Annual Report 2015, Export Credit Guarantees of the ... · Annual Report 2015, Export Credit...

annual report 2015

ann

ual

rep

ort

exp

ort

cre

dit

gu

aran

tees

of

the

fed

eral

rep

ubl

ic o

f g

erm

any2015

Including Untied Loan

Guarantees

head office

Euler Hermes Aktiengesellschaft

Gasstraße 27

22761 Hamburg

Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de

department berlin

Friedrichstadt-Passagen

Quartier 205

Friedrichstraße 69

10117 Berlin

Phone: +49 (0)30 / 20 94 - 53 10

Fax: +49 (0)30 / 20 94 - 53 20

[email protected]

branch offices

10117 Berlin

Friedrichstraße 69

60596 Frankfurt

Theodor-Stern-Kai 1

Etage 8 Bauteil A

22761 Hamburg

Gasstraße 27

50672 Köln

Hohenzollernring 31-35

81373 München

Radlkoferstraße 2

70597 Stuttgart

Löffelstraße 44

Export Credit Guarantees of the Federal Republic of Germany

For all branch offices:

Phone: +49 (0) 40/ 88 34-90 00

Fax: +49 (0) 40/ 88 34-9141

[email protected]

<<< please turn overleaf for definitions and explanations

www.agaportal.de

Euler Hermes AktiengesellschaftExport Credit Guarantees of the Federal Republic of Germany

Postal address

22746 Hamburg, Germany

Office address

Gasstraße 27


Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de

Branch offices: Berlin, Frankfurt,

Hamburg, Cologne, Munich, Stuttgart

09

23

06

05

16

WM_EH_JB15_EKG_Umschlag_englisch_JB EKG 27.04.16 10:57 Seite 1

definitions and explanations

Arrangement (OECD Consensus):The Arrangement is a "Gentlemen’s Agreement" between theOECD members which lays down certain minimum and maxi-mum terms permissible for officially supported export creditswith a maturity of more than 2 years. The Arrangment aims atcreating a level playing field for the exporters and avoidingfinancing competition which would place an unnecessary burden on national budgets.

Ceiling:For countries where cover facilities have been restricted forrisk management reasons, an amount of cover is fixed whichplaces a limit on the maximum amount for which guaranteescan be issued, i.e., a ceiling is established. As a rule, such ceilings apply to transactions with repayment terms of morethan 12 months.

Club of London:The uncovered loans granted by commercial banks arerescheduled by the banks on their own initiative (cf. alsoParis Club).

Coinsurance:When the primary supplier passes on his foreign risks to thesubcontractor, e.g. when the latter only gets paid when theforeign buyer has paid the primary contractor, an applicationcan be made for so-called coinsurance. Among EU memberstates, this is regulated by a directive from the Council. Thereare bilateral agreements with other credit insurers. Besidesthis, there is the option of concluding a coinsurance agree-ment with other state export credit agencies covering just asingle transaction.

Commercial risks:Commercial risks are mainly insured under the cover given forthe credit and manufacturing risks involved in export contracts with private buyers. In the case of credit risk, the insured event is the uncollectability of insured accounts receivable as a result of the insolvency of the foreign buyer,as well as his simple non-payment after the expiry of a certainperiod (protracted default). In manufacturing risk cover, thecommercial risks recognized as insured are also the occurrenceof buyer insolvency during the manufacturing period, theunlawful repudiation of the contract by the buyer as well asnon-payment of cancellation costs if the contract was lawfully cancelled.

Environmental and social audit:The Recommendation of the Council on Common Approachesfor Officially Supported Credits and Environmental and SocialDue Diligence (Common Approaches) essentially forms thebasis for the assessment of environmental and social risks ofprojects abroad, in which German exporters are involved assuppliers.

Exposure: Total commitment level of the Federal Government bookedagainst the maximum exposure limit or the commitmentunder an individual export credit guarantee.

Interministerial Committee:Decides on matters of principle and on the availability of cov-er for individual transactions. The Federal Ministry for Eco-nomic Affairs and Energy takes the decisions on the coverapplications with the approval of the Federal Ministry ofFinance, in agreement with the Federal Foreign Office and Federal Ministry for Economic Cooperation and Development,and with the assistance of the mandataries and experts.

Marketable risks:With effect from 2002, the political and commercial risks aris-ing out of export transactions with credit periods of up to twoyears in EU countries as well as core OECD countries are con-sidered to be marketable risks. In line with the principle ofsubsidiarity, state cover is therefore no longer available forsuch risks. The new EU Commission Communication whichcame into force on 1 January 2013 regulates up to 2018 theprocedure under which a country may be classified as tem-porarily non-marketable if and when sufficient cover is notavailable from the private credit insurers.

Multi-sourcing projects:Projects involving exporters from different countries and, inmany cases, with multinational financing.

Offer of cover:Declaration of intent to provide cover subject to the conditionthat the factual and legal basis of the transaction does notchange (transaction earmarked for cover).

Parallel insurance:When the various suppliers in a multi-sourcing project eachhave their own payment claims against a foreign buyer, eachsupplier insures his receivables against loss with his ownnational export credit agency.

Paris Club:International association of official creditors which restruc-tures the debt of countries experiencing payment difficulties.The debt treatment refers almost exclusively to officially guaranteed commercial debt, i.e. guaranteed in particular bythe governments of the creditor countries and developmentaid loans. The Paris Club has no organisational structure withwritten statutes. The procedural guidelines have beendeveloped over the course of time and are amended whenand as necessary (cf. "Club of London").

Political risks:The origin of political risks is to be sought in measures orevents originating in the sphere of state authorities. In thecase of cover for amounts due for payment, such risks arepolitical circumstances which cause the insured accountsreceivable to become uncollectible, especially the generalpolitical cause of loss, which includes legislative or regulatoryactions and so-called chaos events such as war, civil unrestor revolution in foreign countries. The Federal Government further grants cover for the conversion and transfer risk, i.e.,the risk that amounts duly paid by the foreign buyer in localcurrency are not converted and/or not transferred due torestrictions on the international payment system betweencountries. Cover is also given for the risks of frustration of con-tract, when it becomes impossible to fulfil a contract and enti-tlements under it are lost, as well as the risk of loss of goodsbefore the passing of risk for reasons which can be attributedto political circumstances. If such a cause of loss seemslikely – just as in the case of the general political cause of loss– and the goods are sold elsewhere in such a situation, thenthe risk of a shortfall in the proceeds realized is also insured.In the case of manufacturing risk cover the political risksinsured comprise the political circumstances abroad whichlead to the cessation of manufacture or to non-shipment, aswell as embargos imposed under the export law and by anythird countries which may be involved.

Project financing schemes:Are applied to complex export transactions where the projectitself generates sufficient income to cover the operating costs and the debt service for borrowed funds.

Protracted default: Non-payment which persists for a longer period. If an amountowed by a foreign buyer is not settled within a period of, normally, six months after due date, this is considered to constitute protracted default. In the case of the buyer credit cover facility the waiting period is reduced to one month.

Reinsurance:Using the reinsurance model, projects involving exportersfrom different countries (multi-sourcing-projects) can be cov-ered by a single export credit insurer, so that the main suppli-er and the financing bank only have to deal with one partner.The risk is shared between the parties to the reinsuranceagreement according to the national percentages of goodsdelivered.

Special Drawing Rights:The Special Drawing Right (SDR) is a form of artificial currencyunit used by the International Monetary Fund (IMF). Theexchange rate is defined by a basket of currencies comprisingthe US dollar, the euro, the pound sterling and the yen.

Statutory maximum exposure limit:Maximum amount stated in the Federal Budget Act up towhich liability in the form of issued export guarantees may beaccepted. The Federal Office for Central Services and Unre-solved Property Issues (BADV) keeps a record of the totalamount of the issued export guarantees und monitors the uti-lization of the statutory maximum exposure limit.

