annual report 2015, export credit guarantees of the ... · annual report 2015, export credit...
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annual report 2015
ann
ual
rep
ort
exp
ort
cre
dit
gu
aran
tees
of
the
fed
eral
rep
ubl
ic o
f g
erm
any2015
Including Untied Loan
Guarantees
head office
Euler Hermes Aktiengesellschaft
Gasstraße 27
22761 Hamburg
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
department berlin
Friedrichstadt-Passagen
Quartier 205
Friedrichstraße 69
10117 Berlin
Phone: +49 (0)30 / 20 94 - 53 10
Fax: +49 (0)30 / 20 94 - 53 20
branch offices
10117 Berlin
Friedrichstraße 69
60596 Frankfurt
Theodor-Stern-Kai 1
Etage 8 Bauteil A
22761 Hamburg
Gasstraße 27
50672 Köln
Hohenzollernring 31-35
81373 München
Radlkoferstraße 2
70597 Stuttgart
Löffelstraße 44
Export Credit Guarantees of the Federal Republic of Germany
For all branch offices:
Phone: +49 (0) 40/ 88 34-90 00
Fax: +49 (0) 40/ 88 34-9141
<<< please turn overleaf for definitions and explanations
www.agaportal.de
Euler Hermes AktiengesellschaftExport Credit Guarantees of the Federal Republic of Germany
Postal address
22746 Hamburg, Germany
Office address
Gasstraße 27
22761 Hamburg, Germany
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
Branch offices: Berlin, Frankfurt,
Hamburg, Cologne, Munich, Stuttgart
09
23
06
05
16
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 1
definitions and explanations
Arrangement (OECD Consensus):The Arrangement is a "Gentlemen’s Agreement" between theOECD members which lays down certain minimum and maxi-mum terms permissible for officially supported export creditswith a maturity of more than 2 years. The Arrangment aims atcreating a level playing field for the exporters and avoidingfinancing competition which would place an unnecessary burden on national budgets.
Ceiling:For countries where cover facilities have been restricted forrisk management reasons, an amount of cover is fixed whichplaces a limit on the maximum amount for which guaranteescan be issued, i.e., a ceiling is established. As a rule, such ceilings apply to transactions with repayment terms of morethan 12 months.
Club of London:The uncovered loans granted by commercial banks arerescheduled by the banks on their own initiative (cf. alsoParis Club).
Coinsurance:When the primary supplier passes on his foreign risks to thesubcontractor, e.g. when the latter only gets paid when theforeign buyer has paid the primary contractor, an applicationcan be made for so-called coinsurance. Among EU memberstates, this is regulated by a directive from the Council. Thereare bilateral agreements with other credit insurers. Besidesthis, there is the option of concluding a coinsurance agree-ment with other state export credit agencies covering just asingle transaction.
Commercial risks:Commercial risks are mainly insured under the cover given forthe credit and manufacturing risks involved in export contracts with private buyers. In the case of credit risk, the insured event is the uncollectability of insured accounts receivable as a result of the insolvency of the foreign buyer,as well as his simple non-payment after the expiry of a certainperiod (protracted default). In manufacturing risk cover, thecommercial risks recognized as insured are also the occurrenceof buyer insolvency during the manufacturing period, theunlawful repudiation of the contract by the buyer as well asnon-payment of cancellation costs if the contract was lawfully cancelled.
Environmental and social audit:The Recommendation of the Council on Common Approachesfor Officially Supported Credits and Environmental and SocialDue Diligence (Common Approaches) essentially forms thebasis for the assessment of environmental and social risks ofprojects abroad, in which German exporters are involved assuppliers.
Exposure: Total commitment level of the Federal Government bookedagainst the maximum exposure limit or the commitmentunder an individual export credit guarantee.
Interministerial Committee:Decides on matters of principle and on the availability of cov-er for individual transactions. The Federal Ministry for Eco-nomic Affairs and Energy takes the decisions on the coverapplications with the approval of the Federal Ministry ofFinance, in agreement with the Federal Foreign Office and Federal Ministry for Economic Cooperation and Development,and with the assistance of the mandataries and experts.
Marketable risks:With effect from 2002, the political and commercial risks aris-ing out of export transactions with credit periods of up to twoyears in EU countries as well as core OECD countries are con-sidered to be marketable risks. In line with the principle ofsubsidiarity, state cover is therefore no longer available forsuch risks. The new EU Commission Communication whichcame into force on 1 January 2013 regulates up to 2018 theprocedure under which a country may be classified as tem-porarily non-marketable if and when sufficient cover is notavailable from the private credit insurers.
Multi-sourcing projects:Projects involving exporters from different countries and, inmany cases, with multinational financing.
Offer of cover:Declaration of intent to provide cover subject to the conditionthat the factual and legal basis of the transaction does notchange (transaction earmarked for cover).
Parallel insurance:When the various suppliers in a multi-sourcing project eachhave their own payment claims against a foreign buyer, eachsupplier insures his receivables against loss with his ownnational export credit agency.
Paris Club:International association of official creditors which restruc-tures the debt of countries experiencing payment difficulties.The debt treatment refers almost exclusively to officially guaranteed commercial debt, i.e. guaranteed in particular bythe governments of the creditor countries and developmentaid loans. The Paris Club has no organisational structure withwritten statutes. The procedural guidelines have beendeveloped over the course of time and are amended whenand as necessary (cf. "Club of London").
Political risks:The origin of political risks is to be sought in measures orevents originating in the sphere of state authorities. In thecase of cover for amounts due for payment, such risks arepolitical circumstances which cause the insured accountsreceivable to become uncollectible, especially the generalpolitical cause of loss, which includes legislative or regulatoryactions and so-called chaos events such as war, civil unrestor revolution in foreign countries. The Federal Government further grants cover for the conversion and transfer risk, i.e.,the risk that amounts duly paid by the foreign buyer in localcurrency are not converted and/or not transferred due torestrictions on the international payment system betweencountries. Cover is also given for the risks of frustration of con-tract, when it becomes impossible to fulfil a contract and enti-tlements under it are lost, as well as the risk of loss of goodsbefore the passing of risk for reasons which can be attributedto political circumstances. If such a cause of loss seemslikely – just as in the case of the general political cause of loss– and the goods are sold elsewhere in such a situation, thenthe risk of a shortfall in the proceeds realized is also insured.In the case of manufacturing risk cover the political risksinsured comprise the political circumstances abroad whichlead to the cessation of manufacture or to non-shipment, aswell as embargos imposed under the export law and by anythird countries which may be involved.
Project financing schemes:Are applied to complex export transactions where the projectitself generates sufficient income to cover the operating costs and the debt service for borrowed funds.
Protracted default: Non-payment which persists for a longer period. If an amountowed by a foreign buyer is not settled within a period of, normally, six months after due date, this is considered to constitute protracted default. In the case of the buyer credit cover facility the waiting period is reduced to one month.
Reinsurance:Using the reinsurance model, projects involving exportersfrom different countries (multi-sourcing-projects) can be cov-ered by a single export credit insurer, so that the main suppli-er and the financing bank only have to deal with one partner.The risk is shared between the parties to the reinsuranceagreement according to the national percentages of goodsdelivered.
Special Drawing Rights:The Special Drawing Right (SDR) is a form of artificial currencyunit used by the International Monetary Fund (IMF). Theexchange rate is defined by a basket of currencies comprisingthe US dollar, the euro, the pound sterling and the yen.
Statutory maximum exposure limit:Maximum amount stated in the Federal Budget Act up towhich liability in the form of issued export guarantees may beaccepted. The Federal Office for Central Services and Unre-solved Property Issues (BADV) keeps a record of the totalamount of the issued export guarantees und monitors the uti-lization of the statutory maximum exposure limit.
Structured finance transaction: The financing of an export transaction in which, due to insufficient or non-assessable creditworthiness of the foreigndebtor, and because conventional security instruments (payment guarantee, letter of credit) are not available, otherelements are included in the construction to ensure serviceof the debt, such as the proceeds of offtake agreements.
Total outstanding risk of the Federal Government: The country risk statistics reflect the debt owed by individualcountries (including interest) to the Federal Government andthe amount which would actually have to be indemnified bythe Federal Government under the export guarantees issued.
Uninsured percentage:Exporter’s share in the loss in an event of loss, normally 5%for political risks and 15% for commercial risks and protracteddefault. For wholeturnover policies, it is 10% for commercialrisks. Until the end of 2016 the uninsured percentage agreedin supplier credit cover and wholeturnover policies for com-mercial risks can be reduced to 5% against the payment of apremium surcharge. In the case of buyer credit cover, theuninsured percentage is 5% for all risks, for manufacturingrisk cover it is also 5% and for wholeturnover policies light itis 10% for all risks.
federal export credit guarantees at a glancein million eur
Statutory cover limit
Cover applications (volume)
Small and medium-sized enterprises(share of exporters supported with guarantees in %)
New Business
Covered export volume
of which for
emerging economies and developing economiesindustrialised countries
Covered exports for EU countries
Covered volume as % of total exports
Results
Revenues from
Premiums and fees
Recoveries
from political claimsfrom commercial claims
Other income
Expenses for
Claims paid
for political claimsfor commercial claims
Management fee
Annual Result
*
**
******
2014
165,000
38,615
74.2
24,750.8
20,687.2
4,063.6
1,311.0
2.2
598.1
299.8
181.4
118.4
0.1
504.0
288.4
215.5
84.7
309.3
Accrued Result (since 1951)
Amounts subrogated to Federal Goverment
3,874.4
4,398.3
2015
160,000
38,156
75.4
25,832.2
19,310.6
6,521.6
2,266.4
2.2
541.8
285.7
153.3
132.5
0.8
395.1
94.9
300.1
89.6
343.7
4,218.0
4,444.5
* Including buyer credits
** Firms with up to 500 employees
*** Classfication of countries see p. 85
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 2
Export Credit Guarantees of the Federal Republic of Germany
Hermes Cover
annual report 2015
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 3
Dear ladies and gentlemen,
The German export industry remains on its growth trajectory. Last year, exports
rose by 6.4 percent to a record amount of more than 1.2 trillion euros. At the
same time, the German economy expanded by 1.7 percent. This is further proof
of the importance which exports of goods and services have for the success of
our national economy.
However, conditions in numerous markets that are important for the German
economy remain challenging. Economic growth has continued to slow in
China. Emerging economies and developing countries that export raw materials are coming
under strain from low commodity prices. Russia is facing significant capital outflows and the
depreciation of the rouble. The conflict between Russia and Ukraine has not been resolved,
while the EU is still imposing sanctions on Russia. At the same time, the outlook for a number
of South American countries has deteriorated substantially.
Then there are the challenging geopolitical developments in the Middle East. Following the
historic settlement with Iran of the conflict which had been ongoing since 2002 over the
country’s nuclear programme and the lifting of most of the economic and financial sanctions
in Europe, there is large export potential for German companies in particular. However, there
are still a number obstacles standing in the way of successful resumption of the formerly so
close trading relations with Iran.
During these times characterised by major economic and geopolitical risks, government
export credit guarantees play a particularly important role as a cover and financing instrument
for export transactions. They make a decisive contribution towards maintaining stable and
reliable trade ties even in difficult times.
In 2015, the Federal Government issued export credit guarantees worth 25.8 billion euros
for exports of goods and services. Once again, small and mid-size companies in particular
made use of Hermes Cover to protect themselves from commercially and politically induced
buyer defaults. Three quarters of all applications for cover by the Federal Government were
submitted by small and mid-size companies.
At the same time, however, cover was also provided for a number of large-scale transactions.
The fact that German companies prevailed in international bids for major contracts testifies
to the competitiveness of German exporters and shows the efficacy of Hermes Cover as an
instrument for promoting foreign trade.
In the cover products which it offers, the Federal Government continued on the course which
it had commenced in 2014 and widened the availability of cover to include further countries in
sub-Saharan Africa. The addition of Kenya, Senegal and Uganda not only serves the interests
of German businesses but also marks an important contribution by the Federal Government
to the ongoing economic development of these countries.
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 4
In November 2015, the OECD countries agreed on rules for export credit guarantees aimed
at ensuring that as a fundamental principle only the technologically most advanced and
efficient technologies are supported for the installation and modernisation of coal-fired
power stations. This supplements the corresponding national rules adopted by the Federal
Government in December 2014 for financing coal.
Outside the OECD, the Federal Government also continued its commitment to negotiations
on the introduction of global standards for government-backed export credits in 2015.
In the International Working Group, which comprises participants from the EU and the
OECD as well as representatives from Brazil, China, India, Malaysia, Russia and South Africa
among others, agreement was reached at the end of 2015 to commence negotiations on
comprehensive horizontal rules. This marks an important step towards achieving a cross-
sector and internationally consistent set of rules as a basis for furthering equal opportunities
in international competition.
A further new aspect concerns the inclusion of non-German deliveries of components in
Hermes Cover. Exporters can now submit a preliminary inquiry to determine the availability of
cover for a transaction even if it predominantly comprises foreign deliveries. The response by
companies to the new preliminary inquiry instrument has been favourable and the experience
gained to date consistently positive.
In 2015, government export credit guarantees received praise in several different respects.
A study conducted by the ifo Institute once again confirmed the outstanding importance of
government export guarantees for the national economy, underscoring the importance of
Hermes Cover for securing and protecting jobs in the Germany export industry as well as the
relevant components sector.
The results of a representative survey of companies who had used Hermes Cover were also
encouraging. 96 percent of the companies polled said that they were satisfied with the
scheme, with 94 percent saying that they intended to use government export credit guaran-
tees again in the future. Government export credit guarantees are important and accepted
instruments. Together with the export industry and export-financing banks, we will continue
to develop export credit guarantees to ensure that, looking forward, they retain this status.
Yours,
Sigmar GabrielFederal Minister of Economic Affairs and Energy
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 5
Country cover policy and 34 special forms of cover
36 Country cover policy
38 Emerging economies and
developing countries
38 Latin America and the Caribbean
40 Africa
42 Asia
48 Europe (excluding industrialised countries)
50 Industrialised countries
52 Special forms of cover
52 Project finance and structured finance
54 Aircraft business
55 Ship business
56 A short digression: Investment
guarantees offer protection for
German investments abroad
The Interministerial 8 Committee 2015
10 Development and trends
11 Business overview 2015
at a glance
12 The task of the
Interministerial Committee
13 IMC external meeting
14 Export Credit Guarantees of theFederal Republic of Germany
16 International collaboration
strengthened
16 International Working Group
17 G12 summit in Berlin – annual G7 summit in Rome
18 Consultations
18 Cooperation agreements
20 Network for German exporters
21 Advice eagerly sought
Development of the22 export credit guarantees
24 New developments in the
export credit guarantee scheme
24 Export credit guarantees in the eraof global value chains
25 Federal Government extends KfWprogramme for refinancing Hermes-covered export credit
26 Revised letter of interest
27 Revision of pre-indemnification loss management costs
27 Letter of undertaking revised
27 Federal Government widening cover for additional countries of sub-Saharan Africa
28 Export credit guarantees and
sustainability
29 Human rights and export credit guarantees
29 Antibribery measures
30 Government export credit
guarantees in the energy sector
31 Export credit guarantees for renewable energies
32 Government export promotion forcoal-fired power stations
33 General exclusion of cover for nuclear installations
33 Smart grids added to OECD sectorunderstanding on climate change
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 6
58 Business development
60 New business
61 Number and volume of applications
61 Offers of cover
62 Cover by country groups
63 Cover by horizon of risk and type of cover
66 Cover by industrial sectors
66 Cover for exports of military goods
67 Environmentally relevant aspects in cover for projects
68 Claims, recoveries and
rescheduling
68 Claims
68 Recoveries
69 Rescheduling
70 Results
70 Revenues
70 Expenses
71 Annual result
72 Statutory cover limit and
total commitment level
73 Outstanding risk
74 Unrecovered amounts
under claims paid
76 Tables
Untied loan 78 guarantees (UFK)
80 The year at a glance
82 Transparency initiative
83 The PCC Bakki project – silicon production in Iceland for German industry
84 Annex
85 Classification of countries
85 Photograph credits
86 Products
Definitions and explanations
on the inside of the cover flap
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WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 8
the german federal government promotes german exports
by providing government export credit guarantees,
which are known as “hermes cover”. the interministerial
committee for export credit guarantees decides on whether
to grant cover for an export transaction. it comprises
representatives of the federal ministry for economic affairs
and energy, the federal ministry of finance, the federal
foreign office and the federal ministry for economic
cooperation and development. in 2015, the federal govern-
ment issued export credit guarantees worth 25.8 billion
euros primarily to small and mid-size companies.
the interministerialcommittee 2015
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
9
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 9
developments and trends
Against the backdrop of mounting geopolitical risks
and more muted growth in global economic output and
trade, conditions for German exports remained chal-
lenging. In particular, demand in the emerging econ -
omies and developing countries was weaker than
expected last year.
In addition to structural problems, countries exporting
raw materials, such as Brazil, Russia and Venezuela,
came under pressure from lower oil and commodity
prices.
On the other hand, there was a stronger focus on other
markets such as Egypt, with exporters also increasing -
ly discovering the countries in sub-Saharan Africa as
potential markets. However, German exporters are par-
ticularly paying attention to the Middle East, especially
10 Iran, following the historic agreement to settle the con-
flict over that country’s nuclear programme, which first
broke out in 2002.
Yet, it is not only the markets which are transforming;
in addition, there has been a fundamental change in
the structure of global trade. Globalisation and the relo-
cation of production facilities in foreign countries are
prog ressing. Mounting international competition and
the networking of the economy are spurring the emer-
gence of global value chains. What is more, national
rules are increasingly calling for a certain proportion of
local manufacturing content in imported goods. Finding
the right response to cover for foreign content forms a
material challenge for export credit guarantees. In this
connection, the Federal Government took a decisive
step forward last year to enhance Hermes Cover as an
instrument without, however, questioning the underly-
ing principle of promoting employment within Germany.
Brückner Maschinenbau GmbH & Co. KG from South-EastBavaria shipped a facility for the production of biaxially oriented polypropylene film to Turkey. Fitted with ultra-
modern technology, the system is characterised by minimalmaintenance requirements and achieves lower energy
consumption and greater raw material efficiency than con-ventional machinery. With the new production line, the
large Turkish plastic film producer Polibak Plastik Film isable to produce more than 50,000 t of polypropylene
film a year, thus expanding its annual capacity to more than 130,000 t. Around 80 German mechanical and electri-
cal engineering companies are involved in the project. The Federal Government is supporting the transaction with
a supplier credit guarantee plus buyer credit cover.
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business overview 2015 at a glance
Last year, the German Federal Government issued
export credit guarantees worth 25.8 billion euros cover-
ing exports to 161 countries (2014: 24.8 billion euros,
164 countries). This represents 2.2% (2014: 2.2%) of
aggregate German exports of around 1,196 billion euros
(2014: 1,134 billion euros). The consistently high volume
of cover provided reflects the importance of export
credit guarantees as a crucial instrument in the promo-
tion of foreign trade.
Small and mid-size companies (SMEs)1 in particular
made use of the opportunity of shielding their exports
from political and commercial risks. 75.4% of all appli-
cations were submitted by SMEs (2014: 74.2%).
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
11Many matters concerning the German export industry
and the cover provided by the Federal Government can
no longer be addressed at a national level but call for
international agreements. This applies to the granting
of export credit guarantees in individual sectors as well
as the modification of environmental and social stan-
dards. The Federal Government is committed to the
implementation of global standards in both areas.
Last year, Hermes Cover again helped exporters to
maintain business relations even in politically and eco-
nomically challenging times and to enter new markets.
Without export credit guarantees, numerous transac-
tions would not have been possible in a number of
countries and regions.
