Sensu stricto project finance where financing of a project is entirely guaranteed by its revenue is rare in china. Fortune times building, 11 fenghuiyuan, xicheng district, beijing33, china. The equator principles eps is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence and monitoring to support responsible risk decisionmaking. An international sponsor on its usd 800 million financing of a 300 mw coalfired power project in zambia, including the negotiation of all project and finance documents, with the project financing using dfi and sinosure covered tranches which would be the first sinosure covered project financing in africa. Like three other leading insurance companies in china, sinosure has a quasiministerial status, implying among other things that its top managers are appointed by the central government. Power and transmission services dla piper global law firm. Protects investors and financial institutions from economic losses resulting.
Pdf project finance in theory and practice enrique. Sinosure and standard chartered signed mou for deepened. While no specific transactions have been earmarked for. Standard chartered and sinosure sign belt and road. The financing involves a sinosure covered financing from major chinese banks and potentially other international banks and will be the first sinosure covered project finance in africa, representing a major breakthrough in the way in which these projects can be financed in the future. Siemens supports power projects in bangladesh with. In china, sinosure has, besides beijing headquarter, a service network of 12 branches and 7 business offices nationwide. Meanwhile, sinosure is the official export credit insurance arm of the. The financing structure included eca cover provided by five ecas consisting of bpifrance, sace, kexim, ksure and sinosure funding from 17 commercial banks, and a direct. Project finance vs corporate finance project finance corporate finance limited recourse or nonrecourse loan to an spv full recourse more extensive lender risk ie. Nearly all chinese companies that provide credit to foreign businesses do so because their invoices are insured by sinosure.
This includes short, medium and longterm export credit insurance. We have been working with export credit agencies ecas for. Cutthrough clauses are prohibited under chinese law. This guide looks at the use of project financing techniques, in particular. Report on the project financing of sasan power limited. This note analyses the functioning of chinese export finance activities and their potential implications for oecd members and chinas partner developing countries. Tapping chinese belt and road capital for power projects. An international sponsor on its usd 800 million financing of a 300 mw coalfired power project in zambia, including the negotiation of all project and finance documents, with the project financing using dfi and.
Position of and perception on sinosure 3 time to learn from the asian experience update of the oecd shipping and project finance arrangement according to the needs in the shipping and offshore sector i. Sinosure offers coverage against political risks, commercial and credit risks. Citi has helped all kinds of users arrange official agency finance, from. Strategies to using official agency finance to maximize benefit depending on the customers objectives, official agency financing can confer a number of benefits. This assessment is based on qualitative information gathered.
Project finance may come from a variety of sources. Institutions, incentives and development by kathryn gordon this paper provides information on institutional features and policy practices of investment. More recently, sinosure has offered i credit support to chinese com. With the project and export finance worlds coming into ever closer contact, this panel explores the interplay between ecas. Sinosure is the national export agency of the peoples republic. Shipping finance from the perspective of eca marine money. Apr 23, 2014 while early stage venture capital remains a key source of fundamental technology innovation, in the current economy, middlemarket project finance more on the difference between project and venture capital, particularly in deploying clean technologies, continues to deliver. The newly created company usually has the minimum equity. What is clear is that the enigmatic chinese eca is providing more support than ever before and its cheaper too.
Sinosure yang tianfu, chief accountant, powerchina international group limited aashish pitale group treasurer essar services india yong jin oh, senior manager, project planning team, ksure kisu lee, deputy director, natural resources finance dept. Its mlt and investment insurance policies are issued on behalf of the ministry of finance. Under this financing method, company may repay principal with interest for loans completely depending on operating efficiency of. Sinosure is a massive chinabased export and credit insurance company, as explained by wikipedia. Network our network goes around all over china as well as the globe. Export credit agencies and political risk insurers in. Kexim dario liguti managing director, head of international export finance. Dec 09, 2016 sensu stricto project finance where financing of a project is entirely guaranteed by its revenue is rare in china. Analysis on the functions of policy oriented export. Financing global copper project acquisition and development overview and trends of the mining house capital toolbox potential alternatives corporatelevel, projectlevel, other loans and hybrids, offtake.
Abn amro has signed an agreement with sinosure which will help the chinese export credit agency boost its funding for shipping and offshore drilling. An export credit agency known in trade finance as an eca or investment insurance agency is a private or quasigovernmental institution that acts as an intermediary between national governments and exporters to issue export insurance solutions, guarantees for financing. Underlining our strengths in structured and project finance and. Sinosure is a statefunded policyoriented insurance company which provides export credit insurance for the development of chinas foreign trade and economic growth. However, project financing is a specialised funding structure that relies on the future cash flow of a project as primary source of repayment, and holds the project s assets, rights and interests as collateral. Assessment of credit risk in project finance article pdf available in journal of construction engineering and management 411 november 2008 with 4,158 reads how we measure reads. Oct 26, 2018 specifically, by collaborating with citic and sinosure, we will be able to provide our clients with the latest local economic and business information as well as with a range of financial services, including trade finance and project finance.