Structured finance transaction: The financing of an export transaction in which, due to insufficient or non-assessable creditworthiness of the foreigndebtor, and because conventional security instruments (payment guarantee, letter of credit) are not available, otherelements are included in the construction to ensure serviceof the debt, such as the proceeds of offtake agreements.

Total outstanding risk of the Federal Government: The country risk statistics reflect the debt owed by individualcountries (including interest) to the Federal Government andthe amount which would actually have to be indemnified bythe Federal Government under the export guarantees issued.

Uninsured percentage:Exporter’s share in the loss in an event of loss, normally 5%for political risks and 15% for commercial risks and protracteddefault. For wholeturnover policies, it is 10% for commercialrisks. Until the end of 2016 the uninsured percentage agreedin supplier credit cover and wholeturnover policies for com-mercial risks can be reduced to 5% against the payment of apremium surcharge. In the case of buyer credit cover, theuninsured percentage is 5% for all risks, for manufacturingrisk cover it is also 5% and for wholeturnover policies light itis 10% for all risks.

federal export credit guarantees at a glancein million eur

Statutory cover limit

Cover applications (volume)

Small and medium-sized enterprises(share of exporters supported with guarantees in %)

New Business

Covered export volume

of which for

emerging economies and developing economiesindustrialised countries

Covered exports for EU countries

Covered volume as % of total exports

Results

Revenues from

Premiums and fees

Recoveries

from political claimsfrom commercial claims

Other income

Expenses for

Claims paid

for political claimsfor commercial claims

Management fee

Annual Result

*

**

******

2014

165,000

38,615

74.2

24,750.8

20,687.2

4,063.6

1,311.0

2.2

598.1

299.8

181.4

118.4

0.1

504.0

288.4

215.5

84.7

309.3

Accrued Result (since 1951)

Amounts subrogated to Federal Goverment

3,874.4

4,398.3

2015

160,000

38,156

75.4

25,832.2

19,310.6

6,521.6

2,266.4

2.2

541.8

285.7

153.3

132.5

0.8

395.1

94.9

300.1

89.6

343.7

4,218.0

4,444.5

* Including buyer credits

** Firms with up to 500 employees

*** Classfication of countries see p. 85



Hermes Cover

annual report 2015

WM_EH_JB15_EKG_Inhalt_englisch_JB_Masterdatei 27.04.16 11:26 Seite 3

Dear ladies and gentlemen,

The German export industry remains on its growth trajectory. Last year, exports

rose by 6.4 percent to a record amount of more than 1.2 trillion euros. At the

same time, the German economy expanded by 1.7 percent. This is further proof

of the importance which exports of goods and services have for the success of

our national economy.

However, conditions in numerous markets that are important for the German

economy remain challenging. Economic growth has continued to slow in

China. Emerging economies and developing countries that export raw materials are coming

under strain from low commodity prices. Russia is facing significant capital outflows and the

depreciation of the rouble. The conflict between Russia and Ukraine has not been resolved,

while the EU is still imposing sanctions on Russia. At the same time, the outlook for a number

of South American countries has deteriorated substantially.

Then there are the challenging geopolitical developments in the Middle East. Following the

historic settlement with Iran of the conflict which had been ongoing since 2002 over the

country’s nuclear programme and the lifting of most of the economic and financial sanctions

in Europe, there is large export potential for German companies in particular. However, there

are still a number obstacles standing in the way of successful resumption of the formerly so

close trading relations with Iran.

During these times characterised by major economic and geopolitical risks, government

export credit guarantees play a particularly important role as a cover and financing instrument

for export transactions. They make a decisive contribution towards maintaining stable and

reliable trade ties even in difficult times.

In 2015, the Federal Government issued export credit guarantees worth 25.8 billion euros

for exports of goods and services. Once again, small and mid-size companies in particular

made use of Hermes Cover to protect themselves from commercially and politically induced

buyer defaults. Three quarters of all applications for cover by the Federal Government were

submitted by small and mid-size companies.

At the same time, however, cover was also provided for a number of large-scale transactions.

The fact that German companies prevailed in international bids for major contracts testifies

to the competitiveness of German exporters and shows the efficacy of Hermes Cover as an

instrument for promoting foreign trade.

In the cover products which it offers, the Federal Government continued on the course which

it had commenced in 2014 and widened the availability of cover to include further countries in

sub-Saharan Africa. The addition of Kenya, Senegal and Uganda not only serves the interests

of German businesses but also marks an important contribution by the Federal Government

to the ongoing economic development of these countries.


In November 2015, the OECD countries agreed on rules for export credit guarantees aimed

at ensuring that as a fundamental principle only the technologically most advanced and

efficient technologies are supported for the installation and modernisation of coal-fired

power stations. This supplements the corresponding national rules adopted by the Federal

Government in December 2014 for financing coal.

Outside the OECD, the Federal Government also continued its commitment to negotiations

on the introduction of global standards for government-backed export credits in 2015.

In the International Working Group, which comprises participants from the EU and the

OECD as well as representatives from Brazil, China, India, Malaysia, Russia and South Africa

among others, agreement was reached at the end of 2015 to commence negotiations on

comprehensive horizontal rules. This marks an important step towards achieving a cross-

sector and internationally consistent set of rules as a basis for furthering equal opportunities

in international competition.

A further new aspect concerns the inclusion of non-German deliveries of components in

Hermes Cover. Exporters can now submit a preliminary inquiry to determine the availability of

cover for a transaction even if it predominantly comprises foreign deliveries. The response by

companies to the new preliminary inquiry instrument has been favourable and the experience

gained to date consistently positive.

In 2015, government export credit guarantees received praise in several different respects.

A study conducted by the ifo Institute once again confirmed the outstanding importance of

government export guarantees for the national economy, underscoring the importance of

Hermes Cover for securing and protecting jobs in the Germany export industry as well as the

relevant components sector.

The results of a representative survey of companies who had used Hermes Cover were also

encouraging. 96 percent of the companies polled said that they were satisfied with the

scheme, with 94 percent saying that they intended to use government export credit guaran-

tees again in the future. Government export credit guarantees are important and accepted

instruments. Together with the export industry and export-financing banks, we will continue

to develop export credit guarantees to ensure that, looking forward, they retain this status.

Yours,

Sigmar GabrielFederal Minister of Economic Affairs and Energy


Country cover policy and 34 special forms of cover

36 Country cover policy

38 Emerging economies and

developing countries

38 Latin America and the Caribbean

40 Africa

42 Asia

48 Europe (excluding industrialised countries)

50 Industrialised countries

52 Special forms of cover

52 Project finance and structured finance

54 Aircraft business

55 Ship business

56 A short digression: Investment

guarantees offer protection for

German investments abroad

The Interministerial 8 Committee 2015

10 Development and trends

11 Business overview 2015

at a glance

12 The task of the

Interministerial Committee

13 IMC external meeting

14 Export Credit Guarantees of theFederal Republic of Germany

16 International collaboration

strengthened

16 International Working Group

17 G12 summit in Berlin – annual G7 summit in Rome

18 Consultations

18 Cooperation agreements

20 Network for German exporters

21 Advice eagerly sought

Development of the22 export credit guarantees

24 New developments in the

export credit guarantee scheme

24 Export credit guarantees in the eraof global value chains

25 Federal Government extends KfWprogramme for refinancing Hermes-covered export credit

26 Revised letter of interest

27 Revision of pre-indemnification loss management costs

27 Letter of undertaking revised

27 Federal Government widening cover for additional countries of sub-Saharan Africa

28 Export credit guarantees and

sustainability

29 Human rights and export credit guarantees

29 Antibribery measures

30 Government export credit

guarantees in the energy sector

31 Export credit guarantees for renewable energies

32 Government export promotion forcoal-fired power stations

33 General exclusion of cover for nuclear installations

33 Smart grids added to OECD sectorunderstanding on climate change


58 Business development

60 New business

61 Number and volume of applications

61 Offers of cover

62 Cover by country groups

63 Cover by horizon of risk and type of cover

66 Cover by industrial sectors

66 Cover for exports of military goods

67 Environmentally relevant aspects in cover for projects

68 Claims, recoveries and

rescheduling

68 Claims

68 Recoveries

69 Rescheduling

70 Results

70 Revenues

70 Expenses

71 Annual result

72 Statutory cover limit and

total commitment level

73 Outstanding risk

74 Unrecovered amounts

under claims paid

76 Tables

Untied loan 78 guarantees (UFK)

