Amman.

    The Jordanian company, which is part of one of Jordan’s largest industry groups, paid for the first deliveries from FLSmidth but the main part of the order was to be financed by a local bank.  However, like so many other banks across the world, the bank turned down applications for new loans at the beginning of the financial crisis. This threatened the construction of the plant and thereby the order of FLSmidth.

    In the spring of 2009 FLSmidth contacted EKF who previously has assisted the company with guarantees for financing solutions.

  • Step 2
    The process

    EKF met with a number of international and local banks who all expressed their interest in taking on the risks of the project provided that EKF would guarantee most of the loans. Through the export lending scheme EKF was also able to offer a loan to the buyer of FLSmidth services.

    EKF quickly endorsed the project and this meant that the project was not abandoned. EKF’s endorsement was conditional to the approval of the risks and terms in the transaction, its environmental impact and the extent of the Danish economic interest in the transaction – aspects which all needed further examination and subsequent negotiation with the parties involved. 

  • Step 3
    The solution

    The final solution came into place in May 2010. Half of the FLSmidth contract was financed with equity from the owners of the cement plant while the other half was financed with loans.

    More than half of the debt financing came from the Danish export lending scheme administered by EKF, while the remainder was provided by a group of local banks. The EKF financing was arranged by HSBC London, who is also acting as agent bank on behalf of EKF.

    EKF’s loan and guarantee meant that the construction of the cement plant in Jordan could go ahead as planned – with substantial deliveries from FLSmidth. The plant is expected to be ready for production start-up at the beginning of 2012.​

  • Risiko i Rusland?
  • ​
Index for robots