ECA-covered financing
Financing under the cover of Export Credit Agencies (ECA) is a form of attracting resources from foreign financial institutions on long term basis, regulated by OECD Consensus (scheme).
In terms of long term tied financing JSC «Belagroprombank» has the possibility to provide long term loans for financing of deliveries of imports from Poland, Germany, Hungary, Russia, Czech Republic, Italy, Slovakia, Austria, Bulgaria, Slovenia, Denmark, Switzerland, France, Finland and other countries.
One of the main conditions for providing long term loan facility from foreign institution is obtaining of the insurance cover of Export Credit Agency (KUKE, BAEZ, Euler-Hermes, SACE and others). The insurance premium is to be paid by the importer. It is possible to include insurance costs into the loan amount. Otherwise, insurance costs may be compensated by foreign institution by interest rate increase.
Main terms and conditions required for implementation of such kind of financing:
- form of settlements - unconfirmed letter of credit;
- financing is available for up to 5 years (for large amounts 8-10 years);
- interest rate does not exceed the average interest rate for credits granted by Belarusian banks in foreign currency;
- payment of expenses related to ECA cover;
- foreign trade contract must be brought in line with the funding scheme indicating the payer of insurance premium (terms of the contract should contain that financing of the letter of credit is provided under the ECA cover);
- minimum 15 % down payment needed.