80 The year at a glance

82 Transparency initiative

83 The PCC Bakki project – silicon production in Iceland for German industry

84 Annex

85 Classification of countries

85 Photograph credits

86 Products

Definitions and explanations

on the inside of the cover flap



the german federal government promotes german exports

by providing government export credit guarantees,

which are known as “hermes cover”. the interministerial

committee for export credit guarantees decides on whether

to grant cover for an export transaction. it comprises

representatives of the federal ministry for economic affairs

and energy, the federal ministry of finance, the federal

foreign office and the federal ministry for economic

cooperation and development. in 2015, the federal govern-

ment issued export credit guarantees worth 25.8 billion

euros primarily to small and mid-size companies.

the interministerialcommittee 2015

the interministerial committee 2015

development of the export credit guarantees

country cover policy and special forms of cover

business development

untied loan guarantees

annex

9


developments and trends

Against the backdrop of mounting geopolitical risks

and more muted growth in global economic output and

trade, conditions for German exports remained chal-

lenging. In particular, demand in the emerging econ -

omies and developing countries was weaker than

expected last year.

In addition to structural problems, countries exporting

raw materials, such as Brazil, Russia and Venezuela,

came under pressure from lower oil and commodity

prices.

On the other hand, there was a stronger focus on other

markets such as Egypt, with exporters also increasing -

ly discovering the countries in sub-Saharan Africa as

potential markets. However, German exporters are par-

ticularly paying attention to the Middle East, especially

10 Iran, following the historic agreement to settle the con-

flict over that country’s nuclear programme, which first

broke out in 2002.

Yet, it is not only the markets which are transforming;

in addition, there has been a fundamental change in

the structure of global trade. Globalisation and the relo-

cation of production facilities in foreign countries are

prog ressing. Mounting international competition and

the networking of the economy are spurring the emer-

gence of global value chains. What is more, national

rules are increasingly calling for a certain proportion of

local manufacturing content in imported goods. Finding

the right response to cover for foreign content forms a

material challenge for export credit guarantees. In this

connection, the Federal Government took a decisive

step forward last year to enhance Hermes Cover as an

instrument without, however, questioning the underly-

ing principle of promoting employment within Germany.

Brückner Maschinenbau GmbH & Co. KG from South-EastBavaria shipped a facility for the production of biaxially oriented polypropylene film to Turkey. Fitted with ultra-

modern technology, the system is characterised by minimalmaintenance requirements and achieves lower energy

consumption and greater raw material efficiency than con-ventional machinery. With the new production line, the

large Turkish plastic film producer Polibak Plastik Film isable to produce more than 50,000 t of polypropylene

film a year, thus expanding its annual capacity to more than 130,000 t. Around 80 German mechanical and electri-

cal engineering companies are involved in the project. The Federal Government is supporting the transaction with

a supplier credit guarantee plus buyer credit cover.


business overview 2015 at a glance

Last year, the German Federal Government issued

export credit guarantees worth 25.8 billion euros cover-

ing exports to 161 countries (2014: 24.8 billion euros,

164 countries). This represents 2.2% (2014: 2.2%) of

aggregate German exports of around 1,196 billion euros

(2014: 1,134 billion euros). The consistently high volume

of cover provided reflects the importance of export

credit guarantees as a crucial instrument in the promo-

tion of foreign trade.

Small and mid-size companies (SMEs)1 in particular

made use of the opportunity of shielding their exports

from political and commercial risks. 75.4% of all appli-

cations were submitted by SMEs (2014: 74.2%).






annex

11Many matters concerning the German export industry

and the cover provided by the Federal Government can

no longer be addressed at a national level but call for

international agreements. This applies to the granting

of export credit guarantees in individual sectors as well

as the modification of environmental and social stan-

dards. The Federal Government is committed to the

implementation of global standards in both areas.

Last year, Hermes Cover again helped exporters to

maintain business relations even in politically and eco-

nomically challenging times and to enter new markets.

Without export credit guarantees, numerous transac-

tions would not have been possible in a number of

countries and regions.

1 Companies with up to 500 employees


the tasks of the interministerial committee

The Federal Government defines its cover policy via

the Interministerial Committee (IMC) for Export Credit

Guarantees.

The IMC discusses and makes decisions on questions

of fundamental importance and on the granting of cov-

er for individual export transactions on the basis of

general guidelines. Besides, it constantly enhances the

government export guarantee system.

In addition to the Federal Ministry for Economic Affairs

and Energy, which holds the lead function, the IMC

comprises representatives of the Federal Ministry of

Finance, the Federal Foreign Office and the Federal

Ministry for Economic Cooperation and Development.

12 Once again, most of the cover provided was for the

emerging economies and developing countries, with

the Federal Government issuing export credit guaran-

tees for exports worth 19.3 billion euros (previous year:

20.7 billion euros) for these countries. Accordingly, they

accounted for 75% of new business (2014: 84%).

Disaggregated by country, Russia ranked highest with

3.6 billion euros (2014: 2.2 billion euros), followed by

the United States with 2.6 billion euros (2014: 1.2 billion

euros) and Egypt, for which the Federal Government

provided cover of 2.4 billion euros (2014: 433 million

euros).

Of the total export credit guarantees, single transaction

cover accounted for 16 billion euros (2014: 13.5 billion

euros) and spread policies for 9.8 billion euros (2014:

11.3 billion euros) in 2015. Cover for transactions with

credit periods of more than 360 days constituted 14.3

billion euros of new business (2014: 10.6 billion euros).

Government cover for short-term credit periods (up to

360 days) was valued at 11.5 billion euros (2014: 14.1 bil-

lion euros). Following a significant rise in the wake of

the financial crisis, the volume of short-term cover has

returned to normal.

Amounts paid out for claims dropped to 395 million

euros in 2015 (2014: 504 million euros). Revenue from

handling fees and premiums for the assumption of risks

came to 542 million euros last year (2014: 598 million

euros). Including recoveries under previously indem -

nified claims of 286 million euros (2014: 300 million

euros), the annual result for the Federal budget came to

344 million euros (2014: 309 million).

interministerial committee – imc

Ministries

@ BMWi Federal Ministry for Economic Affairs and Energy – lead function

@ BMF Federal Ministry of Finance

@ AA Federal Foreign Office

@ BMZ Federal Ministry for Economic Cooperation and Development

Mandataries

@ Euler HermesAktiengesellschaft

@ PricewaterhouseCoopers AktiengesellschaftWirtschafts prüfungs -gesellschaft

Experts

@ representatives of the exporting industries and the banking sector

@ KfW

@ AKA Ausfuhrkredit -gesellschaft mbH

@ Federal Audit Office







annex

13Decisions are made on a consensual basis to ensure

consistency in economic, fiscal and foreign policy as

well as international development work.

The IMC makes decisions on cover for transactions val-

ued at over 10 million euros. Responsibility for export

transactions valued between 5 and 10 million euros is

delegated to the Small Interministerial Committee for

Export Credit Guarantees. The mandataries act as ser -

vice providers and make decisions on applications for

cover of up to 5 million euros in accordance with the

instructions issued by the Federal Government and

under its supervision. In particular cases, responsibility

may be allocated to a higher level (mandataries, Small

Committee, Full Committee).

imc external meeting

In 2015, the Interministerial Committee held its tra -

ditional external meeting in the “velvet and silk city” of

Krefeld, combining it with a visit to German technology

supplier Siempelkamp and piping producer Europipe.

The external meeting provides a good opportunity of

talking to export companies and municipal politicians,

sharing experience gained with the scheme and dis-

cussing future expectations.

