At the Export-Import Bank Annual Conference on Thursday, March 11, agency officials announced a new initiative, named “Solar Express,” which will provide streamlined project financing to small solar power producers considering projects abroad using products and services from the United States.

By way of background, the Export-Import Bank is the official export credit agency of the United States and its mission is to assist in financing the export of US goods and services to international markets. This federal agency provides working capital guarantees
(pre-export financing); export credit insurance; and loan guarantees and direct loans (buyer financing). Historically, more than 85 percent of its transactions have involved small businesses.

Under this new initiative, the Export-Import Bank will be able to support solar project developers abroad who are planning on sourcing between $3 million and $10 million in solar panels and related products and services from US companies. Traditional Export-Import Bank project finance transactions usually involve exports in excess of $25 million or more, often require the hiring of expensive financial advisors, and routinely take several months to process given their complexity. In the Solar Express program, the Export-Import Bank is committing to processing applications for loan guarantees in as little as 60 days. Financing terms could be as long as 18 years, depending on the project’s economics. According to one agency official, the Bank has gotten comfortable with many elements of smaller solar power projects in terms of assessing creditworthiness and believes that this sector warrants special streamlined due diligence for loan guarantee applications.

Typically, the Export-Import Bank’s limited recourse project finance is an arrangement in which the Export-Import Bank lends to newly created project companies and looks to the project's future cash flows as its source of repayment instead of relying directly on foreign governments, financial institutions or established corporations for repayment of the debt. In the case of small solar power projects, the future cash flows would need to be a long-term contract for offtake of the electricity generated.

Under its statute, the Export-Import Bank is supposed to prioritize the export of renewable energy products, services, and technologies. The Solar Express initiative is the latest in a number of such efforts to stimulate exports in this sector.

If you have any questions about the Solar Express initiative or the Export-Import Bank generally, please contact Dan Renberg in the Government Relations practice group at Arent Fox, LLP.

Dan Renberg
dan.renberg@arentfox.com
202-857-6386

Dan Renberg is the co-manager of the Government Relations practice group and served on the Board of Directors of the Export-Import Bank of the United States from 1999-2003. Among his responsibilities as a member of the Board was to help coordinate the agency’s renewable energy exports policies and initiatives.