Funding

Funding helps companies realise sound export transactions, which banks are unable to extend loans to due to the financial crisis.

  • Advantages of Funding

    Advantages for you as an exporter
    Funding provides financing options for major, long-term projects. Without financing, these projects, and hence sales, would probably come to nothing.

    As the exporter, you have no financing risks, as you are not a party to the financing.
    Advantages for you as a buyer of Danish goods
    With EKF involved as a source of financing, you have new options. This helps ensure an efficient and flexible capital market.

    The loan is an attractive financing option and can be issued in several different currencies.
  • What is Funding?

    ​Projects looking for loans worth hundreds of millions with a long period have problems finding a lender, as only a small number of banks worldwide are able to provide amounts of this magnitude over an extended number of years.

    This situation is compounded by the banks’ reluctance to grant loans and, as a result, Danish companies face empty order books.
     
    Export Loans and loans from institutional investors were created to assist companies who were having trouble securing financing because the financial crisis had curtailed the banks’ ability and willingness to grant loans.
    With an Export Loan or funding from an institutional investor, projects can secure an attractive loan.

    The loan must be used for realising million-figure orders with Danish companies.
     
    Ultimately the aim is to enable major, long-term ventures such as wind farms, cement factories and energy plants to create growth and jobs in Denmark.
  • How does Funding work?

    EKF issues a guarantee to a pension fund. Then EKF assumes the risk. The pension fund provides funding to a large scale project abroad. Usually, one or more banks provide funding as well to the project. The project purchases goods and services from a Danish export company.

     

    ​In case of using an Export Loan, there is no institutional investor involved in the financing. Instead, EKF provides funding straight to the project. 
  • What does Funding cost?

    The borrower pays interest 
     
    The interest rate is set individually based on:
     - The loan period
     - The loan amount
     - The loan currency
    EKF offers an Export Loan at a variable or fixed interest rate. Interest rates and the terms of EKF guarantees are based on market terms and determined on a case-by-case basis. The basic rate is fixed-interest Danish government bonds.
    On top of that comes the cost of conversion to the preferred currency and the fee for loan administration.
  • Terms & conditions regarding Funding

    Who is eligible for funding?
    Companies within all sectors and of all sizes are eligible.
    EKF must rate the foreign project as creditworthy before issuing a loan.
     
    What is the limit on funding?
    There is no ceiling on the loan. However, some banks may decline to grant a loan if the principal is very small, as the administrative burden of dealing with the loan may be disproportionately large.
     
    What is the term?
    An Export Loan is subject to a credit period of 2-15 years. However, the loan may be extended for a period of up to 18 years in the case of renewable energy and water supply projects.
     
    Conditions
    EKF facilitates the Export Loan through a bank, and the loan is based on the bank’s lending terms.
    In order to minimise the risk, EKF requires an export credit guarantee to be established with the loan.
    What does EKF cover?
    EKF will pay compensation if the bank makes a loss on an export transaction or investment abroad as a result of commercial or political risks.
     
    Commercial risk occurs when the buyer is unable to pay due to liquidation or insolvency for example.
     
    Political risk occurs in case of non-payment for products due to impediments in the foreign country. Such impediments include war or civil war, currency shortage, restrictions on use of currency, import or export bans, and interventions by local authorities that make it impossible to receive payment for the products.
     
    EKF covers up to 95% of the commercial and political risks, so the bank’s deductible is a minimum of 5% of the commercial and political risks.

Advantages of Funding

Advantages for you as an exporter
Funding provides financing options for major, long-term projects. Without financing, these projects, and hence sales, would probably come to nothing.

As the exporter, you have no financing risks, as you are not a party to the financing.
Advantages for you as a buyer of Danish goods
With EKF involved as a source of financing, you have new options. This helps ensure an efficient and flexible capital market.

The loan is an attractive financing option and can be issued in several different currencies.

What is Funding?

​Projects looking for loans worth hundreds of millions with a long period have problems finding a lender, as only a small number of banks worldwide are able to provide amounts of this magnitude over an extended number of years.

This situation is compounded by the banks’ reluctance to grant loans and, as a result, Danish companies face empty order books.
 
Export Loans and loans from institutional investors were created to assist companies who were having trouble securing financing because the financial crisis had curtailed the banks’ ability and willingness to grant loans.
With an Export Loan or funding from an institutional investor, projects can secure an attractive loan.

The loan must be used for realising million-figure orders with Danish companies.
 
Ultimately the aim is to enable major, long-term ventures such as wind farms, cement factories and energy plants to create growth and jobs in Denmark.

How does Funding work?

EKF issues a guarantee to a pension fund. Then EKF assumes the risk. The pension fund provides funding to a large scale project abroad. Usually, one or more banks provide funding as well to the project. The project purchases goods and services from a Danish export company.

 

​In case of using an Export Loan, there is no institutional investor involved in the financing. Instead, EKF provides funding straight to the project. 

What does Funding cost?

The borrower pays interest 
 
The interest rate is set individually based on:
 - The loan period
 - The loan amount
 - The loan currency
EKF offers an Export Loan at a variable or fixed interest rate. Interest rates and the terms of EKF guarantees are based on market terms and determined on a case-by-case basis. The basic rate is fixed-interest Danish government bonds.
On top of that comes the cost of conversion to the preferred currency and the fee for loan administration.

Terms & conditions regarding Funding

Who is eligible for funding?
Companies within all sectors and of all sizes are eligible.
EKF must rate the foreign project as creditworthy before issuing a loan.
 
What is the limit on funding?
There is no ceiling on the loan. However, some banks may decline to grant a loan if the principal is very small, as the administrative burden of dealing with the loan may be disproportionately large.
 
What is the term?
An Export Loan is subject to a credit period of 2-15 years. However, the loan may be extended for a period of up to 18 years in the case of renewable energy and water supply projects.
 
Conditions
EKF facilitates the Export Loan through a bank, and the loan is based on the bank’s lending terms.
In order to minimise the risk, EKF requires an export credit guarantee to be established with the loan.
What does EKF cover?
EKF will pay compensation if the bank makes a loss on an export transaction or investment abroad as a result of commercial or political risks.
 
Commercial risk occurs when the buyer is unable to pay due to liquidation or insolvency for example.
 
Political risk occurs in case of non-payment for products due to impediments in the foreign country. Such impediments include war or civil war, currency shortage, restrictions on use of currency, import or export bans, and interventions by local authorities that make it impossible to receive payment for the products.
 
EKF covers up to 95% of the commercial and political risks, so the bank’s deductible is a minimum of 5% of the commercial and political risks.
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