During a tour of the company, Dr. Ing. Hans W. Fechner,

management chairman of the Siempelkamp Group,

demonstrated the production processes at the factory

to the Committee members. The company supplies

press lines and full-scale production equipment for the

wood-based products industry, the metal shaping

industry and the composite and rubber industry around

the world.

The InterministerialCommittee met on 3 September 2015 at the Federal Ministry for Economic Affairs and Energy in Berlin.


14

Export credit guarantees are an important

instrument used by the Federal Republic of

Germany to promote foreign trade. They

protect exporters from commercially or politi-

cally induced payment defaults. The risk of a

default, thus, no longer lies with the exporter

or the bank providing the finance but is

transferred to a large degree to the Federal

Republic of Germany. In return for this, the

policyholder pays a premium calculated on

the basis of the risk involved.

Hermes Cover also simplifies the arrange-

ment of finance for a transaction. Finance

can be raised more readily and on more

favourable terms in the case of transactions

backed by the Federal Government com-

pared with those for which no government

cover is provided. Export credit guarantees

are a demand-oriented promotion instru-

ment.

As a matter of principle, all German export

companies are able to apply for Hermes

Cover. Transactions which strengthen the

position of small and medium-sized enter-

prises (SMEs) are especially considered to

be eligible for cover. There are no rules on

the size of the company or the volume of the

transaction for which cover may be sought.

Nor are any industrial sectors excluded a


priori from Hermes Cover. That said, export

credit guarantees are available for nuclear

transactions in only a small number of

exceptional cases, e.g. for plant decommis-

sioning.

Hermes Cover is provided in accordance

with national and international rules and is

contingent upon specific conditions being

met. The key criteria for the provision

of cover include eligibility for support and

justifi abil ity of the risks arising from the

transaction.

Apart from the general interest in executing

the export transaction, a further precon -

dition for eligibility is the absence of any

bribery in the lead-up to the transaction. In

addition, the impact on human rights and

the environment is taken into consideration.







annex

15

“Justifiable risk” means that there is a high

probability that the transaction will be exe-

cuted without any insured loss arising.

Accordingly, the country risk as well as the

buyer’s creditworthiness and any collateral

that may be available are analysed up front.

The financial risk arising from the provision

of cover is assumed by the Federal budget,

which conversely receives the revenue from

the export credit guarantees. As risk premi-

ums are payable, Hermes Cover is financially

self-supporting and therefore does not con-

stitute a subsidy.

Responsibility for managing and coordinat-

ing the government export credit guarantees

is assigned to Euler Hermes and PwC (man-

dataries), who act as service providers for

the Federal Government.

MUEG Mitteldeutsche Umwelt- und EntsorgungGmbH is implementing one of the largest environ-mental projects in Latvia: The mid-size company is executing the environment-friendly disposal ofacid tar deposits at two landfills. This includes activities such as remediation planning, the instal -lation of the treatment and waste gas purificationsystem and groundwater purification. Based inBraunsbedra in the German state of Saxony-Anhalt,the company is also responsible for removing, treating and transporting the acid tar.

The landfills, which are located 30 km east of Riga,were used between 1950 and 1980 to deposit production waste from oil and lubricant processing.They pose substantial risks to the environment asthey are contaminating the soil, groundwater and surface water due to the absence of any sealingin the pits. For this reason, the acid tar must beurgently removed and the soil and water reha -bilitated. MUEG Mitteldeutsche Umwelt- undEntsorgung GmbH has since treated the planned volume of 30,200 t of acid tar in accordance with the terms of the contract.

70% of the project is being funded by the EuropeanUnion. In addition, the Federal Republic of Germany is supporting the project with suppliercredit cover and cover for services.


16

international collaboration strengthened

Hermes Cover is embedded in an international set

of rules. Export credit agencies in the OECD member

states observe the requirements of the oecd consen-sus. Within the OECD, the EU member states adopt a

uniform and harmonised position. Representatives of

the EU countries determine their joint approach in

monthly meetings of the eu council working groupon export finance and insurance matters.

international working group

In 2012, the United States and China came to an agree-

ment to enter into negotiations concerning the intro-

duction of global standards for government-backed

export credits. In addition to the EU, all other OECD

Consensus participants as well as Brazil, China, India,

Malaysia, Russia and South Africa, among others, par-

ticipate in this international working group. The Federal

Government plays an active role in the negotiations of

the International Working Group, exerting influence on

its development. As of the end of 2015, this working

group had held nine meetings.

Success was achieved at the October 2015 meeting in

Washington. Following on from intensive discussions

on sector-specific rules for the ships and medical tech-

nology, negotiations were commenced on cross-sector

horizontal rules.

Introduction to government export credit guarantees

A brief video explains in simple

fashion how government

export credit guarantees work.

Cover, finance, risk transfer,

eligibility for support and

subsidiarity – these are just

some of the aspects that are

described in greater detail

in the video.

Primarily directed at small and

mid-size companies that have

previously not used Hermes

Cover, it can be found on the

Internet at www.agaportal.de

(German version only).







annex

17This development marks an important step forward

towards establishing an international set of rules which

is binding on all sectors. Uniform standards going be -

yond the OECD make an important contribution to a level playing field in international competition.

This is why the Federal Government remains strongly

committed to such rules.

g12 summit in berlin – annual g7 summit in rome

Held at the end of March 2015 in Berlin, the G12 summit

provided a forum for sharing opinions and experience.

The chairpersons of the export credit agencies of the

G7 countries, the BRIC nations and Korea met in the

German capital for two days to discuss current develop-

ments and challenges relating to export credit business.

In October, the G7 countries held their annual summit

in Rome, likewise discussing topics of current interest

and trends of relevance for export credit business in a

smaller setting.

Current trends and challengesfacing export credit guaranteeswere some of the topics dis-cussed by delegates from twelveexport credit agencies at theirannual meeting, which was hosted by the Federal Ministry for Economic Affairs and Energyin Berlin on 23 March 2015.

From left: David Godfrey, UKEF,Alexey Tyupanov, EXIAR,Alessandro Castellano, SACE,Charles Sarrazin, TRESOR, Dr. Hans-Joachim Henckel, BMWi,Marcelo Pinheiro Franco, ABGF,Geetha Muralidhar, ECGC, Edna Schöne, Euler Hermes, Fred Hochberg, US EXIM, Luo Xi,SINOSURE, Benoit Daignault,EDC, Yanghyun Lim, K-sure, Dr. Ernst Röder-Messell, BMWi,Kazuhiko Bando, NEXI, Dr. Matthias Koehler, BMWi


18 The berne union comprises 49 public and private-

sector credit and investment insurers from OECD and

non-OECD countries as well as three multilateral orga -

nisations.

cooperation agreements

The internationalisation of trade, cross-border links

and the growing importance of global value chains are

strengthening the need for cross-border agreements.

To date, 24 reinsurance framework agreementshave been signed with other export credit insurers.

consultations

In addition to regular talks at the EU, OECD and Berne

Union level, a number of bilateral, trilateral and multi-

lateral consultations were held with other government

bodies and institutions active in export credit insurance

and export finance in 2015. They included meetings

with representatives from Brazil, China, Italy, Japan,

Korea, Austria and Switzerland. A delegation from India

visited Germany.

The purpose of the consultations is to strengthen joint

activities with other countries, share information on

best practices in government-sponsored export credit

insurance and encourage the establishment of global

standards for export-credit finance. This is also the pur-

pose of work within the Berne Union.

A meeting was held on 24 June2015 between representatives of the Indian export credit insurerECGC and the mandataries at Euler Hermes AG in Hamburg. The purpose was to intensify thecooperation and the work of the International Working Group.

