Rob Guthrie, Business Initiatives Specialist Office of Renewable Energy & Environmental Exports

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1 Fnancng Solar Energy Exports Rob Guthre, Busness Intatves Specalst Offce of Renewable Energy & Envronmental Exports

2 Export-Import Bank of the U.S. Independent, self-fundng fundng agency of the U.S. government snce 1934; proftable the past few years. Fnances export sales of U.S.-made goods and servces. Provdes: 1) Loan Guarantees 2) Export Credt Insurance 3) Workng Captal Guarantees 4) Drect Loans 5) Mantans a Ted Ad Captal Projects Fund

3 Elgblty Crtera U.S. Content Short-term transactons: 51% mnmum Medum/long-term transactons: only U.S. content, up to 85% No Defense Artcles Exceptons may be made for humantaran purposes, drug nterdcton, dual-use tems Country Elgblty Support avalable n over 155 countres Restrctons may apply for poltcal or economc reasons Refer to the Country Lmtaton Schedule (CLS) at on the homepage under Shortcuts

4 Envronmental Exports Program Created n 1994 In FY 2008, supported $434.2 mllon exports of envronmentally benefcal goods and servces Created the Offce of Renewable Energy & Envronmental Exports n 2008

5 Envronmental Exports Program Enhancements: 1) Terms of up to 18 years for renewable energy and water treatment projects 2) Up to 30% local cost support wthn the U.S. scope of supply 3) Captalzaton of nterest durng constructon 4) Grace perods of up to 18 months

6 Export Credt Insurance Enables U.S. exporters to offer short- and medum-term credt drectly to ther customers Credt nsurance s an attractve substtute to cash-n n-advance, letters of credt, and local bank fnancng Usng Ex-Im Bank to nsure a letter of credt nstead of payng bank confrmaton charges s usually more cost effectve

7 Case Study: Sunwze Sunwze Technologes Inc. s usng Ex-Im Bank s Short- Term Insurance to offer open account credt to customers worldwde Sunwze exports both modules and turnkey solar power systems Ex-Im Bank Insurance s supportng ther growth n exports, as fnancng to overseas dealers enables them to fnance ther customers and projects

8 Case Study: Sunwze Wreless Energy Chle has a $300,000, 180-day credt lne from Sunwze to fnance ther expandng operatons, and to provde fnancng to ther customers Cost to Wreless Energy Chle for 180-day terms: 1.15% Suppler credt s an attractve substtute to usng L/Cs Increases order quanttes to exstng customers & dstrbutors

9 Case Study: Sunwze Fnancng Alternatves: Cash n advance: may be too expensve Foregn letters of credt carry nterest rates of 10 25% per annum: much less affordable Prvate-sector nsurance: t s avalable, but t s typcally much more expensve; does not cater to small busnesses

10 Key To Remember: Fnancng s often THE crtcal factor n wnnng an export sale n emergng markets: Suppler credt s an attractve substtute to usng L/C s; nterest rates are very hgh n many nternatonal markets Credt terms often leads to ncreased order quanttes to exstng customers/dstrbutors Helps exporters to enter new rsky markets, attract new customers/dstrbutors

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12 Guarantee Program Guaranteed Loans made by commercal banks (U.S. or foregn) to a foregn buyer wth a 100% uncondtonal repayment guarantee from Ex-Im Bank Guarantee covers 85% of the U.S. content of the transacton Negotated nterest rates, usually a floatng rate based on spread over 6-month 6 U.S. dollar LIBOR rate Banks may fnance the 15% requred cash payment Guarantee avalable n major foregn currences

13 Case Study: Bo-Mcrobcs, Inc. Case Study: Bo-Mcrobcs, Inc. Bo-Mcrobcs Inc., of Shawnee Msson, Kansas, a small busness, s exportng 10 of ts FAST wastewater treatment systems and related equpment. The company benefts from a 10-year, $824,000 Ex-Im Bank 100% loan guarantee. COFINE, S.A. n Monterey, Mexco, was the guaranteed lender. The transacton receved longer than normal repayment terms under Ex-Im Bank's Envronmental Exports Program.

14 Case Study: Naco Nogales Case Study: Naco Nogales Ex-Im Bank provded a $91.3 mllon Loan Guarantee to Ctbank to fnance the development and constructon of the 306MW gas-fred combned cycle power plant located near Agua Preta.