1 Companies with up to 500 employees
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the tasks of the interministerial committee
The Federal Government defines its cover policy via
the Interministerial Committee (IMC) for Export Credit
Guarantees.
The IMC discusses and makes decisions on questions
of fundamental importance and on the granting of cov-
er for individual export transactions on the basis of
general guidelines. Besides, it constantly enhances the
government export guarantee system.
In addition to the Federal Ministry for Economic Affairs
and Energy, which holds the lead function, the IMC
comprises representatives of the Federal Ministry of
Finance, the Federal Foreign Office and the Federal
Ministry for Economic Cooperation and Development.
12 Once again, most of the cover provided was for the
emerging economies and developing countries, with
the Federal Government issuing export credit guaran-
tees for exports worth 19.3 billion euros (previous year:
20.7 billion euros) for these countries. Accordingly, they
accounted for 75% of new business (2014: 84%).
Disaggregated by country, Russia ranked highest with
3.6 billion euros (2014: 2.2 billion euros), followed by
the United States with 2.6 billion euros (2014: 1.2 billion
euros) and Egypt, for which the Federal Government
provided cover of 2.4 billion euros (2014: 433 million
euros).
Of the total export credit guarantees, single transaction
cover accounted for 16 billion euros (2014: 13.5 billion
euros) and spread policies for 9.8 billion euros (2014:
11.3 billion euros) in 2015. Cover for transactions with
credit periods of more than 360 days constituted 14.3
billion euros of new business (2014: 10.6 billion euros).
Government cover for short-term credit periods (up to
360 days) was valued at 11.5 billion euros (2014: 14.1 bil-
lion euros). Following a significant rise in the wake of
the financial crisis, the volume of short-term cover has
returned to normal.
Amounts paid out for claims dropped to 395 million
euros in 2015 (2014: 504 million euros). Revenue from
handling fees and premiums for the assumption of risks
came to 542 million euros last year (2014: 598 million
euros). Including recoveries under previously indem -
nified claims of 286 million euros (2014: 300 million
euros), the annual result for the Federal budget came to
344 million euros (2014: 309 million).
interministerial committee – imc
Ministries
@ BMWi Federal Ministry for Economic Affairs and Energy – lead function
@ BMF Federal Ministry of Finance
@ AA Federal Foreign Office
@ BMZ Federal Ministry for Economic Cooperation and Development
Mandataries
@ Euler HermesAktiengesellschaft
@ PricewaterhouseCoopers AktiengesellschaftWirtschafts prüfungs -gesellschaft
Experts
@ representatives of the exporting industries and the banking sector
@ KfW
@ AKA Ausfuhrkredit -gesellschaft mbH
@ Federal Audit Office
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 12
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
13Decisions are made on a consensual basis to ensure
consistency in economic, fiscal and foreign policy as
well as international development work.
The IMC makes decisions on cover for transactions val-
ued at over 10 million euros. Responsibility for export
transactions valued between 5 and 10 million euros is
delegated to the Small Interministerial Committee for
Export Credit Guarantees. The mandataries act as ser -
vice providers and make decisions on applications for
cover of up to 5 million euros in accordance with the
instructions issued by the Federal Government and
under its supervision. In particular cases, responsibility
may be allocated to a higher level (mandataries, Small
Committee, Full Committee).
imc external meeting
In 2015, the Interministerial Committee held its tra -
ditional external meeting in the “velvet and silk city” of
Krefeld, combining it with a visit to German technology
supplier Siempelkamp and piping producer Europipe.
The external meeting provides a good opportunity of
talking to export companies and municipal politicians,
sharing experience gained with the scheme and dis-
cussing future expectations.
During a tour of the company, Dr. Ing. Hans W. Fechner,
management chairman of the Siempelkamp Group,
demonstrated the production processes at the factory
to the Committee members. The company supplies
press lines and full-scale production equipment for the
wood-based products industry, the metal shaping
industry and the composite and rubber industry around
the world.
The InterministerialCommittee met on 3 September 2015 at the Federal Ministry for Economic Affairs and Energy in Berlin.
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 13
14
Export credit guarantees are an important
instrument used by the Federal Republic of
Germany to promote foreign trade. They
protect exporters from commercially or politi-
cally induced payment defaults. The risk of a
default, thus, no longer lies with the exporter
or the bank providing the finance but is
transferred to a large degree to the Federal
Republic of Germany. In return for this, the
policyholder pays a premium calculated on
the basis of the risk involved.
Hermes Cover also simplifies the arrange-
ment of finance for a transaction. Finance
can be raised more readily and on more
favourable terms in the case of transactions
backed by the Federal Government com-
pared with those for which no government
cover is provided. Export credit guarantees
are a demand-oriented promotion instru-
ment.
As a matter of principle, all German export
companies are able to apply for Hermes
Cover. Transactions which strengthen the
position of small and medium-sized enter-
prises (SMEs) are especially considered to
be eligible for cover. There are no rules on
the size of the company or the volume of the
transaction for which cover may be sought.
Nor are any industrial sectors excluded a
Export Credit Guarantees of the Federal Republic of Germany
priori from Hermes Cover. That said, export
credit guarantees are available for nuclear
transactions in only a small number of
exceptional cases, e.g. for plant decommis-
sioning.
Hermes Cover is provided in accordance
with national and international rules and is
contingent upon specific conditions being
met. The key criteria for the provision
of cover include eligibility for support and
justifi abil ity of the risks arising from the
transaction.
Apart from the general interest in executing
the export transaction, a further precon -
dition for eligibility is the absence of any
bribery in the lead-up to the transaction. In
addition, the impact on human rights and
the environment is taken into consideration.
WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 14
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
15
“Justifiable risk” means that there is a high
probability that the transaction will be exe-
cuted without any insured loss arising.
Accordingly, the country risk as well as the
buyer’s creditworthiness and any collateral
that may be available are analysed up front.
The financial risk arising from the provision
of cover is assumed by the Federal budget,
which conversely receives the revenue from
the export credit guarantees. As risk premi-
ums are payable, Hermes Cover is financially
self-supporting and therefore does not con-
stitute a subsidy.
Responsibility for managing and coordinat-
ing the government export credit guarantees
is assigned to Euler Hermes and PwC (man-
dataries), who act as service providers for
the Federal Government.
MUEG Mitteldeutsche Umwelt- und EntsorgungGmbH is implementing one of the largest environ-mental projects in Latvia: The mid-size company is executing the environment-friendly disposal ofacid tar deposits at two landfills. This includes activities such as remediation planning, the instal -lation of the treatment and waste gas purificationsystem and groundwater purification. Based inBraunsbedra in the German state of Saxony-Anhalt,the company is also responsible for removing, treating and transporting the acid tar.
The landfills, which are located 30 km east of Riga,were used between 1950 and 1980 to deposit production waste from oil and lubricant processing.They pose substantial risks to the environment asthey are contaminating the soil, groundwater and surface water due to the absence of any sealingin the pits. For this reason, the acid tar must beurgently removed and the soil and water reha -bilitated. MUEG Mitteldeutsche Umwelt- undEntsorgung GmbH has since treated the planned volume of 30,200 t of acid tar in accordance with the terms of the contract.
70% of the project is being funded by the EuropeanUnion. In addition, the Federal Republic of Germany is supporting the project with suppliercredit cover and cover for services.
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16
international collaboration strengthened
Hermes Cover is embedded in an international set
of rules. Export credit agencies in the OECD member
states observe the requirements of the oecd consen-sus. Within the OECD, the EU member states adopt a
uniform and harmonised position. Representatives of
the EU countries determine their joint approach in
monthly meetings of the eu council working groupon export finance and insurance matters.
international working group
In 2012, the United States and China came to an agree-
ment to enter into negotiations concerning the intro-
duction of global standards for government-backed
export credits. In addition to the EU, all other OECD
Consensus participants as well as Brazil, China, India,
Malaysia, Russia and South Africa, among others, par-
ticipate in this international working group. The Federal
Government plays an active role in the negotiations of
the International Working Group, exerting influence on
its development. As of the end of 2015, this working
group had held nine meetings.
Success was achieved at the October 2015 meeting in
Washington. Following on from intensive discussions
on sector-specific rules for the ships and medical tech-
nology, negotiations were commenced on cross-sector
horizontal rules.
Introduction to government export credit guarantees
A brief video explains in simple
fashion how government
export credit guarantees work.
Cover, finance, risk transfer,
eligibility for support and
subsidiarity – these are just
some of the aspects that are
described in greater detail
in the video.
Primarily directed at small and
mid-size companies that have
previously not used Hermes
Cover, it can be found on the
Internet at www.agaportal.de
(German version only).
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the interministerial committee 2015
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country cover policy and special forms of cover
business development
untied loan guarantees
annex
17This development marks an important step forward
towards establishing an international set of rules which
is binding on all sectors. Uniform standards going be -
yond the OECD make an important contribution to a level playing field in international competition.
This is why the Federal Government remains strongly
committed to such rules.
g12 summit in berlin – annual g7 summit in rome
Held at the end of March 2015 in Berlin, the G12 summit
provided a forum for sharing opinions and experience.
The chairpersons of the export credit agencies of the
G7 countries, the BRIC nations and Korea met in the
German capital for two days to discuss current develop-
ments and challenges relating to export credit business.
In October, the G7 countries held their annual summit
in Rome, likewise discussing topics of current interest
and trends of relevance for export credit business in a
smaller setting.
Current trends and challengesfacing export credit guaranteeswere some of the topics dis-cussed by delegates from twelveexport credit agencies at theirannual meeting, which was hosted by the Federal Ministry for Economic Affairs and Energyin Berlin on 23 March 2015.
From left: David Godfrey, UKEF,Alexey Tyupanov, EXIAR,Alessandro Castellano, SACE,Charles Sarrazin, TRESOR, Dr. Hans-Joachim Henckel, BMWi,Marcelo Pinheiro Franco, ABGF,Geetha Muralidhar, ECGC, Edna Schöne, Euler Hermes, Fred Hochberg, US EXIM, Luo Xi,SINOSURE, Benoit Daignault,EDC, Yanghyun Lim, K-sure, Dr. Ernst Röder-Messell, BMWi,Kazuhiko Bando, NEXI, Dr. Matthias Koehler, BMWi
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18 The berne union comprises 49 public and private-
sector credit and investment insurers from OECD and
non-OECD countries as well as three multilateral orga -
nisations.
cooperation agreements
The internationalisation of trade, cross-border links
and the growing importance of global value chains are
strengthening the need for cross-border agreements.
To date, 24 reinsurance framework agreementshave been signed with other export credit insurers.
consultations
In addition to regular talks at the EU, OECD and Berne
Union level, a number of bilateral, trilateral and multi-
lateral consultations were held with other government
bodies and institutions active in export credit insurance
and export finance in 2015. They included meetings
with representatives from Brazil, China, Italy, Japan,
Korea, Austria and Switzerland. A delegation from India
visited Germany.
The purpose of the consultations is to strengthen joint
activities with other countries, share information on
best practices in government-sponsored export credit
insurance and encourage the establishment of global
standards for export-credit finance. This is also the pur-
pose of work within the Berne Union.
A meeting was held on 24 June2015 between representatives of the Indian export credit insurerECGC and the mandataries at Euler Hermes AG in Hamburg. The purpose was to intensify thecooperation and the work of the International Working Group.
From left: V. Dharmarajan, ECGC,Jens Heitmann, PwC, A. K. Jain,ECGC, Robert Imiela, PwC, Svenja Grell, PwC, Dr. EckhardtMoltrecht, Euler Hermes, Nirdosh Chopra, ECGC, Catrin von Hesberg, Michael Schröder,Hannelore Bergs, Euler Hermes
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cooperation agreements
Australia
Austria
Belarus
Belgium
Brazil
Bulgaria
Canada
China
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Greece
Hungary
India
Israel
Italy
Japan
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Norway
Poland
Portugal
Romania
Russia
Slovak Republic
Slovenia
South Korea
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
S
S
S
S
S
S
S
S
S
S
S
S
S*
S
S
S
S
S
S*
S
S
S
S
S
S
S
S*
S
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
R
B
B
B
B
B
B
B
B
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C
C*
C
C
C
C
C
C
C
C*
C*
C
deliveries from subcontractors accounting for 30-40% can be included pursuant to the decision of the Council of the EU (up to 40% in the case of order values up to a maximum of 7m EUR)
deliveries from subcontractors up to 30% can be included according to bilateral agreement
coinsurance agreement under EU regulations
coinsurance under bilateral agreement
reinsurance agreement on a bilateral basis
bilateral cooperation agreement
S
S*
C
C*
R
B
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
19In preparation of possible reinsurance treaties, coop-eration agreements were signed in 2015 with the
Chinese export credit agency Sinosure, the Brazilian
Export Credit Insurance Agency (ABGF) and the Export-
Import Insurance Company of the Republic of Belarus
(Eximgarant of Belarus).
The table sets out the cooperation agreements in force
with other countries.
A bilateral meeting was held in Kyoto on 11 and 12 November2015 between Japanese export credit agency NEXI and the German Federal Ministry for Economic Affairs and Energytogether with Euler Hermes and PwC. The purpose was toenhance the cooperation.
From left (standing): Kyoko Kojima, Yoshitaku Fukushima,Masaru Kanke, Tetsuya Koizumi, NEXI, Dr. Eckhardt Moltrecht,Euler Hermes. From left (sitting): Jens Heitmann, PwC,Kazuhiko Bando, NEXI, Dr. Hans-Joachim Henckel, BMWi,Takeshi Yasuraoka, METI, Christof Wegner, BMWi
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20
In its efforts to improve the Hermes instrument, the
Federal Government relies on a network of experts. In
addition to business and banking associations, it par-
ticularly maintains an intensive and constructive dia-
logue with exporters and notably also with small and
mid-size companies.
An additional important forum for dialogue with the
business community outside the Interministerial Com-
mittee is the brains trust for export credit guaran-
tees which was set up in 2010 and comprises repre -
sentatives of the ministries, exporters, banks and the
mandataries. The brains trust meets twice a year and
provides a platform for sharing expert information on
the use of export credit cover.
network for german exporters
The African economy is increasinglygrowing in importance for the Germaneconomy, something which was reflected in the strong interest shown by companies as well as representativesof banks and associations at the“Spotlight on Africa” conference held on 31 March 2015 in Hamburg. Organisedin conjunction with the German-AfricanBusiness Association, it was attended byaround 170 participants.
“Africa a market of the future? Makinguse of opportunities and limiting riskswith Hermes Cover” was the title of the presentation held by Oliver Hunke ofthe Federal Ministry for Economic Affairsand Energy during the conference.
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21
advice eagerly sought
Given recent developments in Russia, Ukraine and the
Middle East as well as the new expanded availability
of cover for sub-Saharan Africa, local exporters sought
advice far beyond normal levels last year. Even without
these factors, there was a large number of requests for
advice. In the year under review, company advisors
held more than 9,200 talks in person and over the
phone on a cross-customer and cross-subject basis
(2014: 8,000). At the exporter’s request, companyadvisors also provided assistance in negotiations
with financing banks.
Working in conjunction with associations, banks, cham-
bers of commerce and industry, chambers of foreign
trade and Germany Trade & Invest, the government-
owned German business development agency, the
mandataries held presentations on the various foreign
trade promotion instruments at 136 events in Germany
and abroad last year (2014: 154). Such events were held
throughout Germany as well as in Rio de Janeiro, Hong
Kong, Istanbul and Johannesburg, among other places.
During these presentations in other countries, many
local companies and banks as well as attorneys and
consulting companies made use of this opportunity to
talk to experts.
“The utilisation of export promotioninstruments in the light of local
conditions” was the theme of a conference held in Istanbul on 26 March 2015. Representatives
of Euler Hermes and PwC together with KfW IPEX-Bank GmbH and
Commerzbank AG updated participants on the latest
developments in export credit and investment guarantees.
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the federal government is continuously working on improving the
export credit guarantees and adjusting them in the light of changing
political and economic conditions. thus, for example, it substantially
widened the scope
of cover available
for deliveries of
goods and services
to selected sub-
saharan countries
in africa in 2015.
in addition, it
extended the term of the kfw programme for refinancing hermes-
covered export credits and revised the rules for federal government
participation in loss management costs. a further new service is the
non-binding and cost-free preliminary inquiry on the inclusion of
foreign deliveries of components in cover.
development of theexport credit guarantees 23
the interministerial committee 2015
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Under the three-tier model for
covering foreign-sourced content,
foreign goods and services with
a proportion of up to 30% of the
transaction are automatically
covered (Tier 1) and up to 49%
provided that certain conditions
are met (Tier 2). In justified ex -
ceptions, cover may also be
provided for transactions with
a foreign-sourced component of
more than 49% (Tier 3).
Three-tier model
24
new developments in the export credit guarantee scheme
export credit guarantees in the era of global value chains
Over the last few years, there has been a fundamental
change in the structure of global trade. National pro-
duction processes are increasingly being replaced by
global value chains. In the case of goods purportedly
“made in Germany”, the proportion of local content has
been declining for years.
Global value chains offer additional opportunities but
pose a particular challenge for Hermes Cover. As an
instrument for promoting German exports and for cre-
ating and protecting jobs in Germany, Hermes Cover is
available only for transactions in which the predomi-
nant share of goods is Germany-sourced. In consulta-
tion with businesses, the Federal Government took a
decisive step forward in 2015 towards permitting a larg-
er foreign-sourced share.
Under a three-tier model or via reinsurance with anoth-
er state export credit agency, it is already possible to
obtain cover for transactions with a foreign-sourcedproportion of over 49%. The three-tier model is
now being improved to give exporters a preliminary
indication before they submit an application as to
whether the planned transaction is eligible for Hermes
Cover despite the fact that the export transaction com-
prises mostly foreign-sourced content. This preliminary
inquiry does not require any particular form and can be
submitted free of charge.
In 2015, twelve preliminary inquiries were received, all
of which received positive decisions. In addition, three
transactions with a foreign-sourced element of over
49% were approved by the IMC in the absence of a pre-
liminary inquiry.
At the same time, the Federal Government has been
working on systematically expanding the reinsurancenetwork. With this instrument, it is possible for for-
eign-sourced content to be reinsured, thus allowing a
greater proportion to be covered.
To date, 24 reinsurance framework agreements have
been signed with other export credit agencies. In addi-
tion, the Federal Government is exploring the extent to
which this risk-sharing model can also be applied to the
private insurance market.
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25
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federal government extends kfw programme for refinancing hermes-covered export credits
The Federal Government has extended the term of the
programme offered by development bank Kreditanstalt
für Wiederaufbau (KfW) for refinancing Hermes-covered
export credits until the end of 2020 on unchanged
terms.
Via this programme, the KfW Bank group funds the
loans provided by commercial banks to finance German
exports which are backed by an export credit guarantee
The principle underlying reinsur-
ance is this: the primary insurer
covers the risk of default in
respect of the whole amount of
the export credit. In the event of
any loss, the primary insurer
indemnifies the policyholder in
full. The foreign reinsurer in turn
bears the risk commensurate
with the proportion of the
content sourced in its country
and contributes to the indemni -
Reinsurance
issued by the Federal Government. Studies indicate that
the programme is having a positive effect on the export
finance provided by commercial banks.
The kfw programme can be utilised by all German
and non-German banks with access to buyer credit cov-
er for funding Hermes-covered buyer credits and air-
craft finance on matching-maturities terms provided
that the buyer is domiciled outside the territory of the
European Union. In addition, the loan contract must
have a term of more than three years.
fication payable by the primary
insurer on the basis of this
ratio. Reinsurance arrangements
simplify cover for export
business with a high foreign
content (multi-sourcing projects).
The policyholder also benefits
as it only has to deal with a
single credit insurer (“one-stop
shop”).
