Ex-Im Bank Financing for Sub-Saharan Africa Exceeds $1 Billion for First Time
EX-IM BANK BOARD APPROVES $805 MILLION FOR KUSILE POWER PLANT IN SOUTH AFRICA, OVER $59 MILLION FOR RWANDAIR EXPRESS
WASHINGTON, May 26, 2011 /PRNewswire-USNewswire/ — The board of directors of the Export-Import Bank of the United States (Ex-Im Bank) voted today to approve an $805.6 million direct loan to South Africa’s state-owned electric power utility, Eskom, Limited. That action, plus today’s approval for over $59 million to enable Rwanda’s RwandAir Express to buy Boeing aircraft, brings Ex-Im Bank’s current fiscal year financing in sub-Saharan Africa to nearly $1.5 billion, nearly double the previous one year record of $812 million set during the fiscal year ending last September 30th.
Also contributing to this year’s record support for sub-Saharan Africa buyers of U.S. goods and services was Ex-Im financing for locomotive and steel coil sales to South Africa, crop dusters to Kenya, poultry equipment to Uganda, auto parts to Nigeria, and aircraft to Angola.
“Ex-Im Bank financing of U.S. export sales to sub-Saharan Africa represents our commitment to the region,” said Fred P. Hochberg, chairman and president of the Bank. “The world is rebuilding its critical infrastructure, and these types of opportunities are available to U.S. companies in developing areas of the world. We are ready to finance American exporters to win those sales and keep Americans working.”
“I think Ex-Im understands the opportunities that exist in Africa and is enlarging its footprint there,” said Ebrahim Rasool, South Africa’s ambassador to the United States. “Moreover, entities like Eskom understand that they need to put forward proposals which are defensible both financially and environmentally, and that is where this transaction was born. We thank Ex-Im for approving the Eskom financing, as well as the Bank’s vision and commitment to South Africa.”
The Eskom power plant financing will support Eskom’s purchase of engineering and construction management services from Black & Veatch International of Overland Park, Kansas, and will be used to construct the Kusile facility located in the Emalahleni area of the Mpumulanga Province. Hundreds of highly-skilled American senior engineers and support personnel in Ann Arbor, Mich., Raleigh, N.C. and Kansas City will be employed by Black & Veatch each year during a five year period.
South Africa is one of nine countries identified by Ex-Im Bank as offering the greatest export sales opportunities to U.S. companies. In winning this contract with the Bank’s support, Black & Veatch overcame competition from several major European engineering companies. The Kusile plant will consist of six 800 MW units, for a total capacity of 4,800 MW. It is the second of two plants being constructed by Eskom in order to meet the country’s increasing demand for electric power.
The Kusile plant is designed with advanced technology and equipment, including highly efficient supercritical boilers. Eskom undertook a comprehensive environmental assessment for the project, and a number of environmental safeguards, including scrubbers to control sulfur dioxide and filtering equipment to minimize particulate emissions were included in the plant’s design. Notably, Kusile will be the first coal-fired power plant in South Africa to include sulfur dioxide scrubbers. To help conserve water, the plant will use an air cooling system. The plant also is designed to be carbon capture and sequestration ready, which means it is configured in a way that will facilitate subsequent installation of equipment to capture and transport carbon emissions to a permanent storage location.
Ex-Im Bank financing supports hundreds of U.S. jobs, and also brings assurances of compliance with its environmental and social guidelines, including those for high intensity carbon projects. During its due diligence process, Ex-Im Bank met on several occasions with officials of environmental non-governmental organizations and project stakeholders to address their concerns relating to the potential environmental and social impacts of the Kusile project. Ex-Im Bank took into account all of the information and comments it received from these meetings on the project’s potential environmental and social impacts.
The application to finance the Kusile project underwent a review that focused on aspects related to its carbon dioxide production, and South Africa’s long-range goals to reduce its carbon dioxide production. Eskom, as a state-owned energy enterprise, has announced its goal to significantly reduce its long-term dependence on coal by 2025.
Included in the Bank’s Carbon Policy is enhanced due diligence and improved transparency in the tracking and reporting of CO2 emissions from projects that the Bank supports. No other export credit agency tracks or discloses this information to the public. The board took its vote after considering the results of a complete financial, technical and environmental review of the project.
ABOUT EX-IM BANK
Ex-Im Bank is an independent federal agency that helps create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance, and financing to help foreign buyers purchase U.S. goods and services. By charging fees and interest on all loan-related transactions, Ex-Im Bank is self-sustaining and is able to cover all operation costs and potential losses while also producing revenue. The Bank has generated $3.4 billion for U.S. taxpayers over the past five years.
In fiscal year 2010, Ex-Im Bank authorized a record high of approximately $24.5 billion in loans, guarantees and insurance (including more than $5 billion in authorizations for small businesses), supporting an estimated 230,000 American jobs. For the first half of the current fiscal year, FY 2011, Ex-Im completed $13.4 billion in total authorizations. This supported $15.9 billion in exports and more than 115,000 U.S. jobs, a 14 percent increase in jobs supported over the first half of 2010. These strong financial results put the Bank on a path to its third consecutive record-breaking year. For more information, visit Ex-Im Bank’s Web site at www.exim.gov
SOURCE Export-Import Bank of the United States