15 Case Study: Naco Nogales Case Study: Naco Nogales Project qualfed for Ex-Im Bank Envronmental Exports Program : 1) Maxmum OECD repayment of 14 years; 15-year, 8-month total term 2) Captalzed nterest durng constructon of $2.5 mllon 3) Supported an addtonal 15% local cost or $13.7 mllon 4) Fnancng ncluded a sewage treatment plant to supply water for project use wth a return of treated water to the Agua Preta Rver.

16 Case Study: Naco Nogales Case Study: Naco Nogales Project has a 25-year power purchase agreement from CFE for 258 mw, 48 mw 3 rd party sales; 25-year fuel supply contract wth El Paso Merchant Energy Project conssts of one Semens-Westnghouse model 501G gas turbne generator set, and a waste heat recovery system Strong project sponsor n Unon Fenosa: Total Project cost = $210 mllon, hgh equty contrbuton; Ex-Im Bank s s loan guarantee was the sole source of senor debt

17 Drect Loan Program Drect Loans are made by Ex-Im Bank to a foregn buyer Current nterest rate for year Drect Loan 4.86% Ex-Im Bank requres the buyer to make a cash payment to the exporter equal to at least 15% of the U.S. supply contract 15% cash payment may be borrowed from ether a lender or the exporter, or be from the buyer s s own funds

18 What Can Ex-Im Do for Small Projects? Ex-Im Bank can make a credt decson about a potental project n one of three ways: 1) Based strctly on the balance sheet of the borrower or a guarantor 2) As lmted recourse project fnance wth a specal purpose company borrower and project cash flows as the source of repayment 3) Or, as a structured fnance transacton wth the borrower s s balance sheet enhanced by specal features

19 What Can Ex-Im Do for Small Projects? Many projects are too large to be feasble strctly on a balance sheet but too small to mert the tme and expense assocated wth project fnance transactons; Structured fnance may be an alternatve:

20 Case Study: Gochang Solar - Korea Case Study: Gochang Solar - Korea Ex-Im Bank used the structured fnance approach to create a reasonable assurance of repayment and support the project. No outsde fnancal advsors, lmted legal fees Structure of the deal ncluded: 1) 15-year guaranteed tarff rate for power sales 2) Mortgage on the solar panels 3) Debt servce reserve account

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22 Case Study: GE Wnd Case Study: GE Wnd GE Wnd Energy, LLC used Ex-Im Bank s s new 10-year Insurance product to offer a 10-year repayment term to fnance the $820,000 sale of a sngle 1.5MW wnd turbne. The project replaces a smaller wnd turbne for Apasco Cement, S.A. of Ramos Arzpe, Mexco, who wll use the wnd turbne to power a conveyer belt and provde power to ther faclty.

23 Case Study: GE Wnd Case Study: GE Wnd The Insurance s desgned to be a streamlned approach, requrng less documentaton, to provde long-term fnancng for smaller envronmental transactons.

24 Workng Captal Guarantee Ex-Im Bank provdes 90% repayment guarantee for workng captal loans -- revolvng or transacton-based -- made by commercal lenders to U.S. companes to fnance foregn purchase orders. Enables exporters to fnance materals, labor, and overhead to produce goods/servces for export. Requres 100% collateralzaton. May be used to cover stand-by letters of credt for bd and performance bonds: 10% collateral.

25 Expand Your Borrowng Base!

26 Case Study: Unted Solar Ovonc In Feb. 2008, Ex-Im Bank guaranteed a $25 mllon revolvng credt workng captal lne for Unted Solar Ovonc of Auburn Hlls, MI. The credt was guaranteed under Ex-Im Bank s 'Fast Track' Workng Captal Guarantee Program that helps small and medum-szed busnesses obtan larger workng captal loans n less tme.

27 Case Study: Unted Solar Ovonc Experenced lenders -- JP Morgan Chase Bank, n ths case -- that qualfy for the program can provde up to $25 mllon per borrower n Ex-Im Bank-guaranteed fnancng. "Our ablty to access a lne of credt of ths sze, based on export-elgble elgble recevables and nventory, s tremendously helpful. The reduced amount of tme nvolved enables us to move quckly to expand our export sales." - Sanjeev Kumar, Vce Presdent & CFO

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29 Concluson Ex-Im Bank: renewable energy & envronmental exports are top prorty Ex-Im Bank s nterested n projects of ANY SIZE Ex-Im Bank supports short, medum, and long-term fnancng to credtworthy nternatonal customers, and U.S. borrowers of workng captal We wll work wth you to create bankable projects

30 Concluson We welcome your projects and your deas! (Newport Beach) (San Dego) Internet :