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26
revised letter of interest
In a “letter of interest” (LOI), the Federal Government
confirms without assuming any binding legal obligation
that it is fundamentally willing to consider whether it
can provide cover for the transaction for which an appli-
cation has been submitted. In response to a suggestion
submitted by exporting companies, the LOI has now
been modified. As a result, it is now more meaningful
and specifically addresses the transaction for which
cover is being sought.
The availability of cover by the Federal Government
expressed in the LOI is an important competitive factor
for exporters during the bidding process.
In June 2015, more than 6,000 athletes from 50 countries trav-elled to Baku, the capital ofAzerbaijan, to take part in theEuropean Games. Organised bythe European Olympic Commit -tees, the games took place for the first time. Euracom GroupGmbH supplied 202 coaches forthe major sports event for use as transportation for the athletesand delegates during the com -petition. Produced by MAN, the buses are fully air-condi-tioned and fitted with modernexhaust purification systems. The transaction included theshipment of the buses, drivertraining and technical instruction.
The financing of the transactionwas backed by buyer credit cover provided by the FederalRepublic of Germany.
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27
revisions to pre-indemnification loss management costs
The Federal Government has specified in greater detail
the conditions under which it is prepared to share pre-
indemnification loss management costs.
The Federal Government refunds part of the costs
incurred by the bank provided that the expense is rea-
sonable, the measures are taken with the approval or at
the instigation of the Federal Government and these
measures are extraordinary and involve considerable
costs.
With these revisions, the Federal Government is sup-
porting appropriate and necessary measures for early
loss management.
letter of undertaking revised
A letter of undertaking must be submitted by the ex -
porter/manufacturer as a condition for the granting of
buyer credit cover regardless of whether it is provided
on a stand-alone basis or combined with supplier credit
cover.
The letter of undertaking was revised substantially last
year. The wording was made more precise, the scope of
the undertaking reduced and a special letter of under-
taking introduced for globally active companies.
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
The brochure “Letter of undertaking – explanatory
notes” provides exporters with an additional source of
information setting out in simple terms its use and
purpose.
federal government widening cover for additional countries of sub-saharan africa
In 2015, the Federal Government widened the scope of
cover available for the sub-Saharan countries of Sene-
gal and Uganda. At the same time, the restrictions
applicable to Kenya for cover for public-sector buyers
were lifted.
Cover can be granted for credit transactions with the
public sector in these countries provided that collateral
is provided by the national ministry of finance or the
central bank. In addition, an uninsured percentage of at
least 10% applies. The extent to which cover is available
from the Federal Government is determined on the mer-
its of the individual case.
Depending on requirements, the Federal Government
is also willing to review its cover policy for other sub-
Saharan countries.
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28
export credit guarantees and sustainability
As a fundamental rule, the Federal Government does
not provide any cover for transactions which are liable
to have serious negative ecological or social ramifica-
tions. In accordance with the environmental and social
guidelines of the OECD Common Approaches, all proj-
ects and transactions coming within their scope (trans-
actions with a credit period of more than two years and
with a value of at least 15 million euros) are system -
atically reviewed to ensure compliance with the appli-
cable reference standards of the World Bank Group.
These reference standards are the World Bank Opera-
tional Safeguard Policies, the Performance Standards
of the International Finance Corporation (IFC) and the
World Bank Group’s Environmental, Health and Safety
Dieffenbacher GmbH is assembling a turn-key plant for the production of172,000 m³ of medium-density and high-density fibreboard (MDF and HDF)per year in the state of Tabasco in South-East Mexico. The German companyis responsible for the overall technical plan including the machinery forshredding spars, producing the glue and packaging the final products. It is also supplying a gas turbine for the production of electricity, the wasteheat from which will be fed back into in the MDF facility. The fibreboard is produced with minimum raw materials and energy.
Previously, Mexican furniture producers and wholesalers have had to cover almost all of their MDF requirements with imports from the UnitedStates or Chile. This will now change thanks to the new plant. Mexican company Proteak – the operator’s parent company – will be sourcing thewood required for the fibreboard from its own eucalyptus plantations with an area of 8,000 ha. Proteak has been certified by the ForestStewardship Council (FSC) and manages all areas in accordance with theFSC sustainability requirements.
700 new local jobs are being created. The structured finance for this project is being backed by manufacturing risk as well as supplier and buyer credit cover.
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annex
Guidelines. In justified cases, on-site inspections of the
projects may be performed, the local German foreign
missions involved and external consultants called in.
If there is any evidence of serious environmental or
social risks, the transaction is reviewed regardless of
the credit period and the value of the order.
human rights and export credit guarantees
The Federal Government does not support any exports
which can be proven to disregard human rights or con-
tribute to a violation of human rights. The observance
of human rights forms a key aspect of the environmen-
tal and social risk assessment (sustainability review).
The primary benchmark for reviewing export credit
guarantees coming within the scope of the Common
Approaches is provided by the World Bank Group’s
reference standards which, depending on the nature
of the project, include the following aspects of rel -evance for human rights: occupational safety,
health and safety of the communities concerned, land
acquisition and involuntary resettlement, protection of
indigenous people, protection of cultural heritages and
stakeholder consultation.
Transactions not coming within the scope of the Com-
mon Approaches are examined on the basis of the
“watchful eye” approach to ensure compliance with
human rights.
In a preliminary step, exporters and banks
must sign an anti-bribery declaration as
part of any application for cover. In this
declaration, the company must confirm
that the export or loan contract has not
arisen as a result of any criminal acts. In
addition, it must disclose whether any
sanctions under criminal or any other law
have been imposed on it in the past five
years on account of bribery. If any evidence
of bribery-relevant circumstances comes
to light as a result of this declaration or
from any other sources, a more detailed anti-bribery examination is performed
in a second step.
Two-step anti-bribery process
antibribery measures
The avoidance of any form of bribery in export business
forms a key prerequisite for cover. If any evidence of
bribery is discovered after cover has been granted, the
exporter or bank will not receive any indemnification in
the event of a claim.
Germany has implemented the OECD’s “Recommenda-
tion on Bribery and Officially Supported Export Credits”
of 18 December 2006 in a two-step procedure.
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30 This review analyses internal measures, processes and
structures for preventing and combating corruption. In
addition, it illuminates the circumstances leading to the
transaction and identifies the selling, commission and
fee expenses involved.
Pending or ongoing antibribery investigations into a
company or person trigger the more detailed anti brib -
ery review.
In 2015, 75 companies (including group companies)
were subject to such detailed antibribery reviews. This
is equivalent to 6.7% of the 1,124 policyholders submit-
ting applications for Hermes Cover in 2015.
The antibribery processes applied undergo constant
review and revision. In its last assessment, OECD rated
the German measures positively.
government export credit guarantees in the energy sector
At the climate summit of Paris in December 2015, the
international community agreed on a joint approach for
combating climate change. Signed by 195 nations, the
treaty stipulates that global greenhouse emissions are
not to rise any further in the medium term.
The Federal Government has for a long time expressed
its commitment to a global energy rethink in order to
lower CO2 emissions permanently. This approach is
also reflected in cover policy for the energy sector. For
example, renewable energy and climate protection
projects are particularly promoted through long credit
periods of up to 18 years.
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Volume
export credit guaranties for renewables in million eur
2011 2012 2013 2014 2015
1,166.0
715.4
499.2
1,084.7972.9
export credit guarantees for renewable energies
As in previous years, the Federal Government again
provided Hermes Cover for numerous projects in the
re newable energies segment in 2015. These chiefly
involved the delivery of goods and services for wind
power systems. In addition, export credit guarantees
were provided for biomass, solar and hydropower facil-
ities. Total cover provided in the renewable energies
segment came to 972.9 million euros (2014: 1.1 billion
euros). Among other things, cover was provided for
projects in Turkey, Uruguay and South Africa.
In restructuring its energy system, Uruguay is placing store by renewable energies, which it is now using to cover morethan half of its primary energy consumption. One of the main projects in this connection is the construction of the“Pampa” wind farm, which will be generating up to 640gigawatt hours of electricity, i.e. sufficient to supply around180,000 homes. The wind farm is being assembled in asparsely populated region in the heart of Uruguay and will be going on line in mid-2016.
Hamburg-based company Nordex SE is shipping 59 efficientwind power systems to Uruguay for the project and also handling service and maintenance for a period of at least ten years. The project is being financed by KfW IPEX-Bank andBayern LB. The Federal Republic of Germany is backing theproject, which is structured in the form of project finance, with buyer credit cover and supplier credit cover. The pictureshows wind power systems of the same type.
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32
cover available for coal-fired power stations– rules valid from 1 january 2017 (simplified depiction)
Size of power station
Steam pressure > 240 bar and ≥ 593 °Csteam temperature
or emissions < 750 g CO2/kWh
Steam pressure < 221 bar or emissions > 850 g CO2/kWh
Credit period 12 years
Ineligible
Ineligible
Credit period 12 years
Credit period 10 years,
in IDA-eligible countries only (1), (2)
Ineligible
Credit period 12 years
Credit period 10 years,
in IDA-eligible countries only (1), (2)
Credit period 10 years,
in IDA-eligible countries only (1)
> 500 MW ≥ 300 - 500 MW < 300 MW
Steam pressure > 221 bar and > 550 °Csteam temperature
or emissions between 750 and 850 g CO2/kWh
(1) IDA-eligible countries: World Bank Group country classification. It refers to developing countries whose credit rating in the interna-tional capital markets is so low that they are not eligible for any World Bank loans. As they generally only have very low per-capitaincome (the maximum is revised each year), they receive particularly favourable terms from the International DevelopmentAssociation (IDA).
(2) This power plant category also includes exports to other countries provided that they have an electrification rate of < 90% accordingto recent data from the International Energy Agency as of the date of the application.
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general exclusion of cover for nuclear installations
In line with previous practice, Hermes Cover is not avail-
able for the delivery of goods and services for nuclear
power stations. This basic exclusion does not apply to
transactions whose purpose is to enhance the safety
of existing facilities or are required for the shutdown,
dismantling and disposal of nuclear power stations.
Likewise, goods and services not related to commer-
cial electricity production, e.g. research reactors and
nuclear medicine equipment, are exempt from this
exclusion.
smart grids added to oecd sectorunderstanding on climate change
Adopted in September 2015, the rule provides for peri-
ods of up to 15 years for government-guaranteed export
credits in the case of investments in smart grids. Smart
grids ensure optimum grid utilisation without compro-
mising reliability. Spending on such projects helps to
reduce emissions of greenhouse gases.
government export promotion for coal-fuelled power stations
The sector understanding on coal-fired elec -tricity generation projects, which the OECD
adopt ed in November 2015, stipulates that export credit
guarantees are only to be provided for the technologi-
cally most advanced and efficient technologies for the
installation and modernisation of coal-fuelled power
stations.
The extent to which export credit guarantees are avail-
able for coal-fuelled power stations depends on the
size of the power station, the underlying technology
and the buyer country. The rules, which are illustrated
in simplified form on page 32, take effect from 1 January
2017. In addition, projects may only be backed if they
are consistent with the national climate protection strat-
egy of the destination country and no alternatives with
a lesser climatic impact are available. The understand-
ing provides for exceptions in the case of energy islands
and countries with an electrification rate of less than
90%.
Prior to the OECD sector understanding taking effect
on 1 January 2017, the delivery of goods and services
in connection with coal-fuelled power stations will con-
tinue to be reviewed in accordance with the current
environmental and social rules.
The Federal Government did not provide any cover for
the delivery of goods and services in connection with
coal-fuelled power stations in 2015 (2014: around 28
million euros).
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country cover policy and special forms of cover
despite numerous economic and political crises, the federal government
maintained the availability of cover for the delivery of goods and
services to difficult countries almost without any changes last year.
cover was widened for selected countries of sub-saharan africa.
the positive performance of special forms of cover over the last
few years continued. once again, the export credit guarantees issued
by the federal government made a valuable contribution to supporting
the maritime industry in germany. the volume of cover provided for
project finance grew almost three-fold.
35
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
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36
1 The premium is calculated according to eight country risk groups,
in seven of which (1 = best risk, 7 = worst risk) the calculation
is based on a set formula. In countries assigned to country risk
group 0 (OECD high income countries and the countries of the
Eurozone) a market-oriented premium is charged.
types of collateral such as government guarantees,
these may, for example, include certain benchmark
indicators or special requirements with respect to the
buyer’s balance sheet. One proven instrument for man-
aging risk is the establishment of a country ceiling.
A ceiling is the maximum credit limit available for a giv-
en country. If it becomes evident that a ceiling will be
exhausted in full, the IMC will consider whether a new
one can be established. As of 31 December 2015, ceil-
ings had been defined for the following eight countries:
Argentina, Belarus, Cuba, the Dominican Republic, Ser-
bia, Sri Lanka, Ukraine and Uzbekistan.
In contrast to conventional export business, the credit
risks to which project and structured finance is exposed
are usually located outside the buyer’s country and
depend more on the economic viability of the project or
the stability of the financial collateral model than on the
general country risk.
The country risk is evaluated annually at an OECD level
for each country. Countries are assigned to one of eight
risk groups1 on the basis of a macroeconomic model.
These OECD country risk groups are binding on all OECD
member states. In the year under review, the risk situa-
tion improved in six countries due to favourable eco-
nomic and financial developments, as a result of which
they were placed in a higher OECD country risk group1.
oecd country risk categories
Bangladesh
Benin
Brazil
Côte d’Ivoire
El Salvador
Ghana
Hungary
new
5
6
4
6
5
6
4
previously
6
7
3
7
4
5
0
Maledives
Montenegro
Mozambique
Romania
Russia R.F.
Rwanda
South Africa
new
6
7
7
3
4
6
4
previously
7
6
6
4
3
7
3
country cover policy
The IMC defines an appropriate cover policy for each
country on the basis of its specific risk. It governs the
scope and the conditions for the availability of cover
and forms the basis for decisions on the granting of
export credit guarantees. The IMC reviews its cover pol-
icy for a country in the event of any change in its risk
situation.
In its cover policies, the IMC normally also distinguishes
between short-term and extended-term cover as well as
between public and private buyers.
short-term export business with countries outside
the EU and the OECD core countries with credit peri ods
of up to one year can mostly be covered free of any re -
strictions. However, certain forms of collateral may be
necessary in individual cases.
The same thing also applies to cover for the delivery
of goods and services on medium and long-termpayment terms. In countries for which there are limits
on the availability of cover due to existing risks, risk-mit-
igation measures may be applied. In addition to certain
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the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
Herrenknecht AG is supplying four tunnel boring machines to Mexico. Two of them are to be used in the construction of a dual tunnel with a length of 4.7 km through the Cerro de lasCruces mountain. The purpose is to ease traffic congestionbetween Mexico City and Toluca, a rapidly growing city located60 km away, by building a new railway line to link the twocities. Accordingly, the project will be making a positive con -tribution to reducing emissions.
The two other tunnel boring machines are being used to construct a sewage tunnel in Mexico City measuring around 13 km in length to prevent the frequent flooding occurring after heavy precipitation. The new sewage tunnel will simulta-neously be used as a collection drain to lower the risk of flooding in the southern and eastern parts of the megacity.
The Federal Government is issuing combined buyer credit and supplier credit cover.
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new guarantees for latinamerican emergingeconomies and developing countriesin million eur
Brazil
Mexico
Uruguay
Argentina
Colombia
Short-term
Medium and long-term Subtotal 2015: 2,401.5 (73.5%)
Total 2014: 6,018.7 Total 2015: 3,266.2 (100%)
20152014
20152014
20152014
20152014
20152014
1,122.81,022.6
445.3
299.935.0
275.0223.9
258.5376.3
362.6
country ceilingsin million eur
Argentina(private sector only)
DominicanRepublic
Cuba (medium and long-term)
Cuba (short-term)
100
200
50
25
38
emerging economies anddeveloping countries
latin america and the caribbean
Last year, the Federal Government issued
export credit guarantees in the amount of 3.3
billion euros (2014: 6 billion euros) for the
delivery of goods and services to Latin Amer-
ica and the Caribbean. This is equivalent to
12.6% of total cover (2014: 24.3%).
This substantial decline over the previous
year reflects the exceptional situation in this
region arising in 2014, when the Federal Gov-
ernment granted cover worth 3 billion euros
for the delivery of four cruise ships to Ber -
muda. As no projects of a comparable scale
arose in 2015, cover for this region returned
to the level seen in earlier years. As it is, this
is remarkable given the deterioration of eco-
nomic conditions in numerous Latin Ameri-
can countries. The sharp decline in the price
of oil is particularly taking its toll on countries
that export raw materials, such as Brazil, Mex-
ico, Venezuela and Colombia.
American emergingeconomies and
developing countries:
American Virgin Islands,Anguilla, Antigua and
Barbuda, Argentina, Aruba,Bahamas, Barbados,
Belize, Bermuda, Bolivia,Brazil, British Virgin Islands,
Cayman Islands, Chile,Colombia, Costa Rica, Cuba,
Curaçao, Dominica,Dominican Republic,Ecuador, El Salvador,
Falkland Islands, Grenada,Guatemala, Guyana,
Haiti, Honduras, Jamaica,Mexico, Montserrat,
Nicaragua, Panama,Paraguay, Peru, Puerto Rico,
St. Kitts and Nevis, St. Lucia, St. Vincent and
the Grenadines, Sint Maarten, Suriname,
Trinidad and Tobago, Turks and Caicos Islands,
Uruguay, Venezuela.
The country for which the highest volume of
cover was granted in this region was brazil.
In 2015, transactions worth 1.1 billion euros
(2014: 1.0 billion euros), including deliver -
ies worth 74 million euros for the expansion
and modernisation of a painting plant, were
backed by Hermes Cover.
uruguay was responsible for the largest sin-
gle new transaction: the Federal Government
provided combined supplier and buyer credit
cover worth 266 million euros for the con-
struction of a wind farm comprising 59 wind
power systems. The Federal Government
issued cover for other large-scale projects in
argentina (tissue paper production line)
and mexico (production line for medium and
high-density fibreboards).
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development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
Heidenheim-based Voith Paper GmbH & Co. KG sup-plied a full-scale tissue paper process line to CelulosaArgentina. The South American company already operates pulp, paper and sawmills. With the new energy-efficient production line, it will be producingaround 30,000 t of toilet tissue and kitchen towels ayear. This is because, looking forward, CelulosaArgentina would like to use its surplus pulp outputitself rather than selling it in the market. This is alsovery advantageous for ecological reasons as it is no longer necessary to dehydrate the pulp and to thenrehydrate it at another location. This protects the fibres and saves energy. Given the continued growth of the tissue market and the surplus pulp production, it is particularly important for Celulosa Argentina toexpand its value chain. The Federal Government hasissued manufacturing risk and supplier credit cover.
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African emergingeconomies and
developing countries:
Algeria, Angola, Benin,Botswana, Burkina Faso,
Burundi, Cameroon, Cape Verde, Central African
Republic, Chad, Comoros,Congo, Congo (Democratic
Republic), Côte d’Ivoire,Djibouti, Egypt, Equatorial
Guinea, Eritrea, Ethiopia,Gabon, Gambia, Ghana,Guinea, Guinea-Bissau,Kenya, Lesotho, Liberia,
Libya, Madagascar, Malawi, Mali, Mauritania,
Mauritius, Morocco,Mozambique, Namibia,Niger, Nigeria, Rwanda, Sâo Tomé and Principe,
Senegal, Seychelles, SierraLeone, Somalia, South
Africa, South Sudan, St.Helena, Sudan, Swaziland,
Tanzania, Togo, Tunisia,Uganda, Zambia, Zimbabwe.
