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Financial Support for Exporters
Government Programme
Warsaw, 2015
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Agenda
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1. Bank Gospodarstwa Krajowego – Polish Development Bank
2. Government Programme Financial Support for Exporters
3. Short-term export support facilities
4. Long-term export support facilities
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1. Bank Gospodarstwa Krajowego General Information
• Established in 1924
• 100% state-owned
• Operates on the basis of Act on BGK (very strong implicit State guarantee)
• Fitch: Long-term Issuer Default Rating (IDR): A- level equivalent to a rating of Poland; A in national currency
• Governance:
Supervisory Board: representatives of Ministers competent in matters of State Treasury, economy, construction industry, spatial and housing management, transport, regional development. Chairperson and members of the Supervisory Board are appointed by the Minister of Finance
Management Board
• Operates in the area of the whole Poland:
Headquarters in Warsaw
Branch in every capital of voivodeship
Cash service in more than four thousand partner branches
• Subject to Bank Law
• Subject to Polish Financial Supervision Authority
• Zero risk weight of guarantees and warranties issued by BGK within governmental programmes
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1. Bank Gospodarstwa Krajowego Strategic objectives and tasks
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Bank of the first choice for the execution of state-commissioned tasks (state funds and socio-economic development programmes)
Funds provider for execution of Polish Investments Programme
Leading bank in the filed of financing and providing services to local governments, communal companies and health care institutions
Organiser of effective operation model in the field of warranties and guarantees for entrepreneurs (PLG de minimis)
Bank managing governmental programmes and funds in the field of infrastructure developing and modernising (communal, housing, related to transport and nature preservation infrastructure)
Organizer of funds and system of export support
Bank supporting absorption of EU funds
Leading institution in the process of public finance consolidation
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Agenda
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1. Bank Gospodarstwa Krajowego – Polish Development Bank
2. Government Programme Financial Support for Exporters
3. Short-term export support facilities
4. Long-term export support facilities
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2. Government Programme Financial Support for Exporters Basic assumptions
• BGK’s strategic role is to organize a Polish exports support system based, among
other things, on the government programme adopted by the Cabinet on 30 July
2009
• The Programme was established for stimulating development of Polish export by
facilitating access to credits financing exports of Polish products and services.
• Thanks to adding new products to the programme in 2012, BGK grants from its
own funds credits to:
foreign buyers of Polish products and services or
their banks and
Polish exporters for realization of the export contracts.
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2. Government Programme Financial Support for Exporters Basic condition of obtaining support - Polish origin of the products – Every business entity registered in Poland as well as importers of Polish goods may apply for
facilities offered within the programme.
Maximum percentage share of foreign-origin components in the net revenues form
performance of an export contract shall be as follows:
• 70% in case of an export contract concluded for a credit period of less than two years,
• 60% in case of an export contract concluded for a period of two years or more ,
except for
• among others: computer systems, electronic computation equipment, electrical,
electronic and telecommunication products whose share is 80%,
• construction services whose share is 90%.
7 Minister of Economy Regulation of 19th December 2014
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2. Government Programme Financial Support for Exporters Examples of the supported projects
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Hotel construction
EUR 99.2 mln
Russia In execution
Mineral wax plant
EUR 48.2 m
Belarus In execution
Mining equipment
EUR 15.0 m
Mexico 2012
Railroad vehicles
EUR 10.2 m
Belarus 2012
Demilitarisation works
EUR 5.9 m
Azerbaijan
2011
Construction machines
EUR 1.5 m
Serbia 2013
Vacuum heater
EUR 9.2 m
Ukraine 2013
Meat proccessing line
EUR 2.5 m
Cold meats production equipment
EUR 13.5 m
Belarus 2014
Belarus 2014
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2. Government Programme Financial Support for Exporters Volume and structure of the support
0
100
200
300
400
500
2010 2011 2012 2013 2014
volume of the credits volume of the contracts
Total support granted within the programme (EUR m)
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65,0%
25,0%
2,0%
1,0% 2,0% 5,0%
Belarus Russia
Ukraine Serbia
Azerbaijan Mexio
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2. Government Programme Financial Support for Exporters Advantages for importers and exporters
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Advantages for exporter Advantages for importer
Complementing Exporter’s commercial offer with financing facility for his
contractor
Risk transfer from Exporter to BGK (without recourse to Exporter)
Disbursement immediately after the presentation of documents
Possibility of trade credit refinancing
Providing funds for production for export
Importers are provided with financing for purchases of Polish goods and services
Low cost of financing (state support and ‘non-profit’ formula)
Repayment period 5/7/10 years
