May 2, 2019

Export Credit Agencies and Political Risk Insurers in International Project Financing

Export Credit Agencies – General Germany, the predecessor to the present ECA was established in 1917, and the Export– An Export Credit Agency (commonly referred Import Bank of the United States was founded to as an ECA) is a national government-owned in 1934. In the aftermath of World War II, ECAs or affiliated entity that supports the export of were established in Austria in 1946 and Japan domestic goods and services by providing in 1951. From the early 1970s to the late financing to foreign purchasers of such goods 1990s, a number of additonal countries in the and services. The fundamental purpose of an Middle East and Asia created ECAs, including ECA is to increase the volume of exports from Iran in 1973, Korea in 1976, India in 1983, domestic producers of goods and services by Egypt in 1992 and China in 1994. More opening overseas markets for such products recently, new or smaller countries have through the provision of financing and other established their own ECAs, including Serbia risk-reducing products. ECA-supported goods and Sudan in 2005, Estonia in 2009 and and services can range from large capital Armenia in 2013. goods—such as aircraft, satellites or Today, there are almost 80 countries that have locomotives—to finished industrial products, established ECAs or some variation of national such as solar panels, wind turbines, pumps export support or credit insurance agencies. (A and engines and even further to “soft” exports list of many of these ECAs, export credit that can include legal, engineering, technical insurers and similar entities is attached as and other services. In a nutshell, ECAs support Annex A). the expansion of foreign trade by their national exporters and service providers. In doing so, of course, they also support ECA Risk Mitigation domestic employment. The principal benefit of an ECA is to mitigate ECAs have a long history that is intertwined risks associated with international trade with the expansion of economies and transactions. Cross-border trade in goods and governmental policies to promote national services includes a variety of risks for both exports. The first official ECA, the English buyers and sellers, including credit risks Credit Guarantee Department (ECGD), was related to payment for goods, as well as established in the United Kingdom in 1919. In political risks associated with the transit and delivery of goods across borders, often at foreign buyer, assisting their purchase of great distances. Such risks are not new, and the supplier’s goods or services. trade participants in ancient Rome faced the  In a Buyer’s Credit, the ECA loan or same fundamental question as do modern- guarantee is made to or benefits the foreign day traders in Asia: when does the risk buyer, allowing the buyer to finance its associated with a given transaction outweigh purchase of the domestic exporter’s goods its desirability? Furthermore, if risk for a or services. transaction is deemed too high by the entities Typical financing period terms for ECA to whom exporters and traders often turn to products are short-term (less than two years), assist them—namely, banks and insurers— medium-term (two to five years) and long- trade and exports can suffer as these term (over five years and usually 12-15 years). transactions are deferred or avoided altogether due to risk concerns. 1 Typical Structures In mitigating inherent political and payment risk, ECAs enhance the ability of market ECA participation in major project financing participants to transact—whether they are transactions generally use Buyer’s Credit sellers, buyers or financiers. ECA programs structures and are on a long-term (10-15 year) provide direct finance or guarantees of bank basis. In this way, the project company/ finance, and if not providing direct political borrower established for the project financing risk insurance, they can still provide an implicit can borrow the ECA loan (or borrow from political risk “umbrella” due to their very banks guaranteed by the ECA) and can pair presence in the transaction. the ECA-supported financing with other project debt borrowed by the project As project finance structures are company, thereby assembling a complete fundamentally designed around the principles financing package for the project with long of risk identification, allocation and mitigation, repayment tenor, enhancing project and ECAs play a key role in the risk-reduction sponsor return. goals of the participants. The most commonly used ECA structures in Products and Services2 project financings are illustrated below: EXHIBIT 1 – ECA DIRECT LOAN STRUCTURE Although product offerings have variations among the many ECAs, typically ECAs offer the following:  Direct Loans;  Loan Guarantees; and  Export Credit Insurance.3 In addition, ECA products can be offered on either a “Supplier’s Credit” or “Buyer’s Credit” basis, with the difference being:  In a Supplier’s Credit, the ECA loan or guarantee is made to or benefits the domestic exporter (the supplier of the goods or services) and the supplier is then able to provide financing terms to the