40
africa
In 2015, the Federal Republic of Germany
granted cover amounting to 3.6 billion euros
(2014: 1.7 billion euros) for the delivery of
goods and services to Africa. This corresponds
to 14% of total cover (2014: 6.8%).
This doubling in the volume of cover com-
pared with the previous year is chiefly due to
guarantees issued for a large-scale project in
egypt. The Federal Government provided
supplier and buyer credit cover worth 1.4 bil-
lion euros for the construction of a gas and
steam power station. Offers of cover were
also provided for the delivery of 100 locomo-
tives and a further two gas and steam power
stations in Egypt.
In sub-saharan africa, the Federal Govern-
ment widened the scope for cover for Kenya,
Senegal and Uganda in 2015, thus marking a
continuation in a development which had
commenced in December 2014. As a result,
export credit guarantees have been avail able
for deliveries of goods and services to public-
sector buyers in Ethiopia, Ghana, Mozam-
bique, Nigeria, Tanzania, Senegal and Uganda
since the end of 2014. A ceiling was lifted for
angola. Cover is now available for credit-
based transactions with the public and pri-
vate sector in kenya free of any restrictions
on the volume. Since the decision to widen
the availability of cover, eight applications for
Hermes Cover have been received for the
delivery of goods and services to these coun-
tries.
In the year under review, 62 applications for
cover with a total value of around 2.4 billion
euros were received for the entire sub-Saha-
ran region (including South Africa) in the year
under review (2014: 61 applications, total val-
ue of 1.7 billion euros).
Egypt
South Africa
Algeria
Tunisia
Nigeria
20152014
20152014
20152014
20152014
20152014
new guarantees for african emergingeconomies and developing countriesin million eur
Short-term
Medium and long-term Subtotal 2015: 3,101.4 (85.8%)
Total 2014: 1,669.1 Total 2015: 3,614.4 (100%)
2,350.5432.8
387.5
151.4198.8
124.368.3
87.7115.0
232.5
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country cover policy and special forms of cover
business development
untied loan guarantees
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Wietmarscher Ambulanz- und Sonderfahrzeug GmbH (WAS) received another largeorder from Egypt. This time, the mid-size company supplied 250 ambulances based on the Mercedes-Benz Vito to the Egyptian Ministry of Health. This means that a total of some 2,800 fully equipped WAS ambulances are now in service in towns andrural regions in Egypt. The vehicles are veritable clinics on wheels: All ambulance functions including the interior climate and lighting can be set via a special controlpanel. In addition, they are fitted with compressed air and oxygen valves in the ceilingas well as a “mediboard” with connections for defibrillators, syringe pumps and monitors. The Federal Republic of Germany issued contract bond guarantees withcounter-guarantees for the project.
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42
asia
In the year under review, the German Federal
Government issued export credit guarantees
worth 5.9 billion euros (2014: 8.1 billion eu -
ros) for the delivery of goods and services to
Asia. This is equivalent to 22.7% of total cover
(2014: 32.6%).
More than half of the cover volume (3.2 billion
euros) in this region was accounted for by the
countries of Eastern Asia (2014: 3.5 billion
euros).
In the year under review, the German Federal
Government issued export credit guarantees
worth 1.1 billion euros (2014: 1.6 billion euros)
for the delivery of goods and services to
South and Central Asia.
Total cover provided for the Middle East came
to 1.6 billion euros in the year under review
(2014: 3 billion euros).
At 1.2 billion euros in 2015, china accounted
for the greatest proportion of new business
in the region as in previous years (2014: 1.4
billion euros). The largest transactions with
China covered by the Federal Government
included the delivery of two continuous an -
nealing systems and a continuous galvanis-
ing line for a cold-rolling mill as well as guar-
antees for Airbus aircraft.
In indonesia, the Federal Government pro-
vided cover for goods and services worth
587 million euros (2014: 303 million euros).
Manufacturing risk, supplier credit and con-
tract bond cover worth around 230 million
euros was provided for the turn-key construc-
tion of a hot strip mill.
China PR
India
Dubai UAE
Indonesia
Saudi Arabia
20152014
20152014
20152014
20152014
20152014
new guarantees for asian emergingeconomies and developing countriesin million eur
Short-term
Medium and long-term Subtotal 2015: 3,567.9 (60.9%)
Total 2014: 8,064.9 Total 2015: 5,862.6 (100%)
1,244.71,358.3
621.8
615.9517.9
586.9302.6
498.61,930.8
1,119.0
Asian emerging economies and
developing countries:
East Asia:Brunei Darussalam, Cambodia,
China PR, Hong Kong, Indonesia, Korea DPR, Laos,Macao, Malaysia, Mongolia,
Philippines, Taiwan, Thailand,Timor-Leste, Vietnam
South and Central Asia:Afghanistan, Armenia,
Azerbaijan, Bangladesh, Bhutan, Georgia, India,
Kazakhstan, Kyrgyzstan,Maldives, Myanmar,
Nepal, Pakistan, Sri Lanka,Tajikistan, Turkmenistan,
Uzbekistan.
Middle East:Bahrain, Iran, Iraq,
Jordan, Kuwait, Lebanon, Oman, Palestine
(autonomous territories), Qatar, Saudi Arabia, Syria,
United Arab Emirates, Yemen.
China PR
Indonesia
Hong Kong
Taiwan
Vietnam
20152014
20152014
20152014
20152014
20152014
new guarantees for east asian emergingeconomies and developing countriesin million eur
Short-term
Medium and long-term Subtotal 2015: 2,797.9 (86.8%)
Total 2014: 3,525.6 Total 2015: 3,224.6 (100%)
1,244.71,358.3
586.9
354.3338.2
338.8413.0
273.2269.7
302.6
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the interministerial committee 2015
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country cover policy and special forms of cover
business development
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annex
Indorama Synthetics is installing a new line for the production of high-quality cotton yarn on the Indonesian island of Java. In this way, the company wants to expand production capacities by around 25% andadditionally strengthen its leading position in Indonesia. The textile machinery is beingsupplied by German exporters SchlafhorstZweigniederlassung der Saurer GermanyGmbH & Co. KG., Trützschler GmbH & Co. KGand Rieter Ingolstadt GmbH.
The Federal Government is backing the project with isolated buyer credit cover. A syndicate comprising Düsseldorf bank IKBDeutsche Industriebank AG (lead manager)and Frankfurt-based bank DZ BANK is providing the finance.
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44 At 273 million euros, cover provided for busi-
ness with vietnam was slightly up on the pre-
vious year (270 million euros). Among other
things, the Federal Government issued guar-
antees for the delivery of two Airbus aircraft
to this country.
Total cover provided for india dropped to
622 million euros in the year under review
(2014: 1.1 billion euros). This decline is chiefly
due to muted demand in the challenging
steel market as well as the absence of any
cover for Airbus aircraft.
The Federal Government provided total cov-
er worth 99 million euros for the delivery of
goods and services to uzbekistan, almost
twice the volume recorded in the previous
year (2014: 54 million euros). Thus, for ex -
ample, manufacturing risk, buyer credit and
supplier credit cover was provided for the
delivery, construction and start-up of a cop-
per foundry.
The reduction by half in cover from 3 billion
euros to 1.6 billion euros is primarily due to
conditions in saudi-arabia, where the vol-
ume of cover dropped from 1.9 billion euros
in 2014 to 499 million euros due to the ab -
sence of any major projects.
By contrast, demand for government cover
for deliveries of goods and services to dubairemains strong. At 616 million euros, the
country accounted for roughly one third of
Hermes-covered deliveries to this region.
Asian emerging economies and
developing countries:
East Asia:Brunei Darussalam, Cambodia,
China PR, Hong Kong, Indonesia, Korea DPR, Laos,Macao, Malaysia, Mongolia,
Philippines, Taiwan, Thailand,Timor-Leste, Vietnam
South and Central Asia:Afghanistan, Armenia,
Azerbaijan, Bangladesh, Bhutan, Georgia, India,
Kazakhstan, Kyrgyzstan,Maldives, Myanmar,
Nepal, Pakistan, Sri Lanka,Tajikistan, Turkmenistan,
Uzbekistan.
Middle East:Bahrain, Iran, Iraq,
Jordan, Kuwait, Lebanon, Oman, Palestine
(autonomous territories), Qatar, Saudi Arabia, Syria,
United Arab Emirates, Yemen.
new guarantees for south and central asian emerging economies and developing countriesin million eur
India
Uzbekistan
Kazakhstan
Bangladesh
Azerbaijan
Short-term
Medium and long-term Subtotal 2015: 955.2 (90.3%)
Total 2014: 1,562.7 Total 2015: 1,057.4 (100%)
20152014
20152014
20152014
20152014
20152014
621.81,119.0
98.7
90.3121.6
75.377.1
69.112.8
53.8
country ceilingsin million eur
Sri Lanka
Uzbekistan
100
150
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country cover policy and special forms of cover
business development
untied loan guarantees
annex
The pharmaceuticals industry has developed into one of the most important sectors of the Bangladesh economy. In response to the steady growth in demand,Beximco Parmaceuticals Ltd. is expanding and modernising its production facilitieslocated close to the capital city of Dhaka. The machinery for manufacturing and packaging pharmaceutical products is being supplied by the Hamburg-based company CCC Machinery GmbH.
This business is considered to be particularly eligible for cover as it ensures supplies of high-quality and inexpensive pharmaceuticals to the general population. In addition,the project is creating roughly 300 new jobs and also helping to protect employment at CCC Machinery GmbH as well as many small and mid-size contractors in Germany.
The Federal Government has provided combined supplier and buyer credit cover for the project.
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46 The largest single transactions entailed cov-
er for aircraft deliveries to Dubai and abudhabi.
One of the most dominant issues for German
exporters in the year under review concerned
the future outlook for business with iran.
Immediately after agreement had been
reached with Iran on a comprehensive treaty
to settle the conflict surrounding the Iranian
nuclear programme that had originally arisen
in 2002, the German Minister for Economic
Affairs and Energy, Sigmar Gabriel, travelled
to Teheran in July 2015 for talks with high-
ranking political and business representa-
tives on the post-sanction era.
Since then, numerous discussions have been
held at the expert level to create the technical
basis for the resumption of trade relations.
The Federal Government expects strong de -
mand for Hermes Cover for Iran as soon as it
becomes available again. Specific opportu -
nities for German companies should partic -
ularly arise in the automotive, mechanical
engineering, energy and environmental en -
gineering, water and waste management,
agriculture and health care industries. There
is a strong need for capital spending and
demand for German goods is traditionally
strong in Iran.
Dubai UAE
Saudi Arabia
Abu Dhabi UAE
Kuwait
Sharjah UAE
20152014
20152014
20152014
20152014
20152014
new guarantees formiddle eastern countriesin million eur
Short-term
Medium and long-term Subtotal 2015: 1,426.0 (90.2%)
Total 2014: 2,976.6 Total 2015: 1,580.6 (100%)
615.9517.9
498.6
201.435.6
56.738.2
53.465.2
1,930.8
Asian emerging economies and
developing countries:
East Asia:Brunei Darussalam, Cambodia,
China PR, Hong Kong, Indonesia, Korea DPR, Laos,Macao, Malaysia, Mongolia,
Philippines, Taiwan, Thailand,Timor-Leste, Vietnam
South and Central Asia:Afghanistan, Armenia,
Azerbaijan, Bangladesh, Bhutan, Georgia, India,
Kazakhstan, Kyrgyzstan,Maldives, Myanmar,
Nepal, Pakistan, Sri Lanka,Tajikistan, Turkmenistan,
Uzbekistan.
Middle East:Bahrain, Iran, Iraq,
Jordan, Kuwait, Lebanon, Oman, Palestine
(autonomous territories), Qatar, Saudi Arabia, Syria,
United Arab Emirates, Yemen.
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Around 90% of Iraqi households use diesel-fuelled generators as the publicgrid does not offer sufficient electricity. This situation is to be remedied with the construction of the Khormala power station in northern Iraq with antotal output of 1,200 megawatts. For this purpose, Siemens AG will be shippingseveral gas turbines and generators to Iraq.
The power station is to substantially reduce the frequent power outages andprovide the population with a reliable and inexpensive source of electricity.This will make it possible to deactivate the environmentally harmful diesel generators. What is more, it should spur the region’s economic development as the improved availability of electricity will encourage smaller companies to settle there. “GTR Global Trade Review” named the project “Best Middle Eastern ECA Finance Deal of the Year 2014“. The transaction is being supported by supplier and buyer credit cover provided by the FederalRepublic of Germany.
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European countries (without industrialised
countries):
Albania, Belarus,
Bosnia and Herzegovina,Bulgaria,
Croatia, Kosovo,
former Yugoslav Republic of Macedonia,
Republic of Moldova,Montenegro,
Romania, Russia RF,
Serbia, Turkey,
Ukraine.
48
europe (excluding industrialised countries)
The Federal Government issued export cred -
it guarantees of 6.6 billion euros (2014: 4.9
billion euros) for the delivery of goods and
ser vices to Europe (excluding industrialised
countries). This translates into 25.4% of total
cover (2014: 19.9%).
At 5.8 billion euros, Russia and Turkey ac -
counted for a large part of the cover provided
for this region.
The large volume of cover of 3.6 billion euros
provided for russia (2014: 2.2 billion euros)
primarily relates to a single large project. The
Federal Government provided manufacturing
risk, supplier credit and contract bond cover
worth 1.7 billion euros for the construction of
an ethylene plant. Excluding this transaction,
the volume of cover was roughly unchanged
over the previous year. The decline in German
exports in the wake of the muted Russian
economy was almost completely offset by the
increased cover requirements.
Business with ukraine declined sharply, with
the volume of cover dropping to 293 million
euros in 2015 (2014: 518 million euros).
By contrast, demand for government export
credit guarantees for deliveries of goods and
services to turkey remained strong last year.
At 2.1 billion euros, the volume of cover was
higher than in the previous year (2014: 1.8 bil-
lion euros). The largest transaction in Turkey
for which an export credit guarantee was
issued entailed the delivery of turbines and
generators for a gas-fuelled power station. In
addition, the installation of numerous wind
farms was made possible with the provision
of Hermes Cover.
country ceilingsin million eur
Serbia
Ukraine
Belarus
200
250
80
Russia R.F.
Turkey
Ukraine
Belarus
Serbia
20152014
20152014
20152014
20152014
20152014
new guarantees for european countries (without industrialised countries)in million eur
Short-term
Medium and long-term Subtotal 2015: 6,377.2 (97.1%)
Total 2014: 4,932.1 Total 2015: 6,564.5 (100%)
3,613.62,224.4
2,141.3
293.1517.8
201.8201.6
127.4110.1
1,754.1
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annex
49With 18 hospitals and 13 day clinics, the Acibadem Clinic Group is the leading private-sector healthcare provider inTurkey. ACENDIS Handels GmbH has supplied equipment for several hospitalsincluding a newly constructed one. In the year under review, the Hannover-based company shipped medical andnon-medical products worth 20 millioneuros to the Acibadem Clinic Group inTurkey, including anaesthesia, ventilation,radiology, ECG and ultrasound equip-ment, laboratory fittings and surgicalinstruments. It also supplied hospital furniture, special doors and facade panels. The transaction was backed bysupplier and buyer credit cover providedby the Federal Republic of Germany.
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Industrialised countries:
Andorra, Australia, Austria,Belgium, Canada,
Czech Republic, Cyprus,Denmark, Estonia, Finland,
France, Germany, Greece,Hungary, Iceland, Ireland,
Israel, Italy, Japan, Latvia, Liechtenstein,
Lithuania, Luxembourg, Malta, Monaco,
Netherlands, New Zealand,Norway, Poland, Portugal,
San Marino, Singapore, Slovak Republic, Slovenia,
Spain, South Korea, Sweden, Switzerland,
United Kingdom, United States, Vatican City
and their dependent territories: BES Island,
Ceuta and Melilla, Gibraltar,Greenland, Guadeloupe,
(French) Guiana, Martinique,Mayotte, Réunion,
St. Pierre and Miquelon.
50
industrialised countries
The subsidiarity principle (private sector be -
fore public sector) applies to government ex -
port credit guarantees. This is why cover tra-
ditionally tends to account for only a small
portion. Hermes Cover is only available where
the private sector is unable to provide com-
parable cover due, for example, to very long
credit periods or to the scale of the project
involved. Consequently, the Federal Govern-
ment mostly issues export credit guarantees
for transactions in developing countries and
emerging markets.
The Federal Government issued export credit
guarantees amounting to 6.5 billion euros in
2015 (2014: 4.1 billion euros) for the delivery
of goods and services to industrialised coun-
tries. This is equivalent to 25.2% of total cov-
er (2014: 16.4%). The relatively high volume
of cover compared with the previous year
relates to four large-scale projects. Thus, the
Federal Government provided Hermes Cover
for the construction of two cruise ships each
worth 1.9 billion euros for delivery to the
united states and italy.
20152014
20152014
20152014
20152014
20152014
new guarantees for industrialised countriesin million eur
United States
Italy
South Korea
Norway
Switzerland
Short-term
Medium and long-term Subtotal 2015: 5,523.6 (84.7%)
Total 2014: 4,063.3 Total 2015: 6,521.6 (100%)
2,638.31,162.5
1,910.5
369.6821.9
308.80.0
296.4353.4
15.3
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51
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
In the year under review, Greek company EZA Protypos HellenicBrewery (EZA) started up an efficient canning line for beer with a capacity of 25,000 half-litre units per hour. The supplierwas KRONES AG from Neutraubling in Bavaria. In addition, the system is also to be used for canning sparkling water and refreshment drinks from 2016. The brewery has an advantageous location in central Greek close to the main transportation route linking Athens and Thessaloniki. With this investment, EZA wants to increase sales of beverages and additionally expand the proportion of its export business.The Federal Republic of Germany is supporting the project with supplier credit cover.
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52
special forms of cover
project finance and structured finance
project finance structures are generally selected
for large-scale projects which cannot or should not be
carried on the balance sheets of the companies in -
volved. A legally and economically independent project
entity, which must be capable of generating sufficient
cash flow to cover the operating costs and debt service,
is established. Accordingly, the issue of an export credit
guarantee for project finance is contingent upon the
completion of a comprehensive analysis of the project
risks as well as the economic viability of the project. In
this connection, the Federal Government attaches par-
ticular importance to the banks, suppliers and investors
involved in the project taking a reasonable share of the
risks.
In 2015, export credit guarantees were granted for six
projects with a combined value of just under 1.4 billion
euros. This was a substantial increase over the previous
year in which cover volume had come to 584.5 million
euros (three projects).
New cover was provided for a silicon foundry in Iceland,
a steel and milling plant in the United States and four
onshore wind farm projects in Lithuania, Montenegro,
Ireland and Uruguay.
The six projects reflect the range of successful project
finance transactions. For one thing, they comprise proj-
ects in established markets for which cover is not avail-
able in the private-sector insurance market due to their
scale and the long-term nature of the credit periods
(e.g. United States). For another, they include projects
in emerging markets cover for which allows German
exporters to enter the market. One example of this is
the cover provided in 2015 for a wind farm in Montene-
gro, the first commercial wind power plant in this South
Eastern European country.
In addition to the six projects for which export credit
guarantees were provided in the year under review, the
Federal Government made two offers of cover with a
volume of 188.1 million euros for onshore wind farms in
Turkey and Uruguay.
The volume of new applications stood at around 2.4 bil-
lion euros at year-end. This and the large number of
project presentations and inquiries (39 letters of inter-
est in 2015) testify to the continued strong demand for
cover for project finance transactions. Most of the ap -
plications and inquiries come from the power industry
– particularly onshore wind farms – and the petro-
chemicals, oil and gas sector. Regionally, they continue
to concentrate on the Middle East, Central America and
Eastern Europe including Turkey and Russia. The viabil-
ity of these projects not least of all depends on current
market trends such as the oil prices.
