Recently, the Danish engineering company FLSmidth was able to announce a billion kroner order to Kaluzhsky Cement Plant in Russia. FLSmidth will supply equipment, supervision and training to the plant, which will become the largest in Russia with more than 1,000 employees and an annual capacity of more than three billion tonnes of cement.
EKF has played a significant role in connection with the closing of this order. Not only has EKF provided a guarantee for the project, it has also actively helped to secure the financing for the cement plant. EKF has done this by offering an export credit guarantee and an export loan worth approximately DKK 1.1 billion to the Russian state bank Vnesheconombank in association with the leading international bank HSBC, who performed a structuring role for the financing.
”EKF and FLSmidth have enjoyed a close and well-established partnership for a long time and this order is a case in point. Securing financing for large, international export transactions can be a challenging process, especially at a time marked by unstable economic markets, but we have again managed to bring a deal to successful close.
At EKF we are glad that we can help to bring home an important order and in this way help to secure growth and jobs for Denmark and Danish companies,” says EKF’s CEO Anette Eberhard.
Export loan also benefits sub-suppliers
The Russian order is equivalent to revenue and jobs for both FLSmidth and a number of Danish sub-suppliers. A successful implementation of the cement plant project is obviously of great value to Denmark.
EKF and thereby the Danish government have offered an export loan worth DKK 1.1 billion for the project. The export loan means that the Danish government provides funding for loans which allow the foreign buyers to purchase goods from Danish export companies. This way, the export loan represents an alternative to bank funding for the foreign clients of Danish exporters.
”The Russian cement project proves that an export loan is a useful tool for generating growth. We believe that the scheme holds significant potential,” says EKF´s CEO Anette Eberhard.
The export lending scheme was established in 2009 and is administered by EKF on behalf of the Danish government. The Danish government has earmarked a total of DKK 20 billion for the scheme.