From left: V. Dharmarajan, ECGC,Jens Heitmann, PwC, A. K. Jain,ECGC, Robert Imiela, PwC, Svenja Grell, PwC, Dr. EckhardtMoltrecht, Euler Hermes, Nirdosh Chopra, ECGC, Catrin von Hesberg, Michael Schröder,Hannelore Bergs, Euler Hermes


cooperation agreements

Australia

Austria

Belarus

Belgium

Brazil

Bulgaria

Canada

China

Cyprus

Czech Republic

Denmark

Estonia

Finland

France

Greece

Hungary

India

Israel

Italy

Japan

Latvia

Lithuania

Luxembourg

Malta

Netherlands

Norway

Poland

Portugal

Romania

Russia

Slovak Republic

Slovenia

South Korea

Spain

Sweden

Switzerland

Turkey

United Kingdom

United States

S

S

S

S

S

S

S

S

S

S

S

S

S*

S

S

S

S

S

S*

S

S

S

S

S

S

S

S*

S

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

R

B

B

B

B

B

B

B

B

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C

C*

C

C

C

C

C

C

C

C*

C*

C

deliveries from subcontractors accounting for 30-40% can be included pursuant to the decision of the Council of the EU (up to 40% in the case of order values up to a maximum of 7m EUR)

deliveries from subcontractors up to 30% can be included according to bilateral agreement

coinsurance agreement under EU regulations

coinsurance under bilateral agreement

reinsurance agreement on a bilateral basis

bilateral cooperation agreement

S

S*

C

C*

R

B






annex

19In preparation of possible reinsurance treaties, coop-eration agreements were signed in 2015 with the

Chinese export credit agency Sinosure, the Brazilian

Export Credit Insurance Agency (ABGF) and the Export-

Import Insurance Company of the Republic of Belarus

(Eximgarant of Belarus).

The table sets out the cooperation agreements in force

with other countries.

A bilateral meeting was held in Kyoto on 11 and 12 November2015 between Japanese export credit agency NEXI and the German Federal Ministry for Economic Affairs and Energytogether with Euler Hermes and PwC. The purpose was toenhance the cooperation.

From left (standing): Kyoko Kojima, Yoshitaku Fukushima,Masaru Kanke, Tetsuya Koizumi, NEXI, Dr. Eckhardt Moltrecht,Euler Hermes. From left (sitting): Jens Heitmann, PwC,Kazuhiko Bando, NEXI, Dr. Hans-Joachim Henckel, BMWi,Takeshi Yasuraoka, METI, Christof Wegner, BMWi


20

In its efforts to improve the Hermes instrument, the

Federal Government relies on a network of experts. In

addition to business and banking associations, it par-

ticularly maintains an intensive and constructive dia-

logue with exporters and notably also with small and

mid-size companies.

An additional important forum for dialogue with the

business community outside the Interministerial Com-

mittee is the brains trust for export credit guaran-

tees which was set up in 2010 and comprises repre -

sentatives of the ministries, exporters, banks and the

mandataries. The brains trust meets twice a year and

provides a platform for sharing expert information on

the use of export credit cover.

network for german exporters

The African economy is increasinglygrowing in importance for the Germaneconomy, something which was reflected in the strong interest shown by companies as well as representativesof banks and associations at the“Spotlight on Africa” conference held on 31 March 2015 in Hamburg. Organisedin conjunction with the German-AfricanBusiness Association, it was attended byaround 170 participants.

“Africa a market of the future? Makinguse of opportunities and limiting riskswith Hermes Cover” was the title of the presentation held by Oliver Hunke ofthe Federal Ministry for Economic Affairsand Energy during the conference.







annex

21

advice eagerly sought

Given recent developments in Russia, Ukraine and the

Middle East as well as the new expanded availability

of cover for sub-Saharan Africa, local exporters sought

advice far beyond normal levels last year. Even without

these factors, there was a large number of requests for

advice. In the year under review, company advisors

held more than 9,200 talks in person and over the

phone on a cross-customer and cross-subject basis

(2014: 8,000). At the exporter’s request, companyadvisors also provided assistance in negotiations

with financing banks.

Working in conjunction with associations, banks, cham-

bers of commerce and industry, chambers of foreign

trade and Germany Trade & Invest, the government-

owned German business development agency, the

mandataries held presentations on the various foreign

trade promotion instruments at 136 events in Germany

and abroad last year (2014: 154). Such events were held

throughout Germany as well as in Rio de Janeiro, Hong

Kong, Istanbul and Johannesburg, among other places.

During these presentations in other countries, many

local companies and banks as well as attorneys and

consulting companies made use of this opportunity to

talk to experts.

“The utilisation of export promotioninstruments in the light of local

conditions” was the theme of a conference held in Istanbul on 26 March 2015. Representatives

of Euler Hermes and PwC together with KfW IPEX-Bank GmbH and

Commerzbank AG updated participants on the latest

developments in export credit and investment guarantees.



the federal government is continuously working on improving the

export credit guarantees and adjusting them in the light of changing

political and economic conditions. thus, for example, it substantially

widened the scope

of cover available

for deliveries of

goods and services

to selected sub-

saharan countries

in africa in 2015.

in addition, it

extended the term of the kfw programme for refinancing hermes-

covered export credits and revised the rules for federal government

participation in loss management costs. a further new service is the

non-binding and cost-free preliminary inquiry on the inclusion of

foreign deliveries of components in cover.

development of theexport credit guarantees 23






annex


Under the three-tier model for

covering foreign-sourced content,

foreign goods and services with

a proportion of up to 30% of the

transaction are automatically

covered (Tier 1) and up to 49%

provided that certain conditions

are met (Tier 2). In justified ex -

ceptions, cover may also be

provided for transactions with

a foreign-sourced component of

more than 49% (Tier 3).

Three-tier model

24

new developments in the export credit guarantee scheme

export credit guarantees in the era of global value chains

Over the last few years, there has been a fundamental

change in the structure of global trade. National pro-

duction processes are increasingly being replaced by

global value chains. In the case of goods purportedly

“made in Germany”, the proportion of local content has

been declining for years.

Global value chains offer additional opportunities but

pose a particular challenge for Hermes Cover. As an

instrument for promoting German exports and for cre-

ating and protecting jobs in Germany, Hermes Cover is

available only for transactions in which the predomi-

nant share of goods is Germany-sourced. In consulta-

tion with businesses, the Federal Government took a

decisive step forward in 2015 towards permitting a larg-

er foreign-sourced share.

Under a three-tier model or via reinsurance with anoth-

er state export credit agency, it is already possible to

obtain cover for transactions with a foreign-sourcedproportion of over 49%. The three-tier model is

now being improved to give exporters a preliminary

indication before they submit an application as to

whether the planned transaction is eligible for Hermes

Cover despite the fact that the export transaction com-

prises mostly foreign-sourced content. This preliminary

inquiry does not require any particular form and can be

submitted free of charge.

In 2015, twelve preliminary inquiries were received, all

of which received positive decisions. In addition, three

transactions with a foreign-sourced element of over

49% were approved by the IMC in the absence of a pre-

liminary inquiry.

At the same time, the Federal Government has been

working on systematically expanding the reinsurancenetwork. With this instrument, it is possible for for-

eign-sourced content to be reinsured, thus allowing a

greater proportion to be covered.

To date, 24 reinsurance framework agreements have

been signed with other export credit agencies. In addi-

tion, the Federal Government is exploring the extent to

which this risk-sharing model can also be applied to the

private insurance market.


25






annex

federal government extends kfw programme for refinancing hermes-covered export credits

The Federal Government has extended the term of the

programme offered by development bank Kreditanstalt

für Wiederaufbau (KfW) for refinancing Hermes-covered

export credits until the end of 2020 on unchanged

terms.

Via this programme, the KfW Bank group funds the

loans provided by commercial banks to finance German

exports which are backed by an export credit guarantee

The principle underlying reinsur-

ance is this: the primary insurer

covers the risk of default in

respect of the whole amount of

the export credit. In the event of

any loss, the primary insurer

indemnifies the policyholder in

full. The foreign reinsurer in turn

bears the risk commensurate

with the proportion of the

content sourced in its country

and contributes to the indemni -

Reinsurance

issued by the Federal Government. Studies indicate that

the programme is having a positive effect on the export

finance provided by commercial banks.

