What we do

Project Financing Guarantee

EKF offers to insure a significant share of the risk entailed by major ventures abroad to enable them to obtain loans with banks and pave the way for Danish exports.

  • Advantages of Project Financing Guarantee

    Advantages for you as an exporter
    EKF coordinates and participates in financing of the project to facilitate financing for purchasing your products and services.
     
    When EKF assumes part of the project’s risk, banks are more willing to participate in the project, which makes it easier to find financing with an extended credit period.
     
    If the project company does not pay as agreed, EKF covers the loss. You have no financing risks, as you are not a party to the financing. You will also receive your money as soon as you fulfill the order.
    Advantages for you as a buyer of Danish goods
    EKF coordinates and participates in financing of the project so the project can be realised using Danish products and services. When EKF assumes a share of the project’s risk, you will be eligible for the types of loan that ordinary banks are otherwise unwilling to provide.
     
    Based on many years of experience with projects worldwide, EKF is able to offer your company and your project partners valuable advice on financing. This helps create a sound and well-conceived project.
     
    Advantages for you as a bank
    You can participate in financing major projects which you would otherwise have turned away due to the amount involved or the credit period.
  • What is Project Financing Guarantee?

    ​A Project Financing Guarantee is typically called for when a Danish company is contracted for performances to a major, long-term venture abroad such as a cement factory, wind farm or large port terminal.
     
    Projects of this type often entail major risks due to the uncertainties inherent in an extended time frame, the scale of the project or its technologies, together with the prospects for selling the project’s outputs or production.
     
    In most cases, the risk is so high that banks are unwilling to lend money to the project without some degree of security pledge. This is where EKF comes in; we provide that security.
    ​With a Project Financing Guarantee, the banks are assured of recovering their money for the guaranteed share. If something goes wrong, EKF will pay compensation.
     
    With a guarantee as backing, banks are more willing to run the risk of granting large, long-term loans. This is crucial when it comes to projects worth hundreds of millions.
  • How does Project Financing Guarantee work?

    ​EKF issues a guarantee to a Danish bank or a foreign bank to cover the risk of the credit being offered to the project. By doing so, we take over the main part of the risk.
    With financing from the bank and the equity from the sponsors the project can now place an order with your company
  • What does Project Financing Guarantee cost?

    ​The venture company pays a premium for an EKF guarantee. We calculate the premium on the basis of the overall risk of the specific export transaction:

    - Sector
    - The banks involved
    - Guarantee tenor
    - The foreign buyer’s circumstances
    - The political conditions in the country
    - The risk profile for the venture
    - Security package
    - Input and output risk, i.e. sales analysis.
    ​In general, ventures are difficult to compare. They are often complex and involve many different players, sponsors and banks. As such, it is not helpful to attempt to provide price pointers.
     
    Instead, please contact our advisors for assistance.
  • Terms & conditions regarding Project Financing Guarantee

     
    ​Who is eligible for a Project Financing Guarantee?
    Danish exporters who make deliveries to a project abroad. EKF must rate the foreign project as creditworthy before issuing any guarantee.
     
    What is the limit on a Project Financing Guarantee?
    EKF applies no fixed limits to the scale of the project. However, the project must be sufficiently large scale to balance the project’s costs in relation to its value. As a rule of thumb, the amount is usually in the multimillions.
     
    What is the term?
    In principle, EKF offers risk coverage for up to 14 years. However, risk coverage can be extended for up to 18 years for projects involving renewable energy.
     
    Conditions
    EKF requires that the project is based on a solid and well-conceived business plan. The parties to the project must undergo an impartial due diligence process covering the legal, financial and commercial issues before the project owner and the bank can conclude the final loan agreement.
    Requirements
    EKF requires that the project is based on a solid, well thought out business plan. An independent due diligence process is carried out before the project owner and the bank sign the final loan agreement. The due diligence process includes legal, financial, commercial aspects as well as environmental and human rights aspects.

    What does EKF cover?

    A Project Financing Guarantee covers non-payment in default of the loan agreement. EKF pays out compensation to the bank in the event that problems arise with the project abroad as a result of commercial, political and documentation risks.
     
    Commercial risk occurs when the venture company is unable to pay due to liquidation, insolvency, cancellation of the contract or because the project is unwilling to pay.
     
