ABSTRACT
The value of export credit agency (ECA) support in international project finance soared in the mid-1990s with the rapid growth of private power investments (IPPs) in the emerging markets. The range of tools ECAs can bring to bear in project finance transactions includes political risk insurance (PRI), guarantees for commercial debt, and direct lending. Using these financial instruments, ECAs provide both political risk and commercial credit risk coverage that mobilizes commercial bank capacity in many markets. The industry sectors most benefitted by these instruments include those with the largest capital requirements: LNG, telecoms, petrochemicals, mining and power. This chapter focuses on Euler Hermes which is the export credit agency in Germany, and manages the export credit guarantee scheme on behalf of the German government. The Export Credits Guarantee Department (ECGD), the UKs export credit agency is a government department that operates under an act of Parliament, in accordance with financial objectives set by HM Treasury.