2 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing In the Direct Loan structure, the ECA makes a may obtain support from the ECAs of the direct loan to the foreign project company to United States, Germany, Italy and Korea, if the support the purchase by the project company German contractor sources equipment from of the exports supplied under the goods and manufacturers in each such country. services supply agreement between the project company and the domestic exporter(s) LOCAL COST from the ECA country. Project financings inevitably result in certain costs being incurred in the host country. For EXHIBIT 2 – ECA GUARANTEED LOAN STRUCTURE example, site preparation, concrete and steel installation and other such activities will require local labor, equipment and supplies. Such project-related costs incurred in the project borrower’s country are referred to as “local costs.” ECAs will often provide credit support for a fixed percentage of local costs in addition to the national export costs they are financing. This support provides project borrowers with an ability to obtain credit from ECAs for a larger portion of the overall project financing needs, improving project economics by wrapping more of the total project debt into the ECA facilities. The Guaranteed Loan structure is very similar to the prior one, except that in this scenario COVERAGE PERCENTAGES AND TYPES the ECA provides a guarantee of loans made “Cover” is the credit exposure percentage of by a bank (or banks) to the project company the eligible goods and services that an ECA for its purchase of the exports supplied by the agrees to provide through its loan or domestic exporter(s) from the ECA country. guarantee to the project company borrower. Such percentages range from 80 to 100 Coverage Issues percent, depending on the ECA and the type of ECA program being employed. In addition, ECA COUNTRY CONTENT ECA programs can offer “comprehensive” Given that an ECA serves the purpose of cover (meaning both commercial and political supporting its home country’s own national risks are covered), “commercial” cover (which exports, there are domestic content excludes political risks) or “political risk” cover requirements that must be satisfied in order to (which excludes commercial risks). The optimal permit the ECA to provide a loan or goal for most projects is to maximize the guarantee. In project financings, usually the comprehensive cover percentage from the borrower/project company works with the involved ECA(s). Engineering, Procurement and Construction (EPC) contractors and other suppliers to Pricing ensure that domestic content rules are followed. Note that it is often the case that ECA pricing has multiple components: there will be products available from a variety  Interest rates – These will vary according to of sources; for example, a Moroccan project whether the ECA credit is a guarantee of company borrower using a German contractor commercial bank debt or a direct loan by

3 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing the ECA itself, and whether the loan is on a company. Policies can vary from ECA to ECA, fixed or floating-rate basis. and therefore project companies may often  Commitment fees – A fee expressed as a need to comply with a variety of such policies, percentage of the total loan or credit for example: exposure charged to compensate the ECA  Anti-bribery, anti-corruption and anti- for reserving (“committing”) its funds or money laundering credit exposure to the relevant financing  Environmental, social and corporate transaction for the requested tenor of the responsibility loan or support.  Gender equality and empowerment  Exposure fees/premia – A fee or premium expressed as a percentage assessed on each  Anti-terrorism disbursement of the loan or credit exposure  UN/international economic and political event, that compensates the ECA for the sanctions assessed risk associated with the  High carbon-intensity transaction. Exposure fee/premium  Military, security and “dual-use” equipment calculation components will generally include consideration of the host country of Governing and Coordinating the borrower, the nature of the transaction, the tenor of the loan or guarantee and International Organizations other risk features of the proposed transaction. THE OECD In addition, the Organisation for Economic In the same way that producers of similar Co-operation and Development (OECD) goods compete against each other, ECAs [discussed below] has established so-called compete against each other to provide “minimum premium benchmarks” that act to favorable credit terms to further promote their constrain overall fee rates charged by ECAs, by respective national exporters, to secure sales establishing a floor for such fee rates that can and expand foreign trade. Since the ECA- only be derogated from in specified supported exports in most project financings circumstances. are quite sizeable, the impact of the ECA fee and financing costs also can have a material impact on project economics, and ultimately Other Important Policies on sponsor return. The obvious potential ECAs typically require adherence to various downward spiral of increasingly competitive policies by the project, the contractors and ECA support packages would result in unfair suppliers and the project company and its competitive advantage benefitting the shareholders. This requirement reflects the national exporters whose ECA was willing to fact that ECAs are governmental entities and offer the most concessional terms, in turn are also subjected to significant attention by limiting buyer (i.e., project company/sponsor) NGOs (Non-Governmental Organizations) that choices. In this way, there is potential scope monitor their compliance with various codes for countries to use their ECA to unfairly and standards related to aspects of foreign subsidize their own exports through ECA direct investment in emerging markets. These credit terms (such as offering longer debt policies can have significant impact on project tenors, lower interest rates or other design, construction and operation, as well as concessional financing terms). The resulting on the business practices of the project effects would be to skew the market towards all-in price competition (i.e., for goods and

