The US Export-Import Bank will begin offering longer repayment terms and additional flexibilities for most transactions.
The new flexible financing terms and conditions are a result of a modernized agreement with Organization for Economic Cooperation and Development Arrangement Participants.
The modernization agreement will allow ExIm to provide longer repayment terms for most transactions, offer lower risk premium rates for certain borrowers using longer repayment terms, and create further incentives for a wider range of climate friendly and green transactions.
Under the updated Arrangement, ExIm will be able to offer maximum repayment terms up to. 22 years, higher than the previous maximum of 18 years, to an expanded set of technologies offering the greatest climate change mitigation benefit. The Bank also will be able to offer maximum repayment terms up to 22 years for climate change adaptation projects.
Many nuclear energy projects will also be eligible for up to 22-year maximum repayment terms. While necessary for project viability, loans and guarantees of this duration are not always available from private lenders in the commercial market, meaning that ExIm can help foster next-generation low-carbon technologies with these new flexibilities.
The modernized OECD Arrangement also expands the scope of green or climate friendly projects eligible for longer repayment terms under the Climate Change Sector Understanding. The updated climate change mitigation project classes, now include projects related to energy storage, grid efficiency, battery production and recycling, clean hydrogen and ammonia production and storage, low emission manufacturing, zero and low emission transport and clean energy minerals and ores.
In addition to the new flexibilities for climate-positive projects eligible for the CCSU, the agreement also provides more flexible financing terms and conditions for most other projects and sectors. The Bank can offer up to 15-year repayment terms for most types of transactions, up from a previous maximum of 10 years. The agreement also introduces further repayment flexibilities such as longer grace periods and larger balloon payments and will reduce the minimum premium rates for higher credit risk borrowers using longer repayment terms.
The Participants to the Arrangement are the United States, Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Türkiye and the United Kingdom.
Also last week, Exim announced the membership of its 2023-2024 Advisory and Sub-Saharan Africa Advisory Committees.
Former US Senator Heidi Heitkamp will continue to serve as Chair of the Advisory Committee and Jude Kearney, Managing Partner at ASAFO & Co. law firm, will serve as Chair of the Sub-Saharan Africa Advisory Committee.
The Advisory Committee provides guidance to the Bank on its policies and programs as it fulfills its mission to provide competitive financing to support US jobs through exports. The committee includes 17 representatives from a variety of backgrounds ranging from agriculture, environment, production, and commerce to finance, labor, services and the textile industry.
Sub-Saharan Africa Advisory Committee members advise the Bank on the development and implementation of policies and programs designed to support its engagement in sub-Saharan Africa and boost US exports and American jobs. The committee is comprised of 11 members with representation from a variety of fields including trade, commerce, banking, finance and small business.
ExIm also announced the appointment of its newest members to the four subcommittees of the Advisory Committee. The subcommittees are the: Council on Climate, Council on China Competition, Council on Advancing Women in Business and Council on Small Business.
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