Ex-Im Bank Renews $100 Million Africa Insurance Initiative
April 27, 2012
(Ex-Im Bank)
Ex-Im Bank Renews $100 Million Africa Insurance Initiative
Cover Policy Expansions Coming in Three African Countries
Washington, D.C. – The Export-Import Bank of the United States (Ex-Im Bank)
today announced a three-year renewal of the Bank's Short-Term Africa Initiative
(STAI) that provides export-credit insurance for U.S. exporters selling to 18
countries in sub-Saharan Africa, up to a program limit of $100 million. The
initiative is renewed through March 31, 2015.
The Bank also anticipates expanding the availability of its export financing in
three sub-Saharan African countries: Cameroon, Ethiopia and Tanzania. Ex-Im
Bank's board of directors is expected to authorize cover-policy expansions for
each respective country in May. The changes will be made possible by
risk-assessment upgrades that were recently approved through a federal
interagency review.
"Sub-Saharan Africa offers great, untapped potential for U.S. companies looking
to grow by increasing their foreign sales. Through Ex-Im's initiative, the U.S.
government is opening markets throughout this region," said Ex-Im Bank Chairman
and President Fred P. Hochberg. "We encourage more exporters to enter these
markets now to establish a presence that can lead to follow-on business for
years to come."
Hochberg added that the financing risks of many sub-Saharan markets have
improved significantly and are lower than commonly perceived. He noted that the
Bank has had an excellent experience of repayment in these markets in recent
years.
"Since 2002, Ex-Im Bank has authorized $4 billion to support U.S. exports to
sub-Saharan Africa, and we've netted more than $150 million in fees," Chairman
Hochberg said. "Ex-Im's net loss rate in the region is 2 percent, with our fees
earning 2.5 times more than the claims we've received. This is a very solid
repayment record. We want more U.S. exporters to initiate or expand their
business in Africa."
In FY 2011, Ex-Im Bank surpassed the $1 billion authorizations mark for the
first time in sub-Saharan Africa, with almost $1.4 billion approved to support
U.S. exports to the region. The Bank anticipates another strong authorizations
year in FY 2012.
Under STAI, Ex-Im Bank provides support for short-term transactions (repayment
terms of up to 180 days, exceptionally up to 360 days) in markets where coverage
would not be available under the Bank's standard cover policy, which is normally
based upon credit-risk analysis for medium-term transactions (repayment terms up
to seven years). Currently, Ex-Im's insurance on all short-term STAI country
transactions is available only under the Bank's single-buyer insurance policy,
which is a select-risk authorization. Existing Ex-Im multibuyer policyholders
with a diverse spread of country and buyer risk are also eligible but must
submit separate single-buyer policy applications for each STAI country buyer.
However, under the initiative's renewal, exporters having favorable experience
with highly creditworthy STAI country buyers may have these buyers endorsed to
their multibuyer policy.
Ex-Im Bank is an independent federal agency that helps create and maintain U.S.
jobs by filling gaps in private export financing at no cost to American
taxpayers. In the past five years, Ex-Im Bank has earned for U.S. taxpayers $1.9
billion above the cost of operations. The Bank provides a variety of financing
mechanisms, including working capital guarantees, export-credit insurance and
financing to help foreign buyers purchase U.S. goods and services.
Welcome to the Exporting Source
Your one-stop resource for finding help to export to new customers, to learn about government export programs, to join export-promoting trade missions, to sign up for trade conferences and training, and to link to other exporting services. Whether you're an old hand at exporting or just getting started, the Exporting Source provides a place to locate foreign customers, export financing and foreign investment assistance.