The kfw programme can be utilised by all German

and non-German banks with access to buyer credit cov-

er for funding Hermes-covered buyer credits and air-

craft finance on matching-maturities terms provided

that the buyer is domiciled outside the territory of the

European Union. In addition, the loan contract must

have a term of more than three years.

fication payable by the primary

insurer on the basis of this

ratio. Reinsurance arrangements

simplify cover for export

business with a high foreign

content (multi-sourcing projects).

The policyholder also benefits

as it only has to deal with a

single credit insurer (“one-stop

shop”).


26

revised letter of interest

In a “letter of interest” (LOI), the Federal Government

confirms without assuming any binding legal obligation

that it is fundamentally willing to consider whether it

can provide cover for the transaction for which an appli-

cation has been submitted. In response to a suggestion

submitted by exporting companies, the LOI has now

been modified. As a result, it is now more meaningful

and specifically addresses the transaction for which

cover is being sought.

The availability of cover by the Federal Government

expressed in the LOI is an important competitive factor

for exporters during the bidding process.

In June 2015, more than 6,000 athletes from 50 countries trav-elled to Baku, the capital ofAzerbaijan, to take part in theEuropean Games. Organised bythe European Olympic Commit -tees, the games took place for the first time. Euracom GroupGmbH supplied 202 coaches forthe major sports event for use as transportation for the athletesand delegates during the com -petition. Produced by MAN, the buses are fully air-condi-tioned and fitted with modernexhaust purification systems. The transaction included theshipment of the buses, drivertraining and technical instruction.

The financing of the transactionwas backed by buyer credit cover provided by the FederalRepublic of Germany.


27

revisions to pre-indemnification loss management costs

The Federal Government has specified in greater detail

the conditions under which it is prepared to share pre-

indemnification loss management costs.

The Federal Government refunds part of the costs

incurred by the bank provided that the expense is rea-

sonable, the measures are taken with the approval or at

the instigation of the Federal Government and these

measures are extraordinary and involve considerable

costs.

With these revisions, the Federal Government is sup-

porting appropriate and necessary measures for early

loss management.

letter of undertaking revised

A letter of undertaking must be submitted by the ex -

porter/manufacturer as a condition for the granting of

buyer credit cover regardless of whether it is provided

on a stand-alone basis or combined with supplier credit

cover.

The letter of undertaking was revised substantially last

year. The wording was made more precise, the scope of

the undertaking reduced and a special letter of under-

taking introduced for globally active companies.






annex

The brochure “Letter of undertaking – explanatory

notes” provides exporters with an additional source of

information setting out in simple terms its use and

purpose.

federal government widening cover for additional countries of sub-saharan africa

In 2015, the Federal Government widened the scope of

cover available for the sub-Saharan countries of Sene-

gal and Uganda. At the same time, the restrictions

applicable to Kenya for cover for public-sector buyers

were lifted.

Cover can be granted for credit transactions with the

public sector in these countries provided that collateral

is provided by the national ministry of finance or the

central bank. In addition, an uninsured percentage of at

least 10% applies. The extent to which cover is available

from the Federal Government is determined on the mer-

its of the individual case.

Depending on requirements, the Federal Government

is also willing to review its cover policy for other sub-

Saharan countries.


28

export credit guarantees and sustainability

As a fundamental rule, the Federal Government does

not provide any cover for transactions which are liable

to have serious negative ecological or social ramifica-

tions. In accordance with the environmental and social

guidelines of the OECD Common Approaches, all proj-

ects and transactions coming within their scope (trans-

actions with a credit period of more than two years and

with a value of at least 15 million euros) are system -

atically reviewed to ensure compliance with the appli-

cable reference standards of the World Bank Group.

These reference standards are the World Bank Opera-

tional Safeguard Policies, the Performance Standards

of the International Finance Corporation (IFC) and the

World Bank Group’s Environmental, Health and Safety

Dieffenbacher GmbH is assembling a turn-key plant for the production of172,000 m³ of medium-density and high-density fibreboard (MDF and HDF)per year in the state of Tabasco in South-East Mexico. The German companyis responsible for the overall technical plan including the machinery forshredding spars, producing the glue and packaging the final products. It is also supplying a gas turbine for the production of electricity, the wasteheat from which will be fed back into in the MDF facility. The fibreboard is produced with minimum raw materials and energy.

Previously, Mexican furniture producers and wholesalers have had to cover almost all of their MDF requirements with imports from the UnitedStates or Chile. This will now change thanks to the new plant. Mexican company Proteak – the operator’s parent company – will be sourcing thewood required for the fibreboard from its own eucalyptus plantations with an area of 8,000 ha. Proteak has been certified by the ForestStewardship Council (FSC) and manages all areas in accordance with theFSC sustainability requirements.

700 new local jobs are being created. The structured finance for this project is being backed by manufacturing risk as well as supplier and buyer credit cover.


29






annex

Guidelines. In justified cases, on-site inspections of the

projects may be performed, the local German foreign

missions involved and external consultants called in.

If there is any evidence of serious environmental or

social risks, the transaction is reviewed regardless of

the credit period and the value of the order.

human rights and export credit guarantees

The Federal Government does not support any exports

which can be proven to disregard human rights or con-

tribute to a violation of human rights. The observance

of human rights forms a key aspect of the environmen-

tal and social risk assessment (sustainability review).

The primary benchmark for reviewing export credit

guarantees coming within the scope of the Common

Approaches is provided by the World Bank Group’s

reference standards which, depending on the nature

of the project, include the following aspects of rel -evance for human rights: occupational safety,

health and safety of the communities concerned, land

acquisition and involuntary resettlement, protection of

indigenous people, protection of cultural heritages and

stakeholder consultation.

Transactions not coming within the scope of the Com-

mon Approaches are examined on the basis of the

“watchful eye” approach to ensure compliance with

human rights.

In a preliminary step, exporters and banks

must sign an anti-bribery declaration as

part of any application for cover. In this

declaration, the company must confirm

that the export or loan contract has not

arisen as a result of any criminal acts. In

addition, it must disclose whether any

sanctions under criminal or any other law

have been imposed on it in the past five

years on account of bribery. If any evidence

of bribery-relevant circumstances comes

to light as a result of this declaration or

from any other sources, a more detailed anti-bribery examination is performed

in a second step.

Two-step anti-bribery process

antibribery measures

The avoidance of any form of bribery in export business

forms a key prerequisite for cover. If any evidence of

bribery is discovered after cover has been granted, the

exporter or bank will not receive any indemnification in

the event of a claim.

Germany has implemented the OECD’s “Recommenda-

tion on Bribery and Officially Supported Export Credits”

of 18 December 2006 in a two-step procedure.


30 This review analyses internal measures, processes and

structures for preventing and combating corruption. In

addition, it illuminates the circumstances leading to the

transaction and identifies the selling, commission and

fee expenses involved.

Pending or ongoing antibribery investigations into a

company or person trigger the more detailed anti brib -

ery review.

In 2015, 75 companies (including group companies)

were subject to such detailed antibribery reviews. This

is equivalent to 6.7% of the 1,124 policyholders submit-

ting applications for Hermes Cover in 2015.

The antibribery processes applied undergo constant

review and revision. In its last assessment, OECD rated

the German measures positively.

government export credit guarantees in the energy sector

At the climate summit of Paris in December 2015, the

international community agreed on a joint approach for

combating climate change. Signed by 195 nations, the

treaty stipulates that global greenhouse emissions are

not to rise any further in the medium term.

The Federal Government has for a long time expressed

its commitment to a global energy rethink in order to

lower CO2 emissions permanently. This approach is

also reflected in cover policy for the energy sector. For

example, renewable energy and climate protection

projects are particularly promoted through long credit

periods of up to 18 years.


