Ex-Im Bank offers benefits to exporters of U.S. renewable energy

By Erin Voegele | May 04, 2011

Attendees at the 2011 International Biomass Conference & Expo in St. Louis had the opportunity to learn about the benefits of working with the Export-Import Bank of the United States to serve markets abroad. The Ex-Im Bank is a government agency that finances exports. “Our job is to get U.S. companies to provide more employment,” said Ex-Im Bank Senior Business Development Officer Hannelene Beillard. “If you are a U.S. company and you are creating any kind of product in the U.S., or you are providing services, we can help you finance so you can export.”

During her keynote presentation, Beillard described how attendees could develop an idea into a bankable project. “You have a great idea or innovation, and now you are looking for somebody to help you finance it so you can commercialize,” she said, noting that there is more to bankability than a great idea. The first step is to find an equity investor to finance a pilot- or demonstration-scale facility. Once companies have a test facility up and running, they often start to look for a loan. “Well, you’re still not quite there because most banks will ask if your technology is commercial,” said Beillard. “At that point you are still looking for equity.”

Belliard also outlined the considerations a company needs to make before contacting their banker. “You’re project should have a feedstock supplier if you are building a large project,” she said. “Know where your feedstock is going to come from and know how long that contract is for. If you are asking me for a 15-year loan, don’t have a10-year feedstock supplier. There should be a buyer, potentially another long-term contract.” For example, a company that is producing renewable electricity should have a power purchase agreement. “If you can get yourself a power-purchase agreement for the life of the loan you are seeking—sometimes even longer—it lowers the risk for the bank, and it lowers the risk for you.” According to Belliard, it is also important to have the correct management team on board. “You should hire people who are extremely experienced in running this business,” she said. “Oftentimes the people who are fantastic at innovating and developing the idea are not the same people you want operating the business on a day-to-day level.”

In addition, Belliard offered attendees some advice on how to achieve success when working with a bank. “Know your market before you go in to talk to your banker; know what the competition is doing, and know what you can bring that nobody else can do,” she said. It is also imperative that a company teach its banker about its company and technology. “Be willing to spend some time making people understand what it is you are trying to do,” Belliard continued, noting that you should work to make your banking professional you ally. Most importantly, she said, don’t try to trick your bank. “They may not understand your technology, but bankers can sniff out a problem,” Belliard said. “I promise you they can, so don’t try to trick them. Be honest. If you are having a problem, hopefully you’ve made enough friends and allies at your bank that they can try to help you.”

Belliard also described some of the requirements that must be met to work with Ex-Im Bank. “We must be open to the buyer’s host country,” she said. There also has to be significant U.S. content involved. “If you are talking about short-term loans, we’re asking you for 51 percent U.S. content,” she continued. “If you are talking about longer-term loans, we don’t ask for a minimum. However, we can only finance your U.S. content.”

There are several products that Ex-Im Bank can offer to either U.S. exporters, or those importing U.S. products. On the exporter side, insurance and working capital loans are available. Alternatively, importers of U.S. products may qualify for either a guaranteed loan or a direct line. “The way this works is the buyer actually becomes the borrower and we work with the bank or they can work with us directly,” Belliard said. The importer has to pay the U.S. exporter a 15 percent upfront cash payment. “At that point we finance the rest of the money to pay you, so you are pretty much assured that you will get paid because the full faith and credit of the U.S. government is behind the buyer’s loan.”