4 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing financing costs) and away from comparative Supplementing the Arrangement are six values of the actual goods produced by “Sector Understandings” that cover export differing national producers. credits in the area of (I) ships, (II) nuclear power plants, (III) civil aircraft, (IV) renewable To address these concerns, and more energy, climate change mitigation and generally to introduce transparency into the adaptation, and water projects, (V) rail ECA market, various countries—including the infrastructure and (VI) coal-fired electricity vast majority of the developed economies generation projects. These sectors have whose ECAs have very large combined market special technical, financial and national policy share in ECA-supported project financings— characteristics that warrant different treatment are participants in two international from other exports of goods and services organizations that focus on ECA-related addressed by the Arrangement. issues: the OECD and the Berne Union. In general, the Arrangement and the Sector The OECD was established in Paris in 1961 by Understandings are factored into the equation 18 European countries, the United States and by the ECA itself in connection with its overall Canada. Today, it has a membership of 36 consideration of a requested loan or countries, including a number of leading guarantee for a particular project and the emerging market countries, such as Mexico establishment of the various financial terms and Turkey. The stated mission of the OECD is that will apply to its offered financing to the to provide a forum for government to develop project company/sponsor. common economic policies on various issues, to establish international standards on various THE BERNE UNION goods, and to be a clearinghouse for reliable Unlike the OECD, which was formed by data on members’ global trade and national governments and whose members investment volumes, GNP, GDP, productivity are all States, the Berne Union is an and other economic metrics. international not-for-profit trade association, Since 1978, the OECD has administered the representing the global export credit and Arrangement on Officially Supported Export investment insurance industry.7 The Berne Credits (the Arrangement),4 which seeks to Union has more than 80 members that include level the playing field and eliminate (or ECAs’ private credit and political risk insurers severely limit) financial subsidies and potential and multilateral institutions that provide trade distortions. The Arrangement thus sets differing types of financial and insurance forth the most generous export credit terms support of cross-border trade. As of the date and conditions that may be offered by its of this writing, ECAs that are Berne Union participants.5 The Arrangement is a members are reflected on Annex A. “Gentlemen's Agreement” among its Berne Union members have significant market participants who represent most OECD impact—according to their 2017 statistics, member governments,6 and thus it is a members supported 14 percent of global voluntary arrangement and not legally cross-border trade under the equivalent of enforceable by its members. Ultimately, the US$2.35 trillion of trade financing and purpose of the Arrangement is a global trade insurance support.8 Of this total, US$179 system where exporters compete on the basis billion consisted of medium- to long-term of the price and quality of their products credits from ECAs. rather than the financial terms provided by their ECA, thus eliminating trade distortions Although the Berne Union is a private trade and subsidies. association and not a regulatory or

5 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing government organization, it provides a forum Sovereign Risk Insurance Ltd. and Zurich and clearinghouse for ECAs and trade insurers Insurance Group. to discuss policies and issues that affect their Although there are many public and private various products. As a result, the Berne Union entities providing PRI, in emerging market has an important role in the shaping of ECA project finance transactions the most policies that are implemented in the support significant providers are MIGA, the ECAs and of project finance transactions. the DFIs.

Political Risk Insurers – General PRI Form Project and infrastructure development and Typically, ECA political risk products are financing transactions face a multitude of referred to as political risk guarantees, risks. Certain of these risks can be addressed whereas the products offered by MIGA, DFIs by due diligence, contract terms or credit and the private market are referred to as support. Particularly in the emerging markets, political risk insurance. While there are legal risks related to political actors or occurrences distinctions between these two forms of can be very difficult to mitigate through such coverage and the associated mechanics for conventional approaches. In these cases, both claim and payment, these distinctions are not equity investors and debt providers can use relevant for this article. As a result, the term political risk guarantees or political risk “PRI” will be used here to refer to all forms of insurance to wholly or partially mitigate such this coverage, whether guarantee or risks and cover losses arising from such insurance. events. In the words of the World Bank’s political risk agency, the Multilateral 10 Investment Guarantee Agency (MIGA): PRI Risk Coverage “Political risk insurance (PRI) is a tool for PRI risk coverage can be obtained to address businesses to mitigate and manage risks the following types of risks that are of arising from the adverse actions—or common concern in project finance inactions—of governments.”9 transactions: Political risk mitigation products are offered  Expropriation: Losses arising from actions by many entities. In general, the market or inactions of the host government that consists of public agencies and private eliminate, deprive or reduce ownership providers. The public providers include and/or control over project assets or the multilateral agencies (such as MIGA), many project investment, including physical assets ECAs and so-called bilateral agencies or and shares in the project company. development finance institutions (DFIs). These  Currency Inconvertibility and Transfer DFIs are governmental agencies whose Restrictions: Losses arising from the purpose is to promote developmental inability or restriction of conversion of local objectives in the emerging markets. (host country) currency into foreign On the private side of the market, major currency, or on the transfer of foreign political risk providers include a variety of exchange outside the host country. insurance companies and associations, many  War and Civil Disturbance: Losses arising of which are “household names,” including from destruction or damage to project AIG, AXA XL, Chubb, Lloyd’s of London, assets caused by politically motivated acts