In addition to new applications, there is also a growing
focus on the part of exporters, banks and sponsors
again on projects for which applications were received
in the past with the expectation that they would be
implemented in 2016.
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53With multi-sourcing projects in particular, there is scope
for integrating Hermes-covered tranches in the case of
German principal contractors as well as in projects in
which German subcontractors supply a significant part
of the goods and services to foreign principal contrac-
tors. Small and mid-size companies in particular also
benefit from this.
In addition to export credit guarantees for project
finance, cover is also available for structured fi -nance. Structured finance allows buyers with insuffi-
cient creditworthiness to finance sizeable investment
projects (e.g. large-scale investments). No new cover
was provided in this segment in 2015.
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
One of the world’s most efficient silicon plants is currentlybeing built in Burnsville, Mississippi in the United States. Anannual production capacity of around 36,000 tons of siliconis planned, equivalent to around 12% of the current US mar-ket demand. The site of the project is located very favourablyin terms of infrastructure. The raw materials required for the production of silicon (particularly silica sand) are avail-able in sufficient quantities in the neighbouring states.
Raw silicon is an important commodity used primarily in the chemical industry but also for the production of aluminium and steel products. As a preliminary product for polysilicon, it is also used in the production of solar cells.In connection with this project, Düsseldorf-based companySMS group GmbH is supplying crucial technology in the form of two submerged arc furnaces for the pro duction of rawsilicon, systems for handling the raw material and productand a dust extraction system. One particular feature is therotary furnace vessels which prevent cold spots in the meltand deposits of carbides on the furnace walls.
The Federal Republic of Germany is backing the project, which is structured as project finance, with manufacturing risk, buyer credit and supplier credit cover.
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54
aircraft business
For the first time in five years, demand for air travel
declined last year, with global airlines’ passenger rev-
enues dropping by 5.7% in 2015. The decline in freight
business was even greater. Despite this, a number of
airlines increased their capacities under their long-term
strategies. This primarily applied to airlines in the Mid-
dle East and in Asia-Pacific.
Despite the softer demand, airlines’ economic situation
improved, with average operating margins widening
to 7.7% particularly as a result of the steady decline in
kerosene prices. Northern American airlines in particu-
lar achieved high profitability.
The volume of Airbus finance jointly sponsored by
Coface (France), ECGD (United Kingdom) and Euler
Hermes (Germany) declined again last year. Given the
In the year under review,Airbus supplied 635 aircraft, of which 7% werebacked by an export credit guarantee issued by the Federal Republic of Germany.
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55high liquidity available in the commercial market, banks
were able to provide long-term funding without re -
course to government support.
What is more, an increasing number of aircraft were
financed with the involvement of leasing companies.
Last year, the initial recipients of around 40% of Airbus
deliveries were leasing companies, which then prompt-
ly leased their aircraft to the airlines. With this struc -
ture, the airlines indirectly benefited from what in some
cases was the very strong economic position of the
large leasing companies and were thus able to lower
their funding costs.
As a result, the proportion of Airbus deliveries covered
by the three European export credit agencies shrank to
just 7% of the total, with most of the aircraft for which
export credit guarantees were issued sold to Asian buy-
ers. Whereas none of the aircraft financing transactions
covered had been funded by bond issues in 2014, this
form of finance was utilised for four transactions in 2015
with a combined total value of 388 million US dollars
for which the Federal Government provided cover as
reinsurer.
With 1,036 new orders (2014: 1,796), Airbus currently
has a total of 6,787 orders on its books (2014: 6,386). It
delivered 635 aircraft in the year under review (2014:
629). Of these, 45 (2014: 51) were backed by export
credit guarantees.
ship business
Conditions in the international ship building industry
remain tense. Even so, the German maritime industry
was able to assert itself impressively in 2015 particularly
in its core businesses, namely passenger, special-pur-
pose and RoRo ships. Against this backdrop, the export
credit guarantees issued by the Federal Government
made a further valuable contribution to supporting the
maritime industry in Germany, repeating the high level
recorded in 2014.
In civil shipbuilding, export credit guarantees worth
4.5 billion euros were issued for new business. This was
joined by cover for military shipbuilding amounting to
585 million euros, resulting in total cover of 5.1 billion
euros (2014: 5.5 billion euros). In addition, there were
offers of cover worth 429 million euros.
Once again, Meyer Werft was awarded major large-scale
contracts for the construction of cruise ships for cruise
companies Carnival and RCCL, which will ensure full
capacity utilisation until 2020. Neptun Werft was able
to defend its market leadership in river cruise ships and
strengthen its business relationship with Viking River
Cruises. In special-purpose shipbuilding, the Federal
Government provided cover for two offshore oil and gas
supply ships and a RoRo ferry for Flensburger Schiffbau-
Gesellschaft FSG. In addition to strong demand for
ships built at German shipyards, there is growing inter-
est on the part of suppliers of maritime components in
the Federal Government’s export credit guarantees.
Thus, cover was provided for the delivery of tank sys-
tems for a tanker to be built in China.
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
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total commitments (exposure) 10-year overview by regions in million eur
Africa
America
Asia
Europe
'15'06 '07 '08 '09 '10 '11 '13'12 '14
357
13,389
605
13,385
944
8,357
2,457
13,126
6,301
14,166
483
13,656
1,067
5,869
6,274
12,714
6,450
10,5813,753
6,900
4,654
14,734
2,431
13,425
6,218
13,066
3,010
6,858
972
7,218
3,817
7,607
824
11,981
4,330
7,137
721
12,573
6,333
8,054
32,73431,021
19,614 19,954
24,272
27,681
34,97136,32333,423
16,804
number of approved applications
Russia R.F.
China PR
India
Colombia
Serbia
21
8
5
5
60
Subtotal 2015: 99 (83.2%)
Total 2015: 119 (100%)
Given the crises and conflicts all around the world,
cover for political risks plays a particularly important
role in foreign investments. German investors must
come to terms with a deterioration in underlying condi-
tions even in well-established foreign markets. Against
this backdrop, many companies consider government
support in the form of an investment guarantee to
be crucial for their activities.
In 2015, the Federal Government issued investment
guarantees worth 2.6 billion euros for 77 projects in
16 countries. Given the heightened cover requirements
for Russia, Eastern Europe was the most important
region ahead of Asia. The main countries were Russia,
China, India, Colombia and Serbia. Around one quarter
of the applications approved were submitted by small
and mid-size companies1. The services sector played
a particularly dominant role in 2015. The number of
applications submitted rose substantially by just under
70% over the previous year. The Federal Government’s
total commitment level stood at 35.0 billion euros at
the end of 2015.
Investment guarantees protect German direct invest-
ments in emerging economies, developing countries
and former transformation countries against political
risks such as expropriation, war or conversion problems.
A short digression: investment guarantees offerprotection for German investments abroad
The benefit for the companies arises from the fact that
the Federal Government intervenes with the government
of the target countries on behalf of the German investor
in order to avert any loss. Guarantees can only be
issued for investments which are eligible for cover and
are viable in terms of risk. A further condition for the
issue of a guarantee is the existence of legal certainty
in the target country; as a rule, this is deemed to be
the case if a bilateral investment promotion and protec-
tion treaty is in force between the Federal Republic
of Germany and the host country of this investment.
Generally speaking, the fee for the cover stands at 0.5%
p.a. of the risk-exposed amounts.
Applications for the issue of investment guarantees are
approved by the Federal Ministry for Economic Affairs
and Energy with the consent of the Federal Ministry
of Finance and in agreement with the Federal Foreign
Office and the Federal Ministry for Economic Cooperation
and Development in an Interministerial Committee.
The Federal Government has mandated a consortium
consisting of PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft (PwC) (lead partner)
and Euler Hermes Deutschland AG with the management
of the investment guarantees.
For further details, please contact:Phone: + 49 (0)40/88 34 - 90 00
www.agaportal.de
56
1 Companies with a maximum of 2,000 employees or
revenues of up to 500 million euros and not members of
a larger group
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The difficult market conditions also sporadically impact-
ed the transactions for which cover had been provided
in earlier years. In this connection, the Federal Govern-
ment was able to avert losses under the Hermes-cov-
ered buyer credits by overseeing restructuring activities
last year.
Despite the tense conditions in much of the global ship-
ping market, there is a large future pipeline of ships
which will be operating in profitable segments. This will
provide opportunities for German shipyards, which are
known for their reliability, and the solidly positioned
maritime components industry, which the Federal Gov-
ernment will be supporting as effectively as it can in the
face of international competition.
57
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
River cruises are growing in popu -larity. One of the leading organisers of these cruises is Swiss shippingcom pany Viking River Cruises AG. In order to modernise and expand itsfleet, it placed an order with NEPTUNWERFT, Rostock, for ten new rivercruise ships. With a length of around135 m, they offer 190 passengersaccommodation in 95 outside cabinsand are to be used on various riversin Europe.
NEPTUN WERFT is also installing environment-friendly technology in the river cruise ships. Thus, for example, the ships possess a solarpower system which feeds electricityinto the on-board grid. In addition,modern diesel-electric engines and efficient power supply systems help to lower fuel consumption significantly.
The employment provided by theshipyard is of great importance forthe Rostock region. The German manufacturing input stands at 100%.
The Federal Republic of Germany is backing the transaction with combined export and buyer creditguarantees and contract bond cover.
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at 25.8 billion euros, the volume of export credit
guarantees was up on the previous year. russia, the
united states and egypt led the list of the top ten
countries ahead of turkey. the proportion of cover
provided for exports to emerging economies and
developing countries came to 75%. claims paid
contracted by 22%. the year closed with a positive
result of 344 million euros. the accumulative
surplus for the federal budget since the scheme
was first established thus climbed to 4.2 billion
euros. outstanding risk rose to 92.4 billion euros.
business development 59
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
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new business
German exports rose in 2015, reaching a re -
cord level of 1,196 billion euros (2014: 1,134
billion euros)1. The impressive growth rates
for German foreign trade are being spurred by
globalisation effects such as the internation-
alisation of production processes. New cover
provided also rose by 4.4% over the previous
year to 25.8 billion euros in 2015. Conse-
quently, the volume of cover again substan-
tially exceeded the level prevailing prior to
the economic and financial crisis. 2.2% of all
German exports were secured with Hermes
Cover in 2015.
There was a small shift in the ratio of new
cover between public and private buyersin fa vour of public buyers. 85% of the indi -
vidual cover was for private and 15% for pub-
lic buyers (previous year: 87% private buyers
and 13% public buyers).
60
top ten markets for new guaranteesin billion eur
Russia R.F.
United States
Egypt
Turkey
Italy
China PR
Brazil
Dubai UAE
India
Indonesia
2.22
1.16
0.43
1.75
0.02
1.36
1.02
0.52
1.12
0.30
3.61
2.64
2.35
2.14
1.91
1.24
1.12
0.62
0.62
0.59
2015
2014 Subtotal 2015: 16.84 (65.2%)
Total 2015: 25.83 (100%)
1 Source: Foreign trade statistics of the Federal
Statistical Office
development of new guarantees in billion eur
2007 2008 2009 2010 2011 2012 2013 2014 2015
17.0
20.722.4
32.529.8 29.1 27.9
24.8 25.8
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61
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
number and volume of applications
Application volumes remained high in 2015
again despite the decline in the number of
ap plications submitted. At the same time,
demand for cover for large-scale projects
continued to grow. Thus, the number of large-
scale transactions valued over 50 million
euros rose from 41 to 51 (79% of the single
transaction policies issued; previous year:
70%).
offers of cover
Offers of cover for contracts still under nego-
tiation had a total value of 9.1 billion euros as
of 31 December 2015. This was 22% lower
than in the previous year. Experience shows
that not all of the transactions earmarked for
cover actually reach fruition as it is still un -
certain on the date on which these offers of
cover are issued whether the contracts con-
cerned will actually be awarded to the ex -
porters who have submitted the application.
German exporters executed a whole series of
large and important projects towards the end
of the year under review in particular, thus
prevailing over the international competition.
new guarantees
Number of single transaction policies
of which for private buyers
of which for public buyers/guarantors
Volume of cover in million EUR
of which single transactionpolicies volume in million EUR
of which for private buyers
of which for public buyers/guarantors
2015
618
567
51
25,832
15,988
13,586
2,402
2014
656
613
43
24,751
13,473
11,779
1,694
Sharein %
2015
100
92
8
100
85
15
Changein %
-5.8
-7.5
18.6
4.4
18.7
15.3
41.8
applications
Number of applications
of which single transaction policies
wholeturnover policies
Applications in million EUR
2015
10,832
1,261
9,571
36,156
2014
12,979
1,517
11,462
38,615
Changein %
-16.5
-16.9
-16.5
-6.4
Sharein %
2015
100
12
88
funds earmarked for export credit guarantees
Countries
Emerging economies anddeveloping countries
Industrialised countries
Total:
2014million EUR
9,839.3
1,808.1
11,647.4
2015million EUR
8,118.4
1,005.6
9,124.0
Sharein %
84.5
15.5
100.0
Sharein %
89.0
11.0
100.0
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62
cover by country groups
Traditionally, a large portion of Hermes Cover
is provided for emerging economies anddeveloping countries1. In fact, these coun -
tries accounted for 75% of the cover provided.
The importance of this cover for the German
economy is particularly reflected in the share
of total exports for which guarantees are pro-
vided. 6.8% of German exports to emerging
economies and developing countries were
covered by guarantees issued by the Federal
Government in 2015 (19.3 billion euros).
Three quarters (910.4 billion euros) of Ger-
man exports went to the industrialisedcountries. Given the lower political risks
and the availability of private export credit
insurance, the proportion of government-
backed exports in total exports to industri-
alised countries is mostly relatively small. Of
these, exports valued at 6.4 billion euros
(0.7%) were covered by the Federal Govern-
ment in 2015 (previous year: 4.1 billion euros).
1 See country allocation in the annex on page 85
Emerging economies and developing countries
Industrialised countries
volume of cover by country groups in billion eur
2011 2012 2013 2014 2015
29.8 29.1 27.9
24.8 25.8
25.422.4
7.43.7
22.0
5.9
20.7
4.1
19.3
6.5
cover percentage of total export volumeby country groups in %
2015
2014
2013
America
Africa
Asia
Europe
Industrialisedcountries
9.819.5
13.5
15.07.4
9.8
3.95.4
6.5
9.06.3
7.2
0.70.50.7
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63
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
cover by horizon of risk and type of cover
As in the previous years, short-term busi-ness with credit periods of less than one year
continued to decline from a high level, thus
reflecting the ongoing normalisation of the
market after the financial crisis. The volume of
cover fell by 18.5% over the previous year,
coming to 45% of new cover (previous year:
57%).
This trend was particularly evident with
whole turnover policies (APG and APG
light), under which exporters are able to ob -
tain cover for short-term credits in transac-
tions with numerous buyers in different coun-
tries. In 2015, turnover of 9.7 billion euros
was covered (previous year: 11 billion euros).
Rough ly one quarter (26%) of the APG turn -
over re ported was accounted for by Russia,
Brazil and China.
volume of cover by country groups
Countries
Emerging economies anddeveloping countries
Latin America
Africa
Asia
Middle EastSouthern/Central Asia
East Asia
Oceania
Europe
Industrialised countries
Total:
Thereof EU-countries
2014 million
EUR
20,687.2
6,018.7
1,669.1
8,064.9
2,976.6
1,562.7
3,525.6
2.4
4,932.1
4,063.6
24,750.8
1,311.0
2015 million
EUR
19,310.6
3,266.2
3,614.4
5,862.6
1,580.6
1,057.4
3,224.6
2.6
6,564.8
6,521.6
25,832.2
2,266.4
Sharein %
83.6
24.3
6.8
32.6
12.0
6.3
14.3
0.0
19.9
16.4
100.0
5.3
Sharein %
74.8
12.6
14.0
22.7
6.1
4.1
12.5
0.0
25.4
25.2
100.0
8.8
Changein %
-6.7
-45.7
116.5
-27.3
-46.9
-32.3
-8.5
8.3
33.1
60.5
4.4
72.9
* See the country list p. 85
*
covered exports by horizon of risk in billion eur
Single transaction policies over 5 years
Single transaction policies 1 - 5 years
Single transaction policies up to 1 year
Wholeturnover andrevolving policies
2011 2012 2013 2014 2015
11.0
1.03.6
13.5
29.1
13.6
0.71.7
9.8
25.8
11.3
2.81.0
9.7
24.8
11.4
1.32.9
12.3
27.9
14.6
1.02.4
11.8
29.8
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64
turnover under wholeturnover policiesin million eur
Russia R.F.
Brazil
China PR
Turkey
Saudi Arabia
1,158.3
908.4
816.9
743.5
443.4
1,094.9
745.7
668.6
641.3
417.3
2015
2014 Subtotal 2015: 3,567.8 (36.9%)
Total 2015: 9,680.2 (100%)
guarantees by horizon of risk in billion eur
Total 2015: 25.8
Wholeturnover andrevolving policies:
Single transaction policies up to 1 year:
Single transaction policies 1 - 5 years:
Single transaction policies over 5 years:
9.8
1.7
0.7
13.6 6.6%
38.1%
2.6%
52.7%
Market normalisation is also mirrored in the
continued decline in the number of whole-
turnover policies. At just under 850 in 2015,
they hovered around their multiyear average.
In addition to wholeturnover policies, which
account for a large proportion of the short-
term cover provided, the Federal Government
also offers revolving single transactionpolicies for regular business with a single
buyer and cover for individual projects with
credit periods of up to one year. Revolving
single transaction policies fell again by 39.4%,
reaching a volume of 164 million euros (pre-
vious year: 271 million euros).
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business development
untied loan guarantees
annex
short-term single transaction policies
with a credit period of up to one year also fell
to 1.7 billion euros (previous year: 2.8 billion
euros). This includes short-term receivables
arising from the delivery of goods and ser -
vices under construction service contracts as
well as capital goods on short payment terms.
The proportion of medium and long-termcover in the total volume widened signifi-
cantly to 14.3 billion euros (previous year: 10.6
million). Among other things, this also re -
flected heightened demand for cover for
large-volume transactions with longer credit
periods. The vast majority of these transac-
tions entailed buyer credits (98% of cover).
short-term single transaction policies in million eur
Egypt
Russia R.F.
China PR
Abu Dhabi UAE
India2015
2014
2.6
316.6
339.7
0.1
260.9
339.9
246.4
80.0
74.1
649.5
Subtotal 2015: 1,389.9 (81.9%)
Total 2015: 1,696.4 (100%)
medium and long-term policies in million eur
United States
Russia R.F.
Italy
Turkey
Egypt2015
2014
1,162.5
726.3
15.3
993.8
50.9
2,164.1
1,910.5
1,464.0
1,374.7
2,638.3
Subtotal 2015: 9,551.6 (66.8%)
Total 2015: 14,291.5 (100%)
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export credit guarantees for military goods in billion eur
Egypt
Egypt
South Africa
2015
0.001
0.585
0.001
Type of goods
Aircraft tow tractors for military use
Building, testing and delivery of two submarines
CNC portal milling machine for the production and assembly of aircraft components
Total 2015: 0.587
cover by industrial sectors
At 5.1 billion euros, cover for ship transactions
was only marginally down on the very high
level recorded in the previous year (5.2 billion
euros). This business, which traditionally en -
tails very large-scale projects, accounted for
19.7% of the total volume of Hermes Cover
(previous year: 20.9%) and 32% of the single
transaction policies.
Aircraft contracts backed by export credit
guarantees rose by one third to 2.1 billion
euros, equivalent to 8.2% of total new cover
(proportion of single transaction policies:
13%).
cover for exports of military goods
Cover worth 0.6 billion euros was provided
for military goods in 2015 (2014: 1.1 billion eu -
ros). This was equivalent to 2.3% of total new
cover (previous year: 4.5%), i.e. below the
multi-year average of 3.9% (calculated since
1997).