31






annex

Volume

export credit guaranties for renewables in million eur

2011 2012 2013 2014 2015

1,166.0

715.4

499.2

1,084.7972.9

export credit guarantees for renewable energies

As in previous years, the Federal Government again

provided Hermes Cover for numerous projects in the

re newable energies segment in 2015. These chiefly

involved the delivery of goods and services for wind

power systems. In addition, export credit guarantees

were provided for biomass, solar and hydropower facil-

ities. Total cover provided in the renewable energies

segment came to 972.9 million euros (2014: 1.1 billion

euros). Among other things, cover was provided for

projects in Turkey, Uruguay and South Africa.

In restructuring its energy system, Uruguay is placing store by renewable energies, which it is now using to cover morethan half of its primary energy consumption. One of the main projects in this connection is the construction of the“Pampa” wind farm, which will be generating up to 640gigawatt hours of electricity, i.e. sufficient to supply around180,000 homes. The wind farm is being assembled in asparsely populated region in the heart of Uruguay and will be going on line in mid-2016.

Hamburg-based company Nordex SE is shipping 59 efficientwind power systems to Uruguay for the project and also handling service and maintenance for a period of at least ten years. The project is being financed by KfW IPEX-Bank andBayern LB. The Federal Republic of Germany is backing theproject, which is structured in the form of project finance, with buyer credit cover and supplier credit cover. The pictureshows wind power systems of the same type.


32

cover available for coal-fired power stations– rules valid from 1 january 2017 (simplified depiction)

Size of power station

Steam pressure > 240 bar and ≥ 593 °Csteam temperature

or emissions < 750 g CO2/kWh

Steam pressure < 221 bar or emissions > 850 g CO2/kWh

Credit period 12 years

Ineligible

Ineligible


Credit period 10 years,

in IDA-eligible countries only (1), (2)

Ineligible



in IDA-eligible countries only (1), (2)


in IDA-eligible countries only (1)

> 500 MW ≥ 300 - 500 MW < 300 MW

Steam pressure > 221 bar and > 550 °Csteam temperature

or emissions between 750 and 850 g CO2/kWh

(1) IDA-eligible countries: World Bank Group country classification. It refers to developing countries whose credit rating in the interna-tional capital markets is so low that they are not eligible for any World Bank loans. As they generally only have very low per-capitaincome (the maximum is revised each year), they receive particularly favourable terms from the International DevelopmentAssociation (IDA).

(2) This power plant category also includes exports to other countries provided that they have an electrification rate of < 90% accordingto recent data from the International Energy Agency as of the date of the application.


33






annex

general exclusion of cover for nuclear installations

In line with previous practice, Hermes Cover is not avail-

able for the delivery of goods and services for nuclear

power stations. This basic exclusion does not apply to

transactions whose purpose is to enhance the safety

of existing facilities or are required for the shutdown,

dismantling and disposal of nuclear power stations.

Likewise, goods and services not related to commer-

cial electricity production, e.g. research reactors and

nuclear medicine equipment, are exempt from this

exclusion.

smart grids added to oecd sectorunderstanding on climate change

Adopted in September 2015, the rule provides for peri-

ods of up to 15 years for government-guaranteed export

credits in the case of investments in smart grids. Smart

grids ensure optimum grid utilisation without compro-

mising reliability. Spending on such projects helps to

reduce emissions of greenhouse gases.

government export promotion for coal-fuelled power stations

The sector understanding on coal-fired elec -tricity generation projects, which the OECD

adopt ed in November 2015, stipulates that export credit

guarantees are only to be provided for the technologi-

cally most advanced and efficient technologies for the

installation and modernisation of coal-fuelled power

stations.

The extent to which export credit guarantees are avail-

able for coal-fuelled power stations depends on the

size of the power station, the underlying technology

and the buyer country. The rules, which are illustrated

in simplified form on page 32, take effect from 1 January

2017. In addition, projects may only be backed if they

are consistent with the national climate protection strat-

egy of the destination country and no alternatives with

a lesser climatic impact are available. The understand-

ing provides for exceptions in the case of energy islands

and countries with an electrification rate of less than

90%.

Prior to the OECD sector understanding taking effect

on 1 January 2017, the delivery of goods and services

in connection with coal-fuelled power stations will con-

tinue to be reviewed in accordance with the current

environmental and social rules.

The Federal Government did not provide any cover for

the delivery of goods and services in connection with

coal-fuelled power stations in 2015 (2014: around 28

million euros).




despite numerous economic and political crises, the federal government

maintained the availability of cover for the delivery of goods and

services to difficult countries almost without any changes last year.

cover was widened for selected countries of sub-saharan africa.

the positive performance of special forms of cover over the last

few years continued. once again, the export credit guarantees issued

by the federal government made a valuable contribution to supporting

the maritime industry in germany. the volume of cover provided for

project finance grew almost three-fold.

35






annex


36

1 The premium is calculated according to eight country risk groups,

in seven of which (1 = best risk, 7 = worst risk) the calculation

is based on a set formula. In countries assigned to country risk

group 0 (OECD high income countries and the countries of the

Eurozone) a market-oriented premium is charged.

types of collateral such as government guarantees,

these may, for example, include certain benchmark

indicators or special requirements with respect to the

buyer’s balance sheet. One proven instrument for man-

aging risk is the establishment of a country ceiling.

A ceiling is the maximum credit limit available for a giv-

en country. If it becomes evident that a ceiling will be

exhausted in full, the IMC will consider whether a new

one can be established. As of 31 December 2015, ceil-

ings had been defined for the following eight countries:

Argentina, Belarus, Cuba, the Dominican Republic, Ser-

bia, Sri Lanka, Ukraine and Uzbekistan.

In contrast to conventional export business, the credit

risks to which project and structured finance is exposed

are usually located outside the buyer’s country and

depend more on the economic viability of the project or

the stability of the financial collateral model than on the

general country risk.

The country risk is evaluated annually at an OECD level

for each country. Countries are assigned to one of eight

risk groups1 on the basis of a macroeconomic model.

These OECD country risk groups are binding on all OECD

member states. In the year under review, the risk situa-

tion improved in six countries due to favourable eco-

nomic and financial developments, as a result of which

they were placed in a higher OECD country risk group1.

oecd country risk categories

Bangladesh

Benin

Brazil

Côte d’Ivoire

El Salvador

Ghana

Hungary

new

5

6

4

6

5

6

4

previously

6

7

3

7

4

5

0

Maledives

Montenegro

Mozambique

Romania

Russia R.F.

Rwanda

South Africa

new

6

7

7

3

4

6

4

previously

7

6

6

4

3

7

3

country cover policy

The IMC defines an appropriate cover policy for each

country on the basis of its specific risk. It governs the

scope and the conditions for the availability of cover

and forms the basis for decisions on the granting of

export credit guarantees. The IMC reviews its cover pol-

icy for a country in the event of any change in its risk

situation.

In its cover policies, the IMC normally also distinguishes

between short-term and extended-term cover as well as

between public and private buyers.

short-term export business with countries outside

the EU and the OECD core countries with credit peri ods

of up to one year can mostly be covered free of any re -

strictions. However, certain forms of collateral may be

necessary in individual cases.

The same thing also applies to cover for the delivery

of goods and services on medium and long-termpayment terms. In countries for which there are limits

on the availability of cover due to existing risks, risk-mit-

igation measures may be applied. In addition to certain


37






annex

Herrenknecht AG is supplying four tunnel boring machines to Mexico. Two of them are to be used in the construction of a dual tunnel with a length of 4.7 km through the Cerro de lasCruces mountain. The purpose is to ease traffic congestionbetween Mexico City and Toluca, a rapidly growing city located60 km away, by building a new railway line to link the twocities. Accordingly, the project will be making a positive con -tribution to reducing emissions.

The two other tunnel boring machines are being used to construct a sewage tunnel in Mexico City measuring around 13 km in length to prevent the frequent flooding occurring after heavy precipitation. The new sewage tunnel will simulta-neously be used as a collection drain to lower the risk of flooding in the southern and eastern parts of the megacity.