Credit currency: EUR or USD
Stable and liable Polish state Bank as a Lender
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2. Government Programme Financial Support for Exporters
Export support facilities offered by BGK
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Short-term credits Long-term credits
• L/C postfinancing
• L/C discounting
• L/C confirming
• Buyer’s bank credit
• Buyer’s credit
• Receivables purchasing
Credits granted to buyer’s bank Credits granted directly to importer
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2. Government Programme Financial Support for Exporters Countries where banks, for which BGK has already established possibilities for export finance cooperation, have their seats
If needed, other foreign banks and countries can be reviewed and added to the list
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Agenda
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1. Bank Gospodarstwa Krajowego – Polish Development Bank
2. Government Programme Financial Support for Exporters
3. Short-term export support facilities
4. Long-term export support facilities
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3. Short-term export support facilities Terms and conditions
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Type of credit Financing based on Importer’s bank standing, based on letter of credit
Max repayment period
2 years
Amount up to 100% of the L/C amount, no minimal amount
Countries all countries except: European Union, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, USA
Aim financing exports of both investment and consumption goods
Currency PLN, EUR, USD
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3. Short-term export support facilities L/C postfinancing
• cost of credit – borne by importer
• for L/Cs paid a vista
Exporter (deliverer)
Importer (buyer)
1 Contract
3 Delivery/service
6 Payment to
the exporter
4 Documents
7 Repayment
2 Issue of L/C
Buyer’s bank
2 Issue of L/C
7 Repayment
5 Guarantee Cash
Documents
Products/services
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3. Short-term export support facilities L/C discounting
• cost of credit – borne by exporter
• for L/Cs with deferred payment
• for account holders only
Exporter (deliverer)
Importer (buyer)
1 Contract
3 Delivery/service
6 Payment to
the exporter
4 Documents with
discounting order
7 Repayment
2 Issue of L/C
Buyer’s bank
2 Issue of L/C
7 Repayment
5 Guarantee Cash
Documents
Products/services
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3. Short-term export support facilities L/C confirming
• confirmation commission borne by exporter
• 0,25 – 0,40% (depending on risk category of the country of the issuing bank seat) of the L/C amount for every commenced quarter of L/C validity, paid up-front
• for L/Cs with confirmation order, paid a vista or with deferred payment
Exporter (deliverer)
Importer (buyer)
1 Contract
4 Delivery/service
6 Payment
5 Documents and
determination of compliance
2 Issue of L/C
Buyer’s bank
2 Issue of L/C
7 Settlement
3 Guarantee Cash
Documents
Products/services
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Agenda
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1. Bank Gospodarstwa Krajowego – Polish Development Bank
2. Government Programme Financial Support for Exporters
3. Short-term export support facilities
4. Long-term export support facilities
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4. Long term export support facilities Direct financing for importer (buyer’s credit and receivables purchaising)
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Type of credit importer’s balance sheet based financing, project finance no-recourse basis (based on SPV) and recourse against the sponsor basis
Amount of credit at least EUR 10 m
Tenor of financing
up to 28 months contract execution period and repayment period from 2 to 10 years *
Structure of financing
bilateral or consortium credits
Currency PLN, EUR, USD
Documents in case of buyer’s credit prepared by external legal advisor based on LMA standards, in Polish or English
Countries no exceptions
Pricing case-by-case, based on transaction risk profile
* Other tenor of financing is possible – according to OECD regulations
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4. Long term export support facilities Buyer’s credit
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Exporter (deliverer)
1 Contract
5 5 Delivery/service
7 Payment to
the exporter
6 Documents
Importer (buyer)
2 Loan agreement
4 Condition precedent
8 Repayment
Guarantor
3
Guarantee (if necessary)
2 Insurance
Cash
Documents
Products/services
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4. Long-term financial facilities Financing for importer through a buyer’s bank (Buyer’s bank credit)
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Type of credit financing based on the assessment of importer’s bank standing
Min. repayment period
2 years
Amount of credit
up to 85% of the contract value, at least EUR 1 m
Countries all countries
Cost of credit borne by importer
Aim investment export financing
Currency PLN, EUR, USD
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4. Long-term financial facilities Buyer’s bank credit
Exporter (deliverer)
Importer (buyer)
1 Contract
4 Delivery/service
6 Payment to
the exporter
5 Documents
7 Repayment
2. Credit
agreement
Buyer’s bank
2 Credit agreement
7 Repayment
3 Insurance
Cash
Documents
Products/services
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Bank Gospodarstwa Krajowego Al. Jerozolimskie 7
00-955 Warszawa
www.bgk.pl/en
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Andrzej Latoszek tel. +48 22 599 83 08 e-mail: [email protected]
Karol Jakubaszek tel. +48 22 599 83 07 e-mail: [email protected]
Joanna Mularczyk tel. +48 22 596 58 05 e-mail: [email protected]
Agata Wilińska tel. +48 22 599 81 64 e-mail: [email protected]