THE EXPORT LENDER'S PERSPECTIVE

Generally

Commercial lenders and export-import financing agencies have a common perspective in project financings. Like commercial lenders, export-import financing agencies base credit appraisals on the projected revenues from the operation of the facility, rather than the general assets or the credit of the sponsor of the facility, and rely on the assets of the facility, including the revenue-producing contracts and cash flow, as collateral for the project debt. The credit appraisal of the export-import financing agency making a project finance loan is therefore based on the underlying cash flow from the revenue-producing contracts of the project, independent of the project sponsor's assets.

Unlike a commercial lender, however, the export-import financing agency is a political creature. It is formed to promote trade or other interests of an organizing country and is generally nationalistic in purpose and nationalistic and political in operation. Bureaucracy and budget constraints, like in any governmental agency, affect its efficiency and ability to respond to project financing needs. Funding for bilateral agencies generally comes from their organizing governments.

The OECD consensus

Concessional financing by the world's governments for exports and imports affects competition, manufacturing efficiency, and prices. In recognition of this, the member countries of the Organisation for Economic Co-operation and Development (OECD) signed the “Arrangement on Guidelines for Officially Supported Credits.” It is also called the OECD Consensus.