Ships:
Energy:
Manufacturingindustry:
Aircraft:
Oil and gasproduction:
Paper, timber, leather and textile industry:
Infrastructure:
Others:
5,085
2,401
2,363
2,101
1,847
614
612
966
share of single transaction policies byindustrial sectors in million eur
Total 2015: 15,988
13%
15%
12%
6%
4%32%
15%
4%
single transaction policies by industrial sectors in million eur
Ships
Energy
Manufacturing industry
Aircraft
Oil and gas production
Paper, timber, leather and textile industry
Infrastructure
Service industry
Agriculture and food industry
Mining
5,174
1,785
1,799
1,580
235
615
697
670
150
275
5,085
2,401
2,363
2,101
1,847
614
612
446
269
169
2015
2014 Subtotal 2015: 15,907 (99.5%)
Total 2015: 15,988 (100%)
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country cover policy and special forms of cover
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environmental relevance of supported projects
Audited projects
In-depth assessment category A and B
Officially supported projects Category A
Officially supported projects Category B
2014number
145
37
14
26
Volume in billon
EUR
16.1
3.7
1.1
1.0
2015number
146
56
14
23
Volume in billon
EUR
21.7
9.4
2.9
1.1
environmentally relevantaspects in cover for projects
Projects coming within the scope of the com-mon approaches must undergo environ-
mental and social due diligence. This particu-
larly includes all transactions with a credit
period of more than two years. The transac-
tions are categorised in accordance with their
possible environmental and social impact.
The category determines the scope of the
audit. In 2015, the Federal Government pro-
vided cover worth 2.9 billion euros for envi-
ronmental category A transactions (projects
which have the potential to have significant
adverse environmental and/or social impacts
which are diverse, irreversible and/or un prec -
edented or which may be located in or near
sensitive areas). In environmental category B
(projects with local or easily reversible envi-
ronmental and/or social impact), cover came
to 1.1 billion euros.
Under the Common Approaches, deliveries
for existing plants which do not result in any
material change of function or capacity do not
need to undergo any detailed environmental
audit; in this case, a risk assessment is suffi-
cient. These transactions reached a volume of
some 403 million euros in the year under
review.
officially supported, environmentally relevant projects in 2015 by categories and industrial sectors
Category APower generation
Gas processing industry
Metal processing industry
Other industries
Total Category A
Category BPower generation and distribution
of which renewables: 12 projects – 599.6 million EUR
Wood processing and paper
Infrastructure
Metal processing industry
Total Category B
Total:
Volume inmillion EUR
1,182.8
1,386.6
198.3
155.7
2,923.4
779.6
171.0
41.8
92.2
1,084.5
4,007.9
Number
4
2
4
4
14
13
5
2
3
23
37
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68 claims payments in millon eur
Political risk claims
Commercial risk claims
Total:
2011
20.2
388.3
408.5
2012
40.9
241.6
282.5
2013
116.2
116.3
232.5
2014
288.4
215.5
504.0
2015
94.9
300.1
395.1
* Differences caused by rounding
*
top ten countries – claims payments under commercial risk cover in million eur
Russia R.F.
Ukraine
Ghana
Brazil
India
Netherlands
Bulgaria
United Kingdom
Kazakhstan
Abu Dhabi UAE
23.6
17.1
3.9
32.4
4.6
0.0
12.0
20.9
9.1
30.6
71.1
25.3
23.4
20.1
17.2
13.5
13.4
12.4
12.2
9.1
2015
2014 Subtotal 2015: 217.7 (72.5%)
Total 2015: 300.1 (100%)
claims, recoveries andrescheduling
claims
Outgoing payments for claims contracted by
21.6% over the previous year to 395.1 million
euros. This was primarily due to the decline
in outgoing payments for political loss for
Iran to 94.2 million euros (previous year: 287.1
million euros). The reduction in claims pay-
ments is particularly related to the fact that a
large part of the outstanding receivables had
already been indemnified.
On the other hand, claims payments for
commercial loss rose by 39.2%. The larg -
est claims payments were for Russia, Ukraine
and Ghana. In Russia’s case this was materi-
ally due to defaults on the part of individual
banks of national buyers in heavy industry as
well as individual losses in the Russian bank-
ing sector.
recoveries
Once again, relatively high recoveries of
around 285.7 million euros were received on
prior claims. Agreed restructuring plans for
large claims as well as the broad portfolio
of commercial claims under management of
over 1.9 billion euros distributed across some
1,000 foreign debtors point to continued high
recoveries in the future.
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country cover policy and special forms of cover
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annex
recoveries for claims paid (excl. interest) in million eur
under political risk cover
thereof rescheduled amounts
under commercial riskcover
Total:
2011
92.3
91.1
126.7
219.0
2012
105.4
104.1
94.0
199.4
2013
101.6
99.7
142.7
244.3
2014
181.4
147.9
118.4
299.8
2015
153.3
146.3
132.5
285.7*
* Difference caused by rounding
top ten countries – recoveries under commercial claims in million eur
Kazakhstan
Indonesia
Chile
Bulgaria
Singapore
Côte d’Ivoire
Malaysia
Abu Dhabi UAE
Russia R.F.
India
17.9
13.5
6.6
6.3
48.0
4.8
3.8
3.6
3.3
5.4
Subtotal 2015: 113.2 (85.4%)
Total 2015: 132.5 (100%)
rescheduling
On the basis of the multilateral repayment
agreement entered into by the paris club,
the Federal Republic of Germany and Argen -
tina signed a bilateral agreement on 29 Jan -
uary 2015 governing the settlement of out-
standing amounts of around 2.6 billion euros.
Argentina paid the instalment of 210 million
euros due in May 2015 within the requisite
period.
In June 2015, Chad was one of the last African
countries to reach the completion point under
the HIPC (heavily indebted poor countries)
initiative, thus qualifying for full debt cancel-
lation by the creditor countries. The promised
waiver will be implemented with the sign-
ing of a bilateral agreement with the Federal
Republic of Germany.
At the end of 2015, the Paris Club was able
to reach an agreement with Cuba on the
repayment of outstanding debts. Under the
ar rangements, Cuba is to settle outstanding
amounts of around 2.6 billion US dollars over
a period of 18 years. As the Federal Republic
of Germany had already signed a reschedul-
ing agreement with Cuba in 2000, it merely
took part as an observer in the negotiations.
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70 revenues in million eur
49.9%
26.3%23.6%
0.1%
Total 2015: 1,084.8 *
Amortisation and recoveries:
Premium/feesearned:
Interest received:
Other income:
285.7
541.8
256.4
0.8
* Difference caused by rounding
highest interest paymentsin million eur
Argentina
Iraq
Pakistan
Myanmar
Serbia
47.0
15.3
15.1
11.3
129.8
Subtotal 2015: 218.5 (84.9%)
Total 2015: 257.3* (100%)
* Difference caused by rounding (interest and exchange rate gains)
results
revenues
In the year under review, total revenues for
the Federal budget from export credit guaran-
tees declined by 2.5%.
Despite the increased volume of cover, in -
come from premiums and fees fell by 9.4%
as the fees for medium and long-term cover
are frequently only payable in later periods.
recoveries under previously indemnified
claims and debt repayment under re -scheduling agreements declined by 4.7%
over the previous year. The largest recover -
ies were received from Argentina (58.9 mil-
lion euros), Kazakhstan (48.0 million euros),
Egypt (41.9 million euros), Indonesia (17.9 mil-
lion euros) and Iraq (16.8 million euros).
The interest income of 256.4 million euros
(previous year: 214.3 million euros) arose
almost solely from rescheduling agreements.
In addition, currency-translation gains of 0.8
million euros were recorded in connection
with claims.
expenses
In the year under review, expenses dropped
by 17.7% to 484.7 million euros (previous
year: 588.7 million euros). They comprise
claims payments (395.1 million euros) and
the costs for the administration of export
credit guarantees (89.6 million euros).
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financial resultin million eur
Interest received
Annual result excluding interest
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15
413 519 384 581 309 344
6,592
428 454 606
110 99 115 123 111 214 256125
2,432
93
annual result and results accrued of the federal export credit guarantees 1980-2015 in million eur
Annual result (excluding interest)
Results accrued (excluding interest) - 15,000
- 10,000
- 5,000
+ 5,000
0
'80 '84 '88 '92 '96 '00 '04'82 '86 '90 '94 '98 '02 '06 '08 '10 '12 '14 '15
The interest income of 256.4 million euros
(previous year: 214.3 million euros) arising
pre dominantly from rescheduling agree-
ments was transferred to the Federal budget.
For methodical reasons, it is excluded from
the calculation of the financial result as the
funding costs incurred by the Federal Govern-
ment in respect of claims paid are likewise
not included.
annual result
With a cash surplus of 343.7 million euros,
the Federal Republic of Germany’s export
credit guarantee scheme achieved a positive
result for the Federal budget accounts for the
17th year running. Accordingly, the cumula-
tive total balance of export credit guarantees
rose to around 4.2 billion euros (not adjusted
for inflation) as of the end of 2015.
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total commitments of the federal government (exposure) breakdown by country groups and statutory maximum exposure limit in billion eur
Stat. max. exp. limit
Uncategorisable*
Emerging economies and developing countries
Industrialised countries
2013 2014 2015
90.5
31.1
7.5129.1
91.1
6.2
35.4
132.8
165.0
92.9
33.7
7.5134.1
160.0145.0
* The “uncategorisable” exposure refers to allocations made for
wholeturnover policies under the statutory maximum exposure limit.
72
statutory cover limit and total commitment level
Export credit guarantees are granted on the
basis of amounts authorised by the fed-eral budget. As of the end of the year, 83%
of the statutory cover limit of 160 billion euros
had been utilised. Interest covered does not
count towards the statutory cover limit.
The Federal Government’s total commit-ment level (exposure) fell to 132.8 billion
euros (previous year: 134.1 billion euros). This
figure equals the total volume of export credit
guarantees issued (net of interest) which are
still exposed to risks. Exposure is defined as
the actual portfolio registered by the Federal
Office for Central Services and Unresolved
Property Issues (BADV). However, it does not
provide any indication of the real outstanding
risk as the export credit guarantees count
towards the statutory cover limit on the basis
of their full amount until liability has been dis-
charged regardless of their execution status.
In the year under review, there were additions
of 18.2 billion euros for new cover but dis-
charges of 19.7 billion euros.
In addition, cover for interest came to 55.4 bil-
lion euros at the end of the year (previous
year: 55.8 billion euros). The Federal Govern-
ment’s total commitment level including in -
terest thus stood at 188.2 billion euros.
the federal government's statutory cover limit
Law drafted by theFederal Government
Federal Budget Act
Statutory cover limitMaximum amount for future cover
in the light of existing and on risk cover
BADVFederal Office for CentralServices and Unresolved
Property Issues
Mandataries (Euler Hermes, PwC)
parliamentpasses
determines
report new issues and the discharge
of liability for extinguished risks
monitors
utilisa
tion
registers the maximum amountsfor which liability is accepted
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total outstanding risk by industrial sectors
Sector
Ships
Energy
Aircraft
Manufacturing industry
Oil and gas production
No recording of industries
Infrastructure
Paper, timber, leatherand textile industry
Mining
Chemical industry
Agriculture andfood industry
Service industry
Environmental engineering
Total:
as at 31.12.2015billion EUR
30.0
15.0
11.5
11.1
7.4
4.8
4.2
3.2
2.1
1.5
1.1
0.5
0.0
92.4
Sharein %
32.5
16.2
12.4
12.0
8.0
5.2
4.5
3.5
2.3
1.6
1.2
0.5
0.0
100.0 **
* Wholeturnover policies, reschedulings
** Difference caused by rounding
*
top ten countries – total outstanding risk in billion eur
Turkey
United States
Russia R.F.
Bermuda
India
Switzerland
United Kingdom
Egypt
South Korea
China PR
8.9
6.7
7.3
8.0
4.0
4.0
2.1
0.9
2.7
2.4
9.3
9.2
8.4
7.8
3.8
3.7
3.7
3.0
2.6
2.4
2015
2014 Subtotal 2015: 53.9 (58.3%)
Total 2015: 92.4 (100%)
Turkey:
United States:
Russia R.F.:
Bermuda:
India:
Switzerland:
United Kingdom:
other countries:
9.3
9.2
8.4
7.8
3.8
3.7
3.7
46.5
share of total outstanding risk by countryin billion eur
Total 2015: 92.4
8.4%
9.1%
4.1%
50.3% 4.0%
10.1%
10.0%
4.0%
73
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country cover policy and special forms of cover
business development
untied loan guarantees
annex
outstanding risk
The federal government’s outstandingrisk is derived from the future maturities of
commitments under cover granted plus inter-
est, less the percentage to be retained by the
exporters and banks for their own account.
This amount constitutes the theoretical max -
imum outstanding risk from current Federal
Government guarantees at any given time if
the entire risk occurs in full. However, it does
not provide any indication of the real like -
lihood of the risk turning into a claim and
thus the Federal Government’s liability to
indemnify it.
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74
total outstanding risk by maturities in billion eur
36.1%
37.2%
12.1% 14.6%
up to 1 year:
1 to 5 years:
more than5 years:
no fixedmaturity*:
13.5
34.4
33.4
11.1
Total 2015: 92.4
* isolated manufacturing risk cover, contract bond cover
total outstanding risk by country groups
Countries
Emerging economies and developing countries
Latin America
Africa
Asia
Europe
Industrialised countries
Total:
*
**
2014million EUR
61,317.1
13,476.5
6,602.7
22,583.2
18,654.7
27,150.0
88,467.1
2015million EUR
62,062.3
13,031.3
8,478.5
20,849.7
19,702.8
30,354.0
92,416.3
Sharein %
69.3
15.2
7.5
25.5
21.1
30.7
100.0
Sharein %
67.2
14.1
9.2
22.6
21.3
32.8
100.0
* see country classifications p. 85
** including Oceania
unrecovered amounts under claims paid
At the end of the year, unrecoveredamounts under claims paid for commercial
and political loss – including rescheduled
trade and loan receivables – stood at 4.4 bil-
lion euros and were thus unchanged over the
previous year. These unrecovered amounts
arise from claims paid for receivables trans-
ferred to the Federal Government which the
Federal Government may be able to recover
in the future.
Significant recoveries can be expected from
outstanding commercial claims totalling
around 1.9 billion euros due to restructuring
agreements already entered into in respect of
major claims.
In the case of outstanding political claims(709.7 million euros), further recoveries can
generally be expected except where future
multilateral debt relief measures take effect.
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top ten countries – debt owed to the federal government out of rescheduling agreements and political risk claims in million eur
Argentina
Iran
Iraq
Pakistan
Myanmar
Korea DPR
Serbia
Zimbabwe
Egypt
Sudan
493
210
177
146
1,006
83
72
64
47
109
Subtotal 2015: 2,407 (95.9%)
Total 2015: 2,509 (100%)
amount outstanding in billion eur
43.5%*
40.5%*
16.0%
Total 2015: 4.4
Commercial claims:
Political risk claims:
Political risk claims regulated in rescheduling agreements:
1.9
0.7
1.8
* Difference caused by rounding
An outstanding amount of 1.8 billion euros
has been restructured in the Paris Club to
take account of the ability of the debtor
countries to pay and is governed by bilater -
al rescheduling agreements. However,
there is no certainty that the repayments thus
agreed will be actually received as existing
and future debt relief arrangements may ad -
ditionally reduce the value of the outstanding
claims.
No outstanding amounts due to the Federal
Government were cancelled under debt re -
scheduling arrangements in 2015 (previous
year: 11.4 million euros). Since the establish-
ment of export credit guarantees, the Federal
Republic of Germany has waived total debt
of just under 4.4 billion euros owed by the
poorest countries under earlier debt-resched-
uling agreements.
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76
Covered Total export New percentage Cover volume guarantees of total export applications Year in billion EUR in billion EUR volume in billion EUR
Allocated amount of Total Stat. max. stat. max. outstanding exp. limit exp. limit**** risk****
* Starting 1989, values include former Eastern Germany
** Starting 1993, a new statistical method is applied in the EU to record overall export figures
*** Volume of new applications, until 2005 business volume of decisions
****The column “Allocated amount of stat. max. exp. limit” reflects the overall level of exposure under the statutory limit for the respective year. On the basis of these figures conclusions cannot, however, be drawn on the amounts actually at risk, because they also include indemnification and other payments made in respect of reschedulings for which recoveries are stillexpected.
For this reason, the Federal Government’s total outstanding risk has been recorded seperately since the end of 1997.
1950 4.3 0.2 3.6 1.0
1955 13.1 1.6 12.5 5.1
1960 24.5 2.4 9.6 8.3
1965 36.7 2.8 7.5 10.0
1970 64.1 4.9 7.7 12.0
1975 113.3 10.1 8.9 55.8
1980 179.2 14.6 8.1 64.8
1985 274.6 15.9 5.8 54.0
1990* 348.0 13.7 3.9 29.9
1995** 383.2 17.1 4.5 29.8
2000 596.9 19.5 3.3 21.0
2005 786.2 19.8 2.5 24.8
2006 893.6 20.6 2.3 33.9 ***
2007 969.1 17.0 1.8 38.1
2008 994.9 20.7 2.1 42.8
2009 808.2 22.4 2.8 48.0
2010 959.5 32.5 3.4 36.8
2011 1,060.2 29.8 2.8 37.4
2012 1,097.4 29.1 2.6 41.7
2013 1,093.9 27.9 2.6 38.7
2014 1,133.5 24.8 2.2 38.6
2015 1,195.9 25.8 2.2 36.2
0.3 0.3
3.8 2.5
6.1 5.2
8.7 8.1
13.8 12.9
30.7 25.0
76.7 59.6
99.7 80.9
81.8 68.3
99.7 91.9
112.5 106.1 56.5
117.0 104.9 56.7
117.0 98.4 58.8
117.0 96.7 58.1
117.0 101.3 62.3
117.0 107.8 66.0
120.0 107.5 76.4
135.0 116.6 82.3
135.0 124.9 85.2
145.0 129.1 87.7
165.0 134.1 88.5
160.0 132.8 92.4
new guarantees as related to totalexport volume; cover applications
utilization of the statutory maxi-mum exposure limit in billion eur
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1950-1954 27.6 16.8 25.6 5.3 13.5
1955-1959 85.6 83.2 168.0 10.8 -10.0
1960-1964 141.3 144.7 370.1 14.4 -98.5
1965-1969 247.0 381.4 587.7 22.8 18.0
1970-1974 346.1 421.9 808.1 37.9 -77.9
1975-1979 897.5 468.5 580.6 82.6 702.8
Subtotal 1,745.1 1,516.6 2,540.1 173.7 547.9 482.1
1980-1984 1,437.3 860.9 3,034.5 149.9 -886.1 238.2
1985-1989 1,343.3 1,034.6 5,512.6 183.9 -3,318.5 760.1
1990-1994 2,022.9 2,028.3 12,121.9 244.3 -8,315.0 1,725.6
1995-1999 2,727.3 2,722.2 6,614.4 270.6 -1,435.5 4,143.6
2000-2004 2,399.3 3,905.1 3,615.1 317.6 2,371.6 5,278.6
2005-2009 2,722.2 12,014.1 1,608.9 336.1 12,511.2 4,746.7
2010 776.5 187.2 282.2 75.8 605.6 92.7
2011 778.6 232.3 408.5 83.4 519.0 115.2
2012 546.7 199.4 282.5 79.8 383.8 123.6
2013 653.9 244.7 232.5 85.2 580.9 111.4
2014 598.1 299.9 504.0 84.7 309.3 214.3
2015 541.8 286.5 395.1 89.6 343.7 256.4
Total amount 18,013.0 25,531.8 37,152.2 2,174.6 4,218.0 18,288.6
Total income 43,544.8
Total expenses 39,326.8
Result accrued excluding interest 4,218.0
Debt owed to the Federal Government 4,444.5
of which regulated under reschedulings 1,799.7
* Interest received by the Federal Budget is exluded when calculating the financial result since the refinancing costs incurred
by the Federal Government in respect of claims paid are also not included.