6 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing of war or civil disturbance in the host Typical PRI structures in project financings are country. illustrated below:

 Breach of Contract: Losses arising from a EXHIBIT 3 – POLITICAL RISK GUARANTEE OR host country’s breach or repudiation of a INSURANCE IS PROVIDED TO PROJECT LENDERS contract with the project.  Award Frustration: Losses arising from a host government’s non-payment of a binding arbitral or judicial decision.

Typical Structures PRI can be obtained by either the equity investors (sponsors) of a project or by the lenders. In general, equity coverage will focus on risks that deprive the investors of their ownership interests, value of the project assets or ability to repatriate dividends and/or profits. Lenders, who are not project owners and are fundamentally interested in recovery of their debt (principal and interest), will focus on coverage that provides timely repayment of their loans and financial exposure. In addition, a significant volume of PRI has been taken out to support capital markets In this structure, the project lenders have issuances (bonds), especially in circumstances secured PRI to provide credit support for the where the rating of the bonds would be repayment of their principal and interest in the limited by country risk concerns. In these event of covered political risk events adversely circumstances, PRI can be used to help bond affecting the project company’s ability to issuers to “pierce the sovereign ceiling” and make debt service payments. achieve an investment grade rating not EXHIBIT 4 – POLITICAL RISK GUARANTEE OR otherwise achievable due to political risk. INSURANCE IS PROVIDED TO THE SPONSOR(S)

Political Risk Guarantor or

PRI Guarantee or Sponsor(s)

Equity Ownership

Bank Project Lenders Company

Bank Loan Agreement

7 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing In this structure, the project sponsor(s) have Governing and Coordinating secured PRI to protect their equity investment and the enterprise value of the project and International Organizations project company in the event of covered ECAs that provide PRI are subject to the OECD political risk events affecting the value of their Arrangement’s terms discussed above. equity investment in the project. Also, as discussed above, the Berne Union Coverage Issues plays a prominent role in the dialogue among public and private PRI providers, and has more ECAs that provide PRI generally have coverage than 80 members actively supporting requirements and limitations that track those international trade and investment found in their financing programs discussed transactions, many of which are PRI providers. above. According to its recent statistics, in the first half of 2018, Berne Union members paid PRI providers that provide insurance products US$2.65 billion of total claims, with 53 percent typically have limitations of the following of such claims relating to medium- or long- types: term export transactions for capital goods and  Criteria regarding the eligibility of the infrastructure. investment (specific asset or equity interest) to be insured  Tenor of policy—most often from one to 20 years  Percentage of eligible investment that the policy will cover—generally, the policyholder is required to risk-share with the PRI provider by retaining some percentage of the risk of loss (for example, up to 90 percent of an eligible investment, with the investor retaining a 10 percent risk share)  Specific claims procedures requiring submission of documentation in specified time frames, exclusions to cover and, as a condition of payment, transfer and/or subrogation of the insurer of the insured’s covered investment.

Pricing PRI is priced on a premium basis, with premia calculations dependent on factors specific to the relevant investment, including country, sector, transaction type, nature of covered risks and coverage tenor.

