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Danish know-how sells in Bulgaria

The Danish company EnergiMidt exported energy efficiency know-how to a Bulgarian mineral extracting and processing company and thereby opened the doors for equipment supplier Aalborg Industries. EKF helped the project on its way with a supplier credit guarantee.
EnergiMidt supplied know-how on energy efficiency to the mineral extracting and processing company Kaolin in Bulgaria.
How much
EnergiMidt obtained a million-kroner contract.
EKF's role
EKF guarantees 90 per cent of the payments from Kaolin.
EKF product
Supplier Credit Guarantee
  • Quote

    It is unlikely that the project would have succeeded without the financing from EKF and our bank Nordea. That was a very important factor.

    Mads Dalgaard Miltersen, CFO of EnergiMidt
    ​In 2011 EnergiMidt participated in an export promotion campaign on energy efficiency in Bulgaria and obtained an order for consulting services and advice to the international listed mineral extracting and processing company Kaolin.

    EnergiMidt was hired to scrutinise Kaolin´s processes and while doing so they also managed to include a new boiler from Aalborg Industries into the project. The overall contract thus turned out to be a million-kroner deal.

    Kaolin entered into an agreement with EnergiMidt covering the entire project, which included the boiler, the appurtenant project management and consulting services regarding energy efficiency for a period of three years. Even though Kaolin is a big profit-making company with a decent equity, the buyer wished to be granted credit.

    ”We had to offer the buyer a financing model which placed a risk on EnergiMidt as we might not be paid for the project in Bulgaria, a risk that we wanted to minimise,” says Mads Dalgaard Miltersen, CFO of EnergiMidt.
  • ​​EnergiMidt contacted EKF and inquired about the possibilities of securing the payments from the Bulgarian buyer.
    “We have previously worked with Danida (Danish development assistance) in connection with development projects but the project in Bulgaria was our first purely commercial project involving consulting services, project management and supply of boiler which focused on establishing a good business of benefit to all parties” says Mads Dalgaard Miltersen.
    ​EnergiMidt entered into a dialogue with EKF in search of a financing solution which would allow EnergiMidt to assume the responsibility for the entire order.
    ”EKF helped us a lot by putting together the right financing model which made it possible for us to finance the entire export transaction through our bank Nordea without being forced to take money out of the pocket during the credit period”, says Mads Dalgaard Miltersen.
  • ​​In EKF´s assessment, a so-called supplier credit guarantee was the best solution. A supplier credit guarantee means that EnergiMidt takes out insurance with EKF and in return they receive a guarantee for the credit to Kaolin. If the buyer does not pay as agreed, EKF will pay up to 90 per cent of the receivable.
    EnergiMidt forwarded annual reports from the buyer and soon received a commitment from EKF regarding the guarantee which made sure that Nordea obtained security for its financing.
    ​“Our project in Bulgaria is an example of how an export promotion campaign may develop into an export adventure for clusters of Danish companies in partnership with EKF and banks. It is a great door opener to be able to bring financing to Bulgaria the way we did”, says CFO of EnergiMidt, Mads Dalgaard Miltersen, who adds,
    “We expect to get several more projects like these where we can make use of the financing model which we developed together with EKF and Nordea. It underlines the Danish strength within energy efficiency when we are able to offer a combination of know-how, equipment and financing in one overall package solution”.
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