** Recoveries for claims paid and rescheduled amounts include special revenues and exchange rate gains
Differences are due to rounding
result in million eur
Recoveries for Expenses for the Annual claims paid and Disbursements handling of the results Premiums/ rescheduled for claims and export credit excluding Year(s) fees earned amounts** reschedulings guarantees interest Interest*
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raw material markets were characterised by declining prices in
2015. this led to delays in the execution of numerous natural
resources projects. projects for which an untied loan guarantee
was considered
were also affected
by this with the
result that the
federal government
issued only one
untied loan
guarantee for
96 million euros in 2015. exposure stood at 4.8 billion euros
at the end of 2015. even so, the continued intense competition
in the commodities industry spurred demand for untied loan
guarantees to cover raw material projects around the world.
against this backdrop, a transparency initiative was launched in
2015. among other things, this entailed a redesigned website and
more intense dialogue with banks, industry and associations.
untied loan guarantees (ufk) 79
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
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Raw materials
MetalsCopper
Ferroniobium
Palladium
Graphite
Bauxite
Aluminium
Iron ore
Tungsten
Nickel
Zinc/lead
Titanium
Phosphate
Potassium
Gold
Energy raw materialsNatural gas
LNG
LPG
Foundry coke
Other raw materials
Total 2015:
Number
18
4
2
1
1
1
1
1
1
1
1
1
1
1
1
5
2
1
1
1
6
29
ufk enquiries distribution among the types of raw materials in 2015
the year at a glance
In 2015, one new untied loan guarantee worth a total
of 96 million euros (including interest) was issued. This
guarantee was for an untied loan granted to finance
a silicon production plant in Iceland and ensures the
supply of raw material for three German industrial com-
panies.
Prices hit new lows in many raw material markets during
the year. However, this did not automatically lead to
any change in the tight supply situation for German
companies given the continued existence of multifac-
eted underlying raw material-sourcing risks. This was
also reflected in the heightened interest in untied loan
guarantees. Last year, two applications for raw mate-
rial projects (previous year: one application) with a
combined value of 396 million euros (plus cover for
interest) were received. The number of enquiries rose
substantially to 29 (previous year: 18). These concerned
raw material projects in 13 different countries mostly
entailing mineral resources (primarily copper). In 2015,
plans for six of these projects (three copper, two nio -
bium and one graphite project with a combined value
of around 1.6 billion euros) had already progressed far
enough for the Federal Ministry for Economic Affairs
and Energy to confirm their in principle eligibility for
cover in the light of raw materials policy considerations.
All in all, the Federal Government has confirmed the in
principle eligibility of 26 projects in 17 countries in the
light of raw materials policy considerations over the last
80
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81
the interministerial committee 2015
development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
five years. These projects entailed 14 different mineral
and energy sources, impressively testifying to the flexi-
bility of this guarantee instrument.
The Federal Government’s maximum liability (expo sure)
under the guarantees issued and still on risk – includ-
ing interest – stood at 4.8 billion euros at the end of
2015 (previous year: 4.9 billion euros). Whereas expo-
sure to development bank projects in various countries
fell from 2.5 to 2.3 billion euros, it rose from 2.4 to 2.5
billion euros in the case of raw material projects. As of
the end of the year, the portfolio comprises a total of
ten guarantees, namely five guarantees for raw material
projects and five for development bank projects.
The untied loan guarantees paid for themselves in the
year under review from premiums and fees. There were
no claims.
The 2015 Budget Act provided for a joint statutory cov-
er limit of 65 billion euros for the issue of untied loan
guarantees, investment guarantees and European
Investment Bank loans.
Countries where raw materials projects were regarded as eligible for support during the past 5 years
ufk underwriting practice – countries
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82
transparency initiative
A transparency initiative was launched in 2015 after
agreement had been reached between the Federal
Government, the mandataries and industry to present
untied loan guarantees as an instrument for raw mate-
rial projects and the related processes more transpar-
ently and comprehensibly.
The core element of this initiative entailed a revised
website for the untied loan guarantees on the joint
website for the foreign trade promotion instruments,
the “AGA Portal”. The revised website was presented at
the second raw material dialogue on united loanguarantees, which was held in Berlin on 13 November
2015. Participants included representatives of banks,
raw material-processing companies and industry asso -
ciations. The new content provided on the website in -
cludes information on the UFK cover policy for raw
material projects as well as the application and deci-
sion-making processes. The section on covering prac-
tice includes an overview of the countries and com-
modities on which the Federal Government has made
positive decisions on in principle eligibility for cover in
the light of raw materials policy considerations over the
last five years. This provides interested parties with an
indication of the types of raw material projects for which
untied loan guarantees are theoretically available.
The documents required and the review and decision
pro cesses in the two-step application procedure are
described in clear terms and the expected duration of
the process is stated. The new website is being flanked
by a new leaflet summarising the main information on
untied loan guarantees for raw material projects and
outlining the benefits for the parties involved in the
project. This leaflet is available at the AGA portal.
Feedback on the new website and the leaflet has been
consistently positive. Participants in the raw material
dialogue stressed the importance of the untied loan
guarantee as it provides a reliable and significant cover
instrument for German industry independent of price
and economic cycles against the backdrop of intensi-
fied international competition for natural resources and
raw materials.
For further details, please contact:
Phone: + 49 (0) 40 / 88 34 - 90 00
www.agaportal.de
(from left): Sigmundur Davið Gunnlaugsson(Iceland’s Prime Minister), Kristján Pór
Magnússon (mayor of municipality ofNordurthing), Waldemar Preussner (owner and
chairman of the board of directors of PCC SE)and Ragnheiður Elín Árnadóttir (Iceland’s
Minister of Industry and Commerce) at theopening ceremony on 17 September 2015
in the north of Iceland.
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country cover policy and special forms of cover
business development
untied loan guarantees
annex
A highly modern plant for the production of silicon
metal has been under construction in a new industrial
trading estate in the town of Húsavík in north-eastern
Iceland since mid-2015. The main sponsor is PCC SE
from Duisburg. The ultra-pure quartzite required for
the plant is being supplied by the PCC Group’s own
mine in Poland. At least 32,000 tons of silicon metal
are to be produced annually from 2018. The project
will be creating around 120 direct jobs.
Silicon metal is used as a preliminary product in
numerous applications in the chemicals, aluminium
and electronics industry and is the main input factor
for the production of wafers, e.g. for solar modules.
In addition to the highly pure quartzite, energy is one
of the decisive input factors, accounting for around
40% of total production costs. As only around 13% of
Germany’s annual silicon requirements of around
280,000 t are covered by local production, there is a
very strong dependence on imports of this important
high-tech metal. Accordingly, reliable supplies
of silicon are indispensable for numerous final and
The PCC Bakki project – silicon production in Iceland for German industry
83interim products manufactured in Germany. The
Icelandic silicon will be sold to three renowned
German industrial companies. In view of the long-
term silicon deliveries to Germany, KfW IPEX-Bank
was able to submit an application for the issue
of an untied loan guarantee.
SMS Group GmbH, an experienced German foundry
engineering company, is responsible for the turn-key
construction of the plant as the EPC contractor.
The Federal Government has also issued an export
credit guarantee for the project in accordance with
an application submitted by KfW IPEX-Bank. The
untied loan guarantee and the export credit guarantee
were issued in May 2015.
In addition to PCC SE as the main investor, Icelandic
pension funds have also contributed equity to the
project. The debt capital of around 195 million US dol-
lars is being provided in the form of project finance
solely by KfW IPEX-Bank, which is performing all
agency functions in addition to structuring the trans -
action. The share of the finance covered by the untied
loan guarantee is valued at 70 million US dollars.
The portion for which the export credit guarantee has
been issued stands at around 94 million US dollars.
The project is furthering Iceland’s industrial develop-
ment and also creating new local employment, as
well as protecting existing jobs in Germany. In addi-
tion, it is making a significant contribution to securing
supplies of silicon metal in Germany.
KFW IPEX-BANK GMBH, Frankfurt am Main
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tions of the AGA Report, the General Terms and Condi-
tions, application forms and information leaflets as well
as the Annual Reports can also be accessed via the
Internet. The “Hermes Cover Special” addresses key
aspects of export credit guarantees in detail. The arti-
cles are revised and updated to reflect any changes.
Further brochures are also available on the Internet.
2015: @Letter of undertaking – explanatory notes
2014: @Preliminary inquiry on the inclusion of
foreign content in cover
2013: @Environmental and social review of exports:
The Common Approaches
2012: @ Inclusion of foreign content in Hermes Cover
@Duties
2011: @Calculation of premiums
@Permissible payment conditions
2010: @Refinancing of officially supported export
receivables
This report on the export credit guarantees provided by
the Federal Republic of Germany is published in Ger-
man and English.
Rev.: 31. December 2015
The leadership function in the Interministerial Com -
mittee, which has the underwriting responsibility for
the Federal Export Credit Guarantees, is exercised by
the federal ministry for economic affairs andenergy:
Bundesministerium für Wirtschaft und Energie
Referat VC2
Scharnhorststraße 34-37
10115 Berlin
www.bmwi.de
The Federal Government has appointed a con sor-
tium formed by euler hermes aktiengesellschaft,
Hamburg, (Euler Hermes) as lead partner, and
pricewaterhousecoopers aktiengesellschaftwirtschafts prüfungsgesellschaft, Frankfurt am
Main, Branch Office Hamburg, (PwC), to manage the
official export credit guarantee scheme. Further details,
information, documents and advice on the opportuni-
ties offered by export credit guarantees and the appli-
cable pro cedures can be obtained by contacting the
Head Office of Euler Hermes Aktiengesellschaft or one
of its branch offices. Extensive information material on
the official export guarantee scheme, e.g. current edi-
84
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development of the export credit guarantees
country cover policy and special forms of cover
business development
untied loan guarantees
annex
African emerging economies and developing countries:
Algeria, Angola, Benin, Botswana, BurkinaFaso, Burundi, Cameroon, Cape Verde, Cen-tral African Republic, Chad, Comoros, Con-go, Congo (Democratic Republic), Côted’Ivoire, Djibouti, Egypt, Equatorial Guinea,Eritrea, Ethiopia, Gabon, Gambia, Ghana,Guinea, Guinea-Bissau, Kenya, Lesotho, Li -beria, Lib ya, Madagascar, Malawi, Mali,Mauritania, Mauritius, Morocco, Mozam -bique, Namibia, Niger, Nigeria, Rwanda,Sâo Tomé and Principe, Senegal, Sey-chelles, Sierra Leone, Somalia, South Af ri -ca, South Sudan, St. Helena, Sudan, Swa -ziland, Tanzania, Togo, Tunisia, Uganda,Zambia, Zimba bwe.
Asian emerging economies and developing countries:
@ Middle East: Bahrain, Iran, Iraq, Jordan,Kuwait, Leb a non, Oman, Palestine (au -ton omous territories), Qatar, Saudi Ara -bia, Syria, United Arab Emirates, Yemen.
@ East Asia: Brunei Darussalam, Cam bo -dia, China (People’s Republic), HongKong, Indonesia, Korea (DemocraticPeople’s Republic), Laos, Macao, Ma -laysia, Mongolia, Philippines, Taiwan,Thailand, Timor-Leste, Vietnam.
@ South/Central Asia: Afghanistan, Arme-nia, Azerbaijan, Ban gladesh, Bhutan,Georgia, India, Ka zakh stan, Kyrgyzstan,Maldives, Myanmar, Nepal, Pakistan, SriLanka, Tajikistan, Turkmenistan, Uzbek-istan.
@ Ozeania: American Samoa, Cook Is lands,Fiji, French Polynesia, Guam, Ki ribati,Marshall Islands, Micronesia, Na uru, NewCaledonia, Niue, Northern Ma rianaIs lands, Palau, Papua New Guinea,Pitcairn Islands, Solomon Islands, Samoa(Western), Tokelau, Tonga, Tuvalu, Vanu-atu, Wallis and Futuna.
European countries (without industrialised countries):
Albania, Belarus, Bosnia and Herzegovina,Bulgaria, Croatia, Kosovo, former YugoslavRepublic of Macedonia, Republic of Moldo-va, Montenegro, Romania, Russian Federa-tion, Serbia, Turkey, Ukraine.
classification of countries
1 newly classified in the country group.
photographs by courtesy of
Cover Bilfinger
4 Bundesregierung
6, 8, 9, 49 ACENDIS Handels GmbH, Hannover
6, 22, 23, 57 NEPTUN WERFT GmbH & Co. KG,Rostock
6, 34, 35,53 SMS group GmbH, Düsseldorf
7, 10, 11, 58, 59 Brückner Maschinenbau GmbH & Co. KG, Siegsdorf
7, 78 Yolanda Van Niekerk, Dreamstime.com
13 Michael Reitz, Berlin
14, 15 MUEG Mitteldeutsche Umwelt-und Entsorgung GmbH, Braunsbedra
17 Gunter Werner, Berlin
18 Carolin Hölscher, Hamburg
19 NEXI, Tokyo
20 Gabriele Struwe, Buchholz
21 AHK Türkei, Istanbul
26 Euracom Group GmbH, Berlin
28 Dieffenbacher GmbH Maschinen-und Anlagenbau, Eppingen
30, 31 Nordex SE, Hamburg
37 Herrenknecht AG, Schwanau
39 Voith Paper GmbH & Co. KG, Heidenheim
41 Wietmarscher Ambulanz- und Sonderfahrzeug GmbH, Wietmarschen
43 Schlafhorst Zweigniederlassungder Saurer Germany GmbH & Co.KG., Übach-Palenberg
45 © 2005 – 2014 Beximco PharmaLtd. All rights reserved.
47 Siemens AG
51 KRONES AG, Neutraubling
54 Copyright Airbus
56 James Lauritz, Getty Images
78 Petr Vodnak, Dreamstime.com
79 Branex, Dreamstime.com
82, 83 PCC SE, Duisburg
Classification of countries into industri-alised countries and emerging econ o -mies and developing countries
Industrialised countries:
The group of industrialised countries com-prises all coun tries with OECD country classification 0; these include OECD high-income countries (according to the WorldBank definition: countries with a GNI percapita above 12,736 US dollars in 2015),member states of the European MonetaryUnion including their affiliated terri tories,as well as Singapore.
Andorra, Australia, Austria, Belgium, Cana-da, Czech Republic, Cyprus, Denmark, Es -tonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy,Japan, Latvia1, Liechtenstein, Lithuania,Luxembourg, Malta, Monaco, Netherlands,New Zealand, Norway, Poland, Portugal,San Marino, Singapore, Slovak Republic,Slovenia, Spain, South Korea, Sweden,Switzerland, United Kingdom, UnitedStates, Vatican City
and their dependent territories:BES Island, Ceuta and Melilla, Gibraltar,Greenland, Guadeloupe, Guiana, Marti -nique, Mayotte, Réunion, St. Pierre andMiquelon.
American emerging economies and developing countries:
American Virgin Islands, Anguilla, Antiguaand Barbuda, Argentina, Aruba, Bahamas,Barbados, Belize, Bermuda, Bolivia, Brazil,British Virgin Islands, Cayman Islands,Chile, Colombia, Costa Rica, Cuba, Curaçao,Dominica, Dominican Republic, Ecuador, El Salvador, Falkland Islands, Grenada,Guatemala, Guyana, Haiti, Honduras,Jamaica, Mexico, Montserrat, Nicaragua,Panama, Paraguay, Peru, Puerto Rico, SintMaarten, St. Kitts and Nevis, St. Lucia, St.Vincent and the Grenadines, Suriname,Trinidad and Tobago, Turks and CaicosIslands, Uruguay, Venezuela.
annex export credit guarantees
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products
Buyer credit cover:Protects banks against the risk arising in connection with theamounts receivable under a credit provided to a foreign buyeror borrower.
Buyer credit cover-express:It facilitates the financing of smaller transactions having a vol-ume of up to 5 million euros with the granting of buyer creditcover within four bank working days provided that specifiedstandards are met.
Contract bond cover:Contract bond cover enables the exporter who has to put up abond in favour of his buyer in order to secure his own contrac-tual obligations (advance payment, bid, performance or main-tenance bonds) to protect himself from losses resulting fromthe bond being called unfairly or for political reasons (cf.counter-guarantee).
Constructional works cover:This type of cover protects the exporter from the typical risksinvolved in construction work carried out abroad and covers,in addition to the amounts receivable, other risks which mayarise in connection with political events during constructionabroad (e.g. the risk of confiscation or destruction of con-struction equipment).
Counter-guarantee:To complement contract bond cover taken out by an exporter,a counter-guarantee in favour of the guarantor can be as-sumed by the Federal Government. This entitles the guarantor,equivalent to a demand guarantee, to receive payment fromthe Federal Government for up to 80% of the amount of a called bond. This relieves the strain on the exporter’s creditlines up to the amount indemnified and so means considerablyimproved liquidity for him.
Export credit cover for service providers:This type of cover makes the isolated insurance of servicesrendered by professionals, such as architects, engineeringand other consultants, possible.
Framework credit cover:Framework credit cover secures a bank’s exposure from smallbuyer credits issued under a general loan agreement.
KfW refinancing programme:Under this programme long-term refinancing with congruentmaturity for export credits is made available to Germanexporters on behalf of the Federal Ministry for EconomicAffairs and Energy. The funds raised by means of selling thisexport credit to KfW are available for the financing of new,Hermes covered export transactions. More detailed informa-tion can be found on the Internet at (www.kfw.de) under theheader “Asset Securitisation – Refinancing of Export Loanscovered by Federal Guarantees”.
Leasing cover:Covers the political and commercial risks involved in leasingtransactions by German lessors (manufacturers or leasingcompanies) with lessees abroad.
Manufacturing risk cover:A manufacturing risk cover facility enables the exporter to protect his production costs incurred in the manufacture of thegoods supplied and/or the performance of the services specifiedin the export contract in the event that fulfilment of the exportcontract becomes impossible for or unacceptable to the exporter.
Revolving buyer credit cover:The revolving buyer credit guarantee is a form of bundled coverfor financing banks which secures the amounts due undershort term buyer credits with a repayment term normally notexceeding 12 months. The object of insurance is the financingof export business transacted by a German exporter with aspecific foreign buyer with whom he has a long-term businessrelationship.
Revolving supplier credit cover:It is recommended for recurring deliveries to one and thesame foreign buyer due to the simple handling in order toavoid having to submit an individual application for eachtransaction. The maximum credit period is 24 months.
Securitisation guarantee:A securitisation guarantee can be used to enhance the creditvaluation of a debt as an additional agreement to a buyer credit guarantee, thus improving the conditions of the guarantee, if the policyholder bank grants a buyer credit tothe foreign debtor and wishes to refinance the loan in turn onthe capital market.
Supplier credit cover: Supplier credit cover protects the exporter against the publicor private buyer risks arising from an individual export contract concluded with a foreign buyer.
Wholeturnover policy:The wholeturnover policy offers comprehensive cover for non-marketable risks at reasonable premiums for export contractswith a large number of foreign buyers and with payment termsof up to 12 months. The countries to be covered in this spreadpolicy with online handling can be chosen by the policyholder.The minimum insurable turnover is 500,000 euros.