8 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing ANNEX A

SELECTED GLOBAL ECAS AND EXPORT CREDIT INSURANCE/SUPPORT ENTITIES

BERNE UNION COUNTRY EXPORT CREDIT AGENCY MEMBER (Y/N) Argentina Banco de Inversión y Comercio Exterior N Armenia Export Insurance Agency of Armenia (EIAA) Y Australia Export Finance and Insurance Corporation Y (EFIC) Austria Oesterreichische Kontrollbank AG (OeKB) Y Bangladesh Sadharan Bima Corporation N

Belgium Credendo – Export Credit Agency Y Bosnia and Herzegovina Izozno Kreditna Agencija BiH N Brazil Brazilian Guarantees Agency N

Banco Nacional de Desenvolvimento N Econômico e Social

Bulgaria Bulgarian Export Insurance Agency Y Canada Export Development Canada (EDC) Y China The Export-Import Bank of China N

China Export and Credit Insurance Y Corporation (SINOSURE)

Colombia Bancóldex N Croatia Croatian Bank for Reconstruction and Y Development (HBOR) Czech Republic Česká Exportní Banka, a.s. N

Export Guarantee and Insurance Corporation N

Denmark Eksport Kredit Fonden (EKF) Y Egypt Export Credit Guarantee Company of Egypt Y Estonia KredEx Credit Insurance Ltd. Y

9 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing ANNEX A

SELECTED GLOBAL ECAS AND EXPORT CREDIT INSURANCE/SUPPORT ENTITIES

BERNE UNION COUNTRY EXPORT CREDIT AGENCY MEMBER (Y/N) Finland Finnish Fund for Industrial Cooperation Ltd. Y

Finnvera plc Y

France Bpifrance Assurance Export SFIL Y Germany Euler Hermes Y KfW (refinancing entity for Hermes- N covered loans)

KfW IPEX-Bank (support entity through ERP N Export Financing Program and Shipping CIRR Programme)

Greece Export Credit Insurance Organization Y Hong Kong Hong Kong Export Credit Insurance Y Corporation (HKEC) Hungary Hungarian Export-Import Bank plc (EXIM HU) Y India ECGC Limited Y Export-Import Bank of India N

Indonesia Indonesia Eximbank (LPEI) Y Iran Export Guarantee Fund of Iran Y Israel Ashra – The Israel Foreign Trade Risks Y Insurance Corp. Ltd. Italy SACE spa Y Jamaica The National Export-Import Bank of Jamaica Y (EXIM J) Japan Japan Bank for International Cooperation N (JBIC)

Nippon Export and Investment Insurance Y (NEXI)

Jordan Jordan Loan Guarantee Corporation (JLGC) Y Kazakhstan KazakhExport EIC JSC Y

10 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing ANNEX A

SELECTED GLOBAL ECAS AND EXPORT CREDIT INSURANCE/SUPPORT ENTITIES

BERNE UNION COUNTRY EXPORT CREDIT AGENCY MEMBER (Y/N) Korea, South Korea Eximbank (KEXIM) N

Korea Trade Insurance Corporation (KSURE) Y

Latvia JSC Development Finance Insurance Altum N Lebanon Lebanese Credit Insurer s.a.l. (LCI) Y Luxembourg Office du Ducroire (ODL) Y Macedonia Macedonian Bank for Development Y Promotion (MBDP) Malaysia Export-Import Bank of Malaysia Berhad Y (MEXIM) Mexico Banco Nacional de Comercio Exterior Y Netherlands Atradius Dutch State Business NV Y New Zealand New Zealand Export Credit Office (NZECO) Y Nigeria Nigerian Export-Import Bank N Norway Garanti-instituttet for eksportkreditt (GIEK) Y

EksportKreditt Norway N

Oman The Export Credit Guarantee Agency S.A.O.C. Y Poland Export Credit Insurance Corporation (KUKE) Y Portugal Companhia de Seguro de Crédito Y

Qatar Tasdeer (QDB) Y Romania EximBank Romania (EXIM R) Y Russia Export Insurance Agency of Russia (EXIAR) Y

Eximbank of Russia N

Saudi Arabia Saudi Arabia Export Program (SEP) Y

11 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing ANNEX A

SELECTED GLOBAL ECAS AND EXPORT CREDIT INSURANCE/SUPPORT ENTITIES

BERNE UNION COUNTRY EXPORT CREDIT AGENCY MEMBER (Y/N) Serbia Serbian Export Credit and Insurance Agency Y Singapore ECICS Limited Y Slovak Republic Export-Import Bank of the Slovak Republic Y (Eximbanka SR) Slovenia Slovene Export and Development Bank N South Africa Export Credit Insurance Corporation Y

Spain Compañía Española de Seguros de Crédito a Y la Exportación (ESCE) Sri Lanka Sri Lanka Export Credit Insurance Corporation Y (SLECIC) Sudan National Agency for Insurance and Finance of Y Exports (NAIFE) Sweden Exportkreditnämnden (EKN) Y