    Political risk occurs when the exporter does not receive payment for the 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 typically covers between 30% and 80% of the risk on the loan granted by the bank. This means that the project’s bank will be liable for at least 20% of the risk. For climate project financing, EKF covers up to 100%.

Advantages of Project Financing Guarantee

Advantages for you as an exporter
EKF coordinates and participates in financing of the project to facilitate financing for purchasing your products and services.
 
When EKF assumes part of the project’s risk, banks are more willing to participate in the project, which makes it easier to find financing with an extended credit period.
 
If the project company does not pay as agreed, EKF covers the loss. You have no financing risks, as you are not a party to the financing. You will also receive your money as soon as you fulfill the order.
Advantages for you as a buyer of Danish goods
EKF coordinates and participates in financing of the project so the project can be realised using Danish products and services. When EKF assumes a share of the project’s risk, you will be eligible for the types of loan that ordinary banks are otherwise unwilling to provide.
 
Based on many years of experience with projects worldwide, EKF is able to offer your company and your project partners valuable advice on financing. This helps create a sound and well-conceived project.
 
Advantages for you as a bank
You can participate in financing major projects which you would otherwise have turned away due to the amount involved or the credit period.

What is Project Financing Guarantee?

​A Project Financing Guarantee is typically called for when a Danish company is contracted for performances to a major, long-term venture abroad such as a cement factory, wind farm or large port terminal.
 
Projects of this type often entail major risks due to the uncertainties inherent in an extended time frame, the scale of the project or its technologies, together with the prospects for selling the project’s outputs or production.
 
In most cases, the risk is so high that banks are unwilling to lend money to the project without some degree of security pledge. This is where EKF comes in; we provide that security.
​With a Project Financing Guarantee, the banks are assured of recovering their money for the guaranteed share. If something goes wrong, EKF will pay compensation.
 
With a guarantee as backing, banks are more willing to run the risk of granting large, long-term loans. This is crucial when it comes to projects worth hundreds of millions.

How does Project Financing Guarantee work?

​EKF issues a guarantee to a Danish bank or a foreign bank to cover the risk of the credit being offered to the project. By doing so, we take over the main part of the risk.
With financing from the bank and the equity from the sponsors the project can now place an order with your company

What does Project Financing Guarantee cost?

​The venture company pays a premium for an EKF guarantee. We calculate the premium on the basis of the overall risk of the specific export transaction:

- Sector
- The banks involved
- Guarantee tenor
- The foreign buyer’s circumstances
- The political conditions in the country
- The risk profile for the venture
- Security package
- Input and output risk, i.e. sales analysis.
​In general, ventures are difficult to compare. They are often complex and involve many different players, sponsors and banks. As such, it is not helpful to attempt to provide price pointers.
 
Instead, please contact our advisors for assistance.

Terms & conditions regarding Project Financing Guarantee

 
​Who is eligible for a Project Financing Guarantee?
Danish exporters who make deliveries to a project abroad. EKF must rate the foreign project as creditworthy before issuing any guarantee.
 
What is the limit on a Project Financing Guarantee?
EKF applies no fixed limits to the scale of the project. However, the project must be sufficiently large scale to balance the project’s costs in relation to its value. As a rule of thumb, the amount is usually in the multimillions.
 
What is the term?
In principle, EKF offers risk coverage for up to 14 years. However, risk coverage can be extended for up to 18 years for projects involving renewable energy.
 
Conditions
EKF requires that the project is based on a solid and well-conceived business plan. The parties to the project must undergo an impartial due diligence process covering the legal, financial and commercial issues before the project owner and the bank can conclude the final loan agreement.
Requirements
EKF requires that the project is based on a solid, well thought out business plan. An independent due diligence process is carried out before the project owner and the bank sign the final loan agreement. The due diligence process includes legal, financial, commercial aspects as well as environmental and human rights aspects.

What does EKF cover?

A Project Financing Guarantee covers non-payment in default of the loan agreement. EKF pays out compensation to the bank in the event that problems arise with the project abroad as a result of commercial, political and documentation risks.
 
Commercial risk occurs when the venture company is unable to pay due to liquidation, insolvency, cancellation of the contract or because the project is unwilling to pay.
 
Political risk occurs when the exporter does not receive payment for the 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 typically covers between 30% and 80% of the risk on the loan granted by the bank. This means that the project’s bank will be liable for at least 20% of the risk. For climate project financing, EKF covers up to 100%.
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