Wholeturnover policy light: The wholeturnover policy light is a comprehensive coverinstrument which is inexpensive and easy to handle, es pecially well suited to the needs of small and medium-sized enterprises. It covers export business with one or moreforeign buyers on credit terms of up to four months. The policyprotects against the risk that receivables are still unpaid 6 months after due date (protracted default).
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definitions and explanations
Arrangement (OECD Consensus):The Arrangement is a "Gentlemen’s Agreement" between theOECD members which lays down certain minimum and maxi-mum terms permissible for officially supported export creditswith a maturity of more than 2 years. The Arrangment aims atcreating a level playing field for the exporters and avoidingfinancing competition which would place an unnecessary burden on national budgets.
Ceiling:For countries where cover facilities have been restricted forrisk management reasons, an amount of cover is fixed whichplaces a limit on the maximum amount for which guaranteescan be issued, i.e., a ceiling is established. As a rule, such ceilings apply to transactions with repayment terms of morethan 12 months.
Club of London:The uncovered loans granted by commercial banks arerescheduled by the banks on their own initiative (cf. alsoParis Club).
Coinsurance:When the primary supplier passes on his foreign risks to thesubcontractor, e.g. when the latter only gets paid when theforeign buyer has paid the primary contractor, an applicationcan be made for so-called coinsurance. Among EU memberstates, this is regulated by a directive from the Council. Thereare bilateral agreements with other credit insurers. Besidesthis, there is the option of concluding a coinsurance agree-ment with other state export credit agencies covering just asingle transaction.
Commercial risks:Commercial risks are mainly insured under the cover given forthe credit and manufacturing risks involved in export contracts with private buyers. In the case of credit risk, the insured event is the uncollectability of insured accounts receivable as a result of the insolvency of the foreign buyer,as well as his simple non-payment after the expiry of a certainperiod (protracted default). In manufacturing risk cover, thecommercial risks recognized as insured are also the occurrenceof buyer insolvency during the manufacturing period, theunlawful repudiation of the contract by the buyer as well asnon-payment of cancellation costs if the contract was lawfully cancelled.
Environmental and social audit:The Recommendation of the Council on Common Approachesfor Officially Supported Credits and Environmental and SocialDue Diligence (Common Approaches) essentially forms thebasis for the assessment of environmental and social risks ofprojects abroad, in which German exporters are involved assuppliers.
Exposure: Total commitment level of the Federal Government bookedagainst the maximum exposure limit or the commitmentunder an individual export credit guarantee.
Interministerial Committee:Decides on matters of principle and on the availability of cov-er for individual transactions. The Federal Ministry for Eco-nomic Affairs and Energy takes the decisions on the coverapplications with the approval of the Federal Ministry ofFinance, in agreement with the Federal Foreign Office and Federal Ministry for Economic Cooperation and Development,and with the assistance of the mandataries and experts.
Marketable risks:With effect from 2002, the political and commercial risks aris-ing out of export transactions with credit periods of up to twoyears in EU countries as well as core OECD countries are con-sidered to be marketable risks. In line with the principle ofsubsidiarity, state cover is therefore no longer available forsuch risks. The new EU Commission Communication whichcame into force on 1 January 2013 regulates up to 2018 theprocedure under which a country may be classified as tem-porarily non-marketable if and when sufficient cover is notavailable from the private credit insurers.
Multi-sourcing projects:Projects involving exporters from different countries and, inmany cases, with multinational financing.
Offer of cover:Declaration of intent to provide cover subject to the conditionthat the factual and legal basis of the transaction does notchange (transaction earmarked for cover).
Parallel insurance:When the various suppliers in a multi-sourcing project eachhave their own payment claims against a foreign buyer, eachsupplier insures his receivables against loss with his ownnational export credit agency.
Paris Club:International association of official creditors which restruc-tures the debt of countries experiencing payment difficulties.The debt treatment refers almost exclusively to officially guaranteed commercial debt, i.e. guaranteed in particular bythe governments of the creditor countries and developmentaid loans. The Paris Club has no organisational structure withwritten statutes. The procedural guidelines have beendeveloped over the course of time and are amended whenand as necessary (cf. "Club of London").
Political risks:The origin of political risks is to be sought in measures orevents originating in the sphere of state authorities. In thecase of cover for amounts due for payment, such risks arepolitical circumstances which cause the insured accountsreceivable to become uncollectible, especially the generalpolitical cause of loss, which includes legislative or regulatoryactions and so-called chaos events such as war, civil unrestor revolution in foreign countries. The Federal Government further grants cover for the conversion and transfer risk, i.e.,the risk that amounts duly paid by the foreign buyer in localcurrency are not converted and/or not transferred due torestrictions on the international payment system betweencountries. Cover is also given for the risks of frustration of con-tract, when it becomes impossible to fulfil a contract and enti-tlements under it are lost, as well as the risk of loss of goodsbefore the passing of risk for reasons which can be attributedto political circumstances. If such a cause of loss seemslikely – just as in the case of the general political cause of loss– and the goods are sold elsewhere in such a situation, thenthe risk of a shortfall in the proceeds realized is also insured.In the case of manufacturing risk cover the political risksinsured comprise the political circumstances abroad whichlead to the cessation of manufacture or to non-shipment, aswell as embargos imposed under the export law and by anythird countries which may be involved.
Project financing schemes:Are applied to complex export transactions where the projectitself generates sufficient income to cover the operating costs and the debt service for borrowed funds.
Protracted default: Non-payment which persists for a longer period. If an amountowed by a foreign buyer is not settled within a period of, normally, six months after due date, this is considered to constitute protracted default. In the case of the buyer credit cover facility the waiting period is reduced to one month.
Reinsurance:Using the reinsurance model, projects involving exportersfrom different countries (multi-sourcing-projects) can be cov-ered by a single export credit insurer, so that the main suppli-er and the financing bank only have to deal with one partner.The risk is shared between the parties to the reinsuranceagreement according to the national percentages of goodsdelivered.
Special Drawing Rights:The Special Drawing Right (SDR) is a form of artificial currencyunit used by the International Monetary Fund (IMF). Theexchange rate is defined by a basket of currencies comprisingthe US dollar, the euro, the pound sterling and the yen.
Statutory maximum exposure limit:Maximum amount stated in the Federal Budget Act up towhich liability in the form of issued export guarantees may beaccepted. The Federal Office for Central Services and Unre-solved Property Issues (BADV) keeps a record of the totalamount of the issued export guarantees und monitors the uti-lization of the statutory maximum exposure limit.
Structured finance transaction: The financing of an export transaction in which, due to insufficient or non-assessable creditworthiness of the foreigndebtor, and because conventional security instruments (payment guarantee, letter of credit) are not available, otherelements are included in the construction to ensure serviceof the debt, such as the proceeds of offtake agreements.
Total outstanding risk of the Federal Government: The country risk statistics reflect the debt owed by individualcountries (including interest) to the Federal Government andthe amount which would actually have to be indemnified bythe Federal Government under the export guarantees issued.
Uninsured percentage:Exporter’s share in the loss in an event of loss, normally 5%for political risks and 15% for commercial risks and protracteddefault. For wholeturnover policies, it is 10% for commercialrisks. Until the end of 2016 the uninsured percentage agreedin supplier credit cover and wholeturnover policies for com-mercial risks can be reduced to 5% against the payment of apremium surcharge. In the case of buyer credit cover, theuninsured percentage is 5% for all risks, for manufacturingrisk cover it is also 5% and for wholeturnover policies light itis 10% for all risks.
federal export credit guarantees at a glancein million eur
Statutory cover limit
Cover applications (volume)
Small and medium-sized enterprises(share of exporters supported with guarantees in %)
New Business
Covered export volume
of which for
emerging economies and developing economiesindustrialised countries
Covered exports for EU countries
Covered volume as % of total exports
Results
Revenues from
Premiums and fees
Recoveries
from political claimsfrom commercial claims
Other income
Expenses for
Claims paid
for political claimsfor commercial claims
Management fee
Annual Result
*
**
******
2014
165,000
38,615
74.2
24,750.8
20,687.2
4,063.6
1,311.0
2.2
598.1
299.8
181.4
118.4
0.1
504.0
288.4
215.5
84.7
309.3
Accrued Result (since 1951)
Amounts subrogated to Federal Goverment
3,874.4
4,398.3
2015
160,000
38,156
75.4
25,832.2
19,310.6
6,521.6
2,266.4
2.2
541.8
285.7
153.3
132.5
0.8
395.1
94.9
300.1
89.6
343.7
4,218.0
4,444.5
* Including buyer credits
** Firms with up to 500 employees
*** Classfication of countries see p. 85
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 2
definitions and explanations
Arrangement (OECD Consensus):The Arrangement is a "Gentlemen’s Agreement" between theOECD members which lays down certain minimum and maxi-mum terms permissible for officially supported export creditswith a maturity of more than 2 years. The Arrangment aims atcreating a level playing field for the exporters and avoidingfinancing competition which would place an unnecessary burden on national budgets.
Ceiling:For countries where cover facilities have been restricted forrisk management reasons, an amount of cover is fixed whichplaces a limit on the maximum amount for which guaranteescan be issued, i.e., a ceiling is established. As a rule, such ceilings apply to transactions with repayment terms of morethan 12 months.
Club of London:The uncovered loans granted by commercial banks arerescheduled by the banks on their own initiative (cf. alsoParis Club).
Coinsurance:When the primary supplier passes on his foreign risks to thesubcontractor, e.g. when the latter only gets paid when theforeign buyer has paid the primary contractor, an applicationcan be made for so-called coinsurance. Among EU memberstates, this is regulated by a directive from the Council. Thereare bilateral agreements with other credit insurers. Besidesthis, there is the option of concluding a coinsurance agree-ment with other state export credit agencies covering just asingle transaction.
Commercial risks:Commercial risks are mainly insured under the cover given forthe credit and manufacturing risks involved in export contracts with private buyers. In the case of credit risk, the insured event is the uncollectability of insured accounts receivable as a result of the insolvency of the foreign buyer,as well as his simple non-payment after the expiry of a certainperiod (protracted default). In manufacturing risk cover, thecommercial risks recognized as insured are also the occurrenceof buyer insolvency during the manufacturing period, theunlawful repudiation of the contract by the buyer as well asnon-payment of cancellation costs if the contract was lawfully cancelled.
Environmental and social audit:The Recommendation of the Council on Common Approachesfor Officially Supported Credits and Environmental and SocialDue Diligence (Common Approaches) essentially forms thebasis for the assessment of environmental and social risks ofprojects abroad, in which German exporters are involved assuppliers.
Exposure: Total commitment level of the Federal Government bookedagainst the maximum exposure limit or the commitmentunder an individual export credit guarantee.
Interministerial Committee:Decides on matters of principle and on the availability of cov-er for individual transactions. The Federal Ministry for Eco-nomic Affairs and Energy takes the decisions on the coverapplications with the approval of the Federal Ministry ofFinance, in agreement with the Federal Foreign Office and Federal Ministry for Economic Cooperation and Development,and with the assistance of the mandataries and experts.
Marketable risks:With effect from 2002, the political and commercial risks aris-ing out of export transactions with credit periods of up to twoyears in EU countries as well as core OECD countries are con-sidered to be marketable risks. In line with the principle ofsubsidiarity, state cover is therefore no longer available forsuch risks. The new EU Commission Communication whichcame into force on 1 January 2013 regulates up to 2018 theprocedure under which a country may be classified as tem-porarily non-marketable if and when sufficient cover is notavailable from the private credit insurers.
Multi-sourcing projects:Projects involving exporters from different countries and, inmany cases, with multinational financing.
Offer of cover:Declaration of intent to provide cover subject to the conditionthat the factual and legal basis of the transaction does notchange (transaction earmarked for cover).
Parallel insurance:When the various suppliers in a multi-sourcing project eachhave their own payment claims against a foreign buyer, eachsupplier insures his receivables against loss with his ownnational export credit agency.
Paris Club:International association of official creditors which restruc-tures the debt of countries experiencing payment difficulties.The debt treatment refers almost exclusively to officially guaranteed commercial debt, i.e. guaranteed in particular bythe governments of the creditor countries and developmentaid loans. The Paris Club has no organisational structure withwritten statutes. The procedural guidelines have beendeveloped over the course of time and are amended whenand as necessary (cf. "Club of London").
Political risks:The origin of political risks is to be sought in measures orevents originating in the sphere of state authorities. In thecase of cover for amounts due for payment, such risks arepolitical circumstances which cause the insured accountsreceivable to become uncollectible, especially the generalpolitical cause of loss, which includes legislative or regulatoryactions and so-called chaos events such as war, civil unrestor revolution in foreign countries. The Federal Government further grants cover for the conversion and transfer risk, i.e.,the risk that amounts duly paid by the foreign buyer in localcurrency are not converted and/or not transferred due torestrictions on the international payment system betweencountries. Cover is also given for the risks of frustration of con-tract, when it becomes impossible to fulfil a contract and enti-tlements under it are lost, as well as the risk of loss of goodsbefore the passing of risk for reasons which can be attributedto political circumstances. If such a cause of loss seemslikely – just as in the case of the general political cause of loss– and the goods are sold elsewhere in such a situation, thenthe risk of a shortfall in the proceeds realized is also insured.In the case of manufacturing risk cover the political risksinsured comprise the political circumstances abroad whichlead to the cessation of manufacture or to non-shipment, aswell as embargos imposed under the export law and by anythird countries which may be involved.
Project financing schemes:Are applied to complex export transactions where the projectitself generates sufficient income to cover the operating costs and the debt service for borrowed funds.
Protracted default: Non-payment which persists for a longer period. If an amountowed by a foreign buyer is not settled within a period of, normally, six months after due date, this is considered to constitute protracted default. In the case of the buyer credit cover facility the waiting period is reduced to one month.
Reinsurance:Using the reinsurance model, projects involving exportersfrom different countries (multi-sourcing-projects) can be cov-ered by a single export credit insurer, so that the main suppli-er and the financing bank only have to deal with one partner.The risk is shared between the parties to the reinsuranceagreement according to the national percentages of goodsdelivered.
Special Drawing Rights:The Special Drawing Right (SDR) is a form of artificial currencyunit used by the International Monetary Fund (IMF). Theexchange rate is defined by a basket of currencies comprisingthe US dollar, the euro, the pound sterling and the yen.
Statutory maximum exposure limit:Maximum amount stated in the Federal Budget Act up towhich liability in the form of issued export guarantees may beaccepted. The Federal Office for Central Services and Unre-solved Property Issues (BADV) keeps a record of the totalamount of the issued export guarantees und monitors the uti-lization of the statutory maximum exposure limit.
Structured finance transaction: The financing of an export transaction in which, due to insufficient or non-assessable creditworthiness of the foreigndebtor, and because conventional security instruments (payment guarantee, letter of credit) are not available, otherelements are included in the construction to ensure serviceof the debt, such as the proceeds of offtake agreements.
Total outstanding risk of the Federal Government: The country risk statistics reflect the debt owed by individualcountries (including interest) to the Federal Government andthe amount which would actually have to be indemnified bythe Federal Government under the export guarantees issued.
Uninsured percentage:Exporter’s share in the loss in an event of loss, normally 5%for political risks and 15% for commercial risks and protracteddefault. For wholeturnover policies, it is 10% for commercialrisks. Until the end of 2016 the uninsured percentage agreedin supplier credit cover and wholeturnover policies for com-mercial risks can be reduced to 5% against the payment of apremium surcharge. In the case of buyer credit cover, theuninsured percentage is 5% for all risks, for manufacturingrisk cover it is also 5% and for wholeturnover policies light itis 10% for all risks.
federal export credit guarantees at a glancein million eur
Statutory cover limit
Cover applications (volume)
Small and medium-sized enterprises(share of exporters supported with guarantees in %)
New Business
Covered export volume
of which for
emerging economies and developing economiesindustrialised countries
Covered exports for EU countries
Covered volume as % of total exports
Results
Revenues from
Premiums and fees
Recoveries
from political claimsfrom commercial claims
Other income
Expenses for
Claims paid
for political claimsfor commercial claims
Management fee
Annual Result
*
**
******
2014
165,000
38,615
74.2
24,750.8
20,687.2
4,063.6
1,311.0
2.2
598.1
299.8
181.4
118.4
0.1
504.0
288.4
215.5
84.7
309.3
Accrued Result (since 1951)
Amounts subrogated to Federal Goverment
3,874.4
4,398.3
2015
160,000
38,156
75.4
25,832.2
19,310.6
6,521.6
2,266.4
2.2
541.8
285.7
153.3
132.5
0.8
395.1
94.9
300.1
89.6
343.7
4,218.0
4,444.5
* Including buyer credits
** Firms with up to 500 employees
*** Classfication of countries see p. 85
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 2
annual report 2015
ann
ual
rep
ort
exp
ort
cre
dit
gu
aran
tees
of
the
fed
eral
rep
ubl
ic o
f g
erm
any2015
Including Untied Loan
Guarantees
head office
Euler Hermes Aktiengesellschaft
Gasstraße 27
22761 Hamburg
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
department berlin
Friedrichstadt-Passagen
Quartier 205
Friedrichstraße 69
10117 Berlin
Phone: +49 (0)30 / 20 94 - 53 10
Fax: +49 (0)30 / 20 94 - 53 20
branch offices
10117 Berlin
Friedrichstraße 69
60596 Frankfurt
Theodor-Stern-Kai 1
Etage 8 Bauteil A
22761 Hamburg
Gasstraße 27
50672 Köln
Hohenzollernring 31-35
81373 München
Radlkoferstraße 2
70597 Stuttgart
Löffelstraße 44
Export Credit Guarantees of the Federal Republic of Germany
For all branch offices:
Phone: +49 (0) 40/ 88 34-90 00
Fax: +49 (0) 40/ 88 34-9141
<<< please turn overleaf for definitions and explanations
www.agaportal.de
Euler Hermes AktiengesellschaftExport Credit Guarantees of the Federal Republic of Germany
Postal address
22746 Hamburg, Germany
Office address
Gasstraße 27
22761 Hamburg, Germany
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
Branch offices: Berlin, Frankfurt,
Hamburg, Cologne, Munich, Stuttgart
09
23
06
05
16
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 1
annual report 2015
ann
ual
rep
ort
exp
ort
cre
dit
gu
aran
tees
of
the
fed
eral
rep
ubl
ic o
f g
erm
any2015
Including Untied Loan
Guarantees
head office
Euler Hermes Aktiengesellschaft
Gasstraße 27
22761 Hamburg
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
department berlin
Friedrichstadt-Passagen
Quartier 205
Friedrichstraße 69
10117 Berlin
Phone: +49 (0)30 / 20 94 - 53 10
Fax: +49 (0)30 / 20 94 - 53 20
branch offices
10117 Berlin
Friedrichstraße 69
60596 Frankfurt
Theodor-Stern-Kai 1
Etage 8 Bauteil A
22761 Hamburg
Gasstraße 27
50672 Köln
Hohenzollernring 31-35
81373 München
Radlkoferstraße 2
70597 Stuttgart
Löffelstraße 44
Export Credit Guarantees of the Federal Republic of Germany
For all branch offices:
Phone: +49 (0) 40/ 88 34-90 00
Fax: +49 (0) 40/ 88 34-9141
<<< please turn overleaf for definitions and explanations
www.agaportal.de
Euler Hermes AktiengesellschaftExport Credit Guarantees of the Federal Republic of Germany
Postal address
22746 Hamburg, Germany
Office address
Gasstraße 27
22761 Hamburg, Germany
Phone: +49 (0)40/88 34-90 00
Fax: +49 (0)40/88 34-91 75
www.agaportal.de
Branch offices: Berlin, Frankfurt,
Hamburg, Cologne, Munich, Stuttgart
09
23
06
05
16
WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 1