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Guarantee provides security for large receivables account

Danfoss Solutions guarantees utility cost savings at a paper plant in Mexico. EKF guarantees the client's payments to Danfoss Solutions.
Danfoss Solutions sells utility cost-savings project to paper plant in Mexico
How much
USD 4.4 million
EKF's role
EKF guarantees 85 per cent of Danfoss Solutions' receivables from the client
EKF product
EKF cleantech guarantee
  • Quote

    The guarantee from EKF was a decisive factor in our capacity to sign a deal with our Mexican client

    Helle Sørensen, Manager of Finance and Administration, Danfoss Solutions

    Danfoss Solutions has specialised in energy-saving solutions for manufacturing firms. Under its performance guarantee, Danfoss Solutions refunds clients if the savings are not realised.

    The challenge for the Danish firm is that the customer is not required to pay until the savings are realised. In this way, Danfoss Solutions runs a high risk of non-payment.

    In early 2010, Danfoss Solutions sold a utility cost saving project to a Mexican paper plant worth a total of USD 4.4 million.

    The project promises large-scale utility cost savings and comprises hardware, software and training, including a utility management system with consumption metering. The large order value made it necessary to guarantee the firm's debts.

  • ​​Danfoss Solutions were regularly in touch with EKF to hear more about the options for guarantees for its energy-saving projects.

    This led to the development of a new form of contract and project delivery guarantee for cleantech purposes. The project in Mexico is the first where the EKF cleantech product has been used.
    "Negotiations with EKF were fast and efficient, and the focus was on the special factors entailed by the energy contract with our client.

    The guarantee is tailored, making it an exclusive agreement between EKF and Danfoss Solutions", says Helle Sørensen, Manager of Finance and Administration, Danfoss Solutions. 
  • ​EKF offered to guarantee the client's payments to Danfoss Solutions. The maximum receivable from the client was calculated as USD 2.3 million, of which EKF covers 85 per cent.

    The guarantee runs for 2½ years, during which Danfoss Solutions can adjust its guarantee requirement annually.
    ​"A guarantee of this type is flexible in that our premium payment to EKF can be adjusted to our needs," says Helle Sørensen.
    For Danfoss Solutions, the new cleantech guarantee means that the firm benefits from enhanced potential for exporting solutions to a number of countries worldwide.
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