Tapping chinese belt and road capital for power projects rope mediterranean sea frica central sia ndian cean soth sia soth ast sia china soth china ea rssia persian lf 02 norton rose fulbright january. Sinosure the chinese unknown player for foreign companies. Position of and perception on sinosure 3 time to learn from the asian experience update of the oecd shipping and project finance arrangement according to the needs in the shipping and offshore sector. Sinosure, china development bank, and china agricultural development. Tapping chinese belt and road capital for power projects rope mediterranean sea frica central sia ndian cean soth sia soth ast sia china soth china ea rssia persian lf 02 norton rose fulbright january 2016 tapping chinese belt and road capital for power projects.
Report on the project financing of sasan power limited office of inspector general exportimport bank of the united states. Infrastructure finance services dla piper global law firm. Under this financing method, company may repay principal with interest for loans completely depending on operating efficiency of the project. Meanwhile, sinosure is the official export credit insurance arm of. Nearly all chinese companies that provide credit to foreign. Citis export and agency finance team advises our clients in how to leverage these benefits to their maximum advantage. Hopefully, youll never experience a career setback such as a multibillion dollar failed project, but it is likely that youll incur one or two hiccups at some point along the way. Meanwhile, the lending bank must gain property guarantee from projects assets in order to guarantee its own interest. For a discussion of the documents typically entered into in a project finance transaction, see practice note, project finance. Investment guarantees and political risk insurance. Its services and products have developed extensively as well as intensively in the subsequent years. The facility will fund the construction of two 150 megawatt mw coal fired power plants at the maamba coal mine in the southern african country, along with a new transmission line to connect the stations to the national grid.
Sinosure appears to be following a more aggressive mandate, although policy details are sketchy and the agency claims it is natural progress. The project did not meet certain affirmative covenants. In september 2001, sinosure succeeded picc to be a member of the berne union in december 2002, sinosure debt collection division was established to provide services to policyholders, ecas, and. Im not owner of the book, i am sharing in order to provide knowledge. The main sources include equity, debt and government grants. Sinosure deal confirms big plans for chinese shipping. Specifically, by collaborating with citic and sinosure, we will be able to provide our clients with the latest local economic and business information as well as with a range of financial services. The term project finance is generally used to refer to a nonrecourse or limited recourse financing structure in which. Financing from these alternative sources have important implications on project s overall cost, cash flow, ultimate liability and claims to project incomes and assets. Gener ally, the sponsors create a special purpose, legally independent company in which they are the principal shareholders. The collaboration will include but not limited to project and export finance, syndicated finance, trade finance, etc.
Sinosure yang tianfu, chief accountant, powerchina international group limited aashish pitale group treasurer essar services india yong jin oh, senior manager, project planning. List of projects to which china has provided public financing. Sinosure will share with you the latest credit insurance structure, claim procedures and documentation of sinosure. From our analysis, it emerges that over the past decades, chinas policy banks china eximbank, sinosure, china development bank, and china agricultural development bank have. Financing and structuring powerfinancing and structuring. Export finance activities by the chinese government european union. The financing structure included eca cover provided by five ecas consisting of bpifrance, sace, kexim, ksure and sinosure funding from 17 commercial banks, and a direct loan from kexim.
An export credit agency known in trade finance as an eca or investment insurance agency is a private or quasigovernmental institution that acts as an intermediary between national governments and. This includes short, medium and longterm export credit insurance, investment insurance, bond and guarantee business, debt and capital retrieval business and credit assessment business. Financing via export and agency finance eca characteristics and benefits. Project finance project f inancing uses the project s assets andor future rev enues as the basis for r aising funds. August 2018 this page was updated with the latest version of the guide in august 2018. The equator principles eps is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily. Insurance companies that have provided policies for project finance transactions commonly seek reinsurance. Smbc has been actively collaborating with sinosure in various projects such as trade finance and project finance.
Pivotal role for hk in bri infrastructure financing hong. Spreading the umbrella sinosure appears to be following a more aggressive mandate, although policy details are sketchy and the agency claims it is natural progress. Insurance companies that have provided policies for project finance. Open account trade finance international commerce centre. Leveraging official agency financing to your advantage. China export and credit insurance corporation wikipedia. In september 2001, sinosure succeeded picc to be a member of the berne union in december 2002, sinosure debt collection division was established to provide services to policyholders, ecas, and later all kinds of organizations.
Mizuho concludes memorandum of understanding for business. Exportimport bank of the united states exim bank as it relates to the medium and longterm programs during calendar year 2004. Inta fwc 2009 01 lot7 15 final layoutsh european parliament. The largest eca involvement came from sinosure, which supported the chinese banks including the exportimport bank of china. While early stage venture capital remains a key source of fundamental technology innovation, in the current economy, middlemarket project finance more on the difference between. Citic, and china export credit insurance corporationsinosure have concludeda memorandum of understandingmou for business cooperation for the purpose of trilateral. Growth of sinosures export credit and investment insurance activities 2008 20. Sinosure, shared sinosures experiences in easing the credit risks. In addition, sfs demonstrated strong project support acting as one of only two international lenders participating in the sinosure tranche. Advantages of eca finance 15 3 2 1 underwriting policy. Open account trade finance product comparison, transaction structuring. The financing involves a sinosurecovered financing from major chinese banks and potentially other international banks and will be the first sinosurecovered project finance in africa, representing a. International project financing export credit agencies general an export credit agency commonly referred to as an eca is a national governmentowned.