Export Finance and Insurance Corporation (EFIC), the Australian government’s export credit agency, recently endorsed a framework financing agreement with members of the Asian Exim Banks Forum.
The endorsement was signed at the 16th Annual Meeting of the Forum in Busan, Korea, by EFIC and the Exim Banks of China, India, Indonesia, Japan, Korea, Malaysia, the Philippines and Thailand.
The agreement forms the basis for Exim Banks to jointly finance large projects, which are beyond the capacity of commercial lenders or a single Exim Bank. With international projects and contracts increasingly involving multi-sourcing (using suppliers from several countries), the agreement will help these agencies to work together to support exporters from member countries.
“Risk-sharing arrangements can benefit exporters, overseas buyers, project sponsors and the Exim Banks,” said EFIC’s Head of Product Management and Risk Transfer, Chang Foo.
“For an Australian company, it creates a one-stop shop for financing when they’re sub-contracting to an Asian firm or using Asian suppliers: only one set of documents needs to be negotiated with the agency providing the loan, which then enters separate risk-sharing arrangements with other members. Starting from a framework agreement also means negotiations between member agencies will be quicker and easier. And risk-sharing can free up an agency’s capacity to support more exports.”
Established in 1995, the Asian EXIM Banks Forum is a group of export of credit agencies representing nine countries in the Asian region. The purpose of the Forum is to enhance cooperation and forge stronger relationships among members in order to promote global trade and investment.
The Forum members are EFIC, Export-Import Bank of China, Export-Import Bank of India, Indonesia Eximbank, Japan Bank for International Cooperation, The Export-Import Bank of Korea, Export-Import Bank of Malaysia, Philippine Export-Import Credit Agency and Export-Import Bank of Thailand. The Asian Development Bank is a permanent observer of the Forum.
Export Finance and Insurance Corporation
Ph: 02 9201 2276