Svensk Exportkredit (SEK) N Switzerland Swiss Export Risk Insurance (SERV) Y Taiwan Export-Import Bank of the ROC N Thailand Export-Import Bank of Thailand (THAI Y EXIMBANK) Trinidad and Tobago Export-Import Bank of Trinidad and Tobago N Turkey Export Credit Bank of Turkey (TURK Y EXIMBANK) United Arab Emirates Export Credit Insurance Company of the N Emirates United Kingdom UK Export Finance (UKEF) Y Ukraine State Export-Import Bank of Ukraine (UKR Y EXIMBANK) United States Export-Import Bank of the United States (US Y EX-IM) Uzbekistan Uzbekinvest National Export-Import Y Insurance Company (UZBEKINVEST)

12 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing For more information about this topic, please contact the author, Barry N. Machlin. Barry N. Machlin 312 782 0600 [email protected]

Endnotes Mayer Brown is a distinctively global law firm, uniquely positioned to advise the world’s leading companies and financial institutions on their 1 From The Changing Role of Export Credit Agencies, Malcom most complex deals and disputes. With extensive reach across four Stephens, International Monetary Fund, 1999. continents, we are the only integrated law firm in the world with approximately 200 lawyers in each of the world’s three largest financial 2 This discussion and those that follow regarding coverage centers—New York, London and Hong Kong—the backbone of the and terms are drawn from the programs of a number of global economy. We have deep experience in high-stakes litigation and complex transactions across industry sectors, including our signature leading ECAs, including Bpifrance Assurance Export, Euler strength, the global financial services industry. Our diverse teams of Hermes of Germany, JBIC of Japan, Korea Eximbank, SACE lawyers are recognized by our clients as strategic partners with deep of Italy, UK Export Finance and U.S. Exim Bank. commercial instincts and a commitment to creatively anticipating their needs and delivering excellence in everything we do. Our “one-firm” 3 In this discussion we will focus on the loan and guarantee culture—seamless and integrated across all practices and regions— programs of the ECAs, as export credit insurance is not a ensures that our clients receive the best of our knowledge and major component of ECA participation in project finance experience. transactions. Please visit mayerbrown.com for comprehensive contact information for all Mayer Brown offices. 4 The Arrangement can be found at: Any tax advice expressed above by Mayer Brown LLP was not intended or written http://www.oecd.org/tad/xcred/theexportcreditsarrangeme to be used, and cannot be used, by any taxpayer to avoid U.S. federal tax penalties. If such advice was written or used to support the promotion or marketing nttext.htm. of the matter addressed above, then each offeree should seek advice from an independent tax advisor. 5 The Arrangement includes procedures for prior This Mayer Brown publication provides information and comments on legal notification, consultation, information exchange and review issues and developments of interest to our clients and friends. The foregoing is for export credit offers that are exceptions to or not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek legal advice before taking any action derogations of the rules as well as tied aid offers. with respect to the matters discussed herein. 6 The Arrangement participants are: Australia, Canada, the Mayer Brown is a global services provider comprising associated legal practices that are separate entities, including Mayer Brown LLP (Illinois, USA), Mayer Brown European Union, Japan, South Korea (Republic of), New International LLP (England), Mayer Brown (a Hong Kong partnership) and Tauil & Zealand, Norway, Switzerland and the United States. Chequer Advogados (a Brazilian law partnership) (collectively the “Mayer Brown Practices”) and non-legal service providers, which provide consultancy services 7 The formal name of the Berne Union is the International (the “Mayer Brown Consultancies”). The Mayer Brown Practices and Mayer Brown Consultancies are established in various jurisdictions and may be a legal person Union of Credit and Investment Insurers. Its web site can or a partnership. Details of the individual Mayer Brown Practices and Mayer be found at: http://www.berneunion.org/. Brown Consultancies can be found in the Legal Notices section of our website. “Mayer Brown” and the Mayer Brown logo are the trademarks of Mayer Brown. 8 These and other Berne Union Statistics come from The © 2019 Mayer Brown. All rights reserved. Bulletin, Berne Union Spring Meeting Newsletter, 19 March 2018 (available at http://cdn.berneunion.org/assets/Images/6345be17-145a- 4695-aaa1-44fa4980b71c.pdf). 9 https://www.miga.org/political-risk-insurance. 10 This discussion and those that follow regarding coverage and terms are drawn from the programs of a number of leading “official” PRI providers, including MIGA, OPIC, NEXI of Japan and KSURE of Korea.

13 Mayer Brown | Export Credit Agencies and Political Risk Insurers in International Project Financing