The Federal Government is issuing combined buyer credit and supplier credit cover.


new guarantees for latinamerican emergingeconomies and developing countriesin million eur

Brazil

Mexico

Uruguay

Argentina

Colombia

Short-term

Medium and long-term Subtotal 2015: 2,401.5 (73.5%)

Total 2014: 6,018.7 Total 2015: 3,266.2 (100%)

20152014

20152014

20152014

20152014

20152014

1,122.81,022.6

445.3

299.935.0

275.0223.9

258.5376.3

362.6

country ceilingsin million eur

Argentina(private sector only)

DominicanRepublic

Cuba (medium and long-term)

Cuba (short-term)

100

200

50

25

38

emerging economies anddeveloping countries

latin america and the caribbean

Last year, the Federal Government issued

export credit guarantees in the amount of 3.3

billion euros (2014: 6 billion euros) for the

delivery of goods and services to Latin Amer-

ica and the Caribbean. This is equivalent to

12.6% of total cover (2014: 24.3%).

This substantial decline over the previous

year reflects the exceptional situation in this

region arising in 2014, when the Federal Gov-

ernment granted cover worth 3 billion euros

for the delivery of four cruise ships to Ber -

muda. As no projects of a comparable scale

arose in 2015, cover for this region returned

to the level seen in earlier years. As it is, this

is remarkable given the deterioration of eco-

nomic conditions in numerous Latin Ameri-

can countries. The sharp decline in the price

of oil is particularly taking its toll on countries

that export raw materials, such as Brazil, Mex-

ico, Venezuela and Colombia.

American emergingeconomies and

developing countries:

American Virgin Islands,Anguilla, Antigua and

Barbuda, Argentina, Aruba,Bahamas, Barbados,

Belize, Bermuda, Bolivia,Brazil, British Virgin Islands,

Cayman Islands, Chile,Colombia, Costa Rica, Cuba,

Curaçao, Dominica,Dominican Republic,Ecuador, El Salvador,

Falkland Islands, Grenada,Guatemala, Guyana,

Haiti, Honduras, Jamaica,Mexico, Montserrat,

Nicaragua, Panama,Paraguay, Peru, Puerto Rico,

St. Kitts and Nevis, St. Lucia, St. Vincent and

the Grenadines, Sint Maarten, Suriname,

Trinidad and Tobago, Turks and Caicos Islands,

Uruguay, Venezuela.

The country for which the highest volume of

cover was granted in this region was brazil.

In 2015, transactions worth 1.1 billion euros

(2014: 1.0 billion euros), including deliver -

ies worth 74 million euros for the expansion

and modernisation of a painting plant, were

backed by Hermes Cover.

uruguay was responsible for the largest sin-

gle new transaction: the Federal Government

provided combined supplier and buyer credit

cover worth 266 million euros for the con-

struction of a wind farm comprising 59 wind

power systems. The Federal Government

issued cover for other large-scale projects in

argentina (tissue paper production line)

and mexico (production line for medium and

high-density fibreboards).


39






annex

Heidenheim-based Voith Paper GmbH & Co. KG sup-plied a full-scale tissue paper process line to CelulosaArgentina. The South American company already operates pulp, paper and sawmills. With the new energy-efficient production line, it will be producingaround 30,000 t of toilet tissue and kitchen towels ayear. This is because, looking forward, CelulosaArgentina would like to use its surplus pulp outputitself rather than selling it in the market. This is alsovery advantageous for ecological reasons as it is no longer necessary to dehydrate the pulp and to thenrehydrate it at another location. This protects the fibres and saves energy. Given the continued growth of the tissue market and the surplus pulp production, it is particularly important for Celulosa Argentina toexpand its value chain. The Federal Government hasissued manufacturing risk and supplier credit cover.


African emergingeconomies and


Algeria, Angola, Benin,Botswana, Burkina Faso,

Burundi, Cameroon, Cape Verde, Central African

Republic, Chad, Comoros,Congo, Congo (Democratic

Republic), Côte d’Ivoire,Djibouti, Egypt, Equatorial

Guinea, Eritrea, Ethiopia,Gabon, Gambia, Ghana,Guinea, Guinea-Bissau,Kenya, Lesotho, Liberia,

Libya, Madagascar, Malawi, Mali, Mauritania,

Mauritius, Morocco,Mozambique, Namibia,Niger, Nigeria, Rwanda, Sâo Tomé and Principe,

Senegal, Seychelles, SierraLeone, Somalia, South

Africa, South Sudan, St.Helena, Sudan, Swaziland,

Tanzania, Togo, Tunisia,Uganda, Zambia, Zimbabwe.

40

africa

In 2015, the Federal Republic of Germany

granted cover amounting to 3.6 billion euros

(2014: 1.7 billion euros) for the delivery of

goods and services to Africa. This corresponds

to 14% of total cover (2014: 6.8%).

This doubling in the volume of cover com-

pared with the previous year is chiefly due to

guarantees issued for a large-scale project in

egypt. The Federal Government provided

supplier and buyer credit cover worth 1.4 bil-

lion euros for the construction of a gas and

steam power station. Offers of cover were

also provided for the delivery of 100 locomo-

tives and a further two gas and steam power

stations in Egypt.

In sub-saharan africa, the Federal Govern-

ment widened the scope for cover for Kenya,

Senegal and Uganda in 2015, thus marking a

continuation in a development which had

commenced in December 2014. As a result,

export credit guarantees have been avail able

for deliveries of goods and services to public-

sector buyers in Ethiopia, Ghana, Mozam-

bique, Nigeria, Tanzania, Senegal and Uganda

since the end of 2014. A ceiling was lifted for

angola. Cover is now available for credit-

based transactions with the public and pri-

vate sector in kenya free of any restrictions

on the volume. Since the decision to widen

the availability of cover, eight applications for

Hermes Cover have been received for the

delivery of goods and services to these coun-

tries.

In the year under review, 62 applications for

cover with a total value of around 2.4 billion

euros were received for the entire sub-Saha-

ran region (including South Africa) in the year

under review (2014: 61 applications, total val-

ue of 1.7 billion euros).

Egypt

South Africa

Algeria

Tunisia

Nigeria

20152014

20152014

20152014

20152014

20152014

new guarantees for african emergingeconomies and developing countriesin million eur

Short-term


Total 2014: 1,669.1 Total 2015: 3,614.4 (100%)

2,350.5432.8

387.5

151.4198.8

124.368.3

87.7115.0

232.5


41






annex

Wietmarscher Ambulanz- und Sonderfahrzeug GmbH (WAS) received another largeorder from Egypt. This time, the mid-size company supplied 250 ambulances based on the Mercedes-Benz Vito to the Egyptian Ministry of Health. This means that a total of some 2,800 fully equipped WAS ambulances are now in service in towns andrural regions in Egypt. The vehicles are veritable clinics on wheels: All ambulance functions including the interior climate and lighting can be set via a special controlpanel. In addition, they are fitted with compressed air and oxygen valves in the ceilingas well as a “mediboard” with connections for defibrillators, syringe pumps and monitors. The Federal Republic of Germany issued contract bond guarantees withcounter-guarantees for the project.


42

asia

In the year under review, the German Federal

Government issued export credit guarantees

worth 5.9 billion euros (2014: 8.1 billion eu -

ros) for the delivery of goods and services to

Asia. This is equivalent to 22.7% of total cover

(2014: 32.6%).

More than half of the cover volume (3.2 billion

euros) in this region was accounted for by the

countries of Eastern Asia (2014: 3.5 billion

euros).

In the year under review, the German Federal

Government issued export credit guarantees

worth 1.1 billion euros (2014: 1.6 billion euros)

for the delivery of goods and services to

South and Central Asia.

Total cover provided for the Middle East came

to 1.6 billion euros in the year under review

(2014: 3 billion euros).

At 1.2 billion euros in 2015, china accounted

for the greatest proportion of new business

in the region as in previous years (2014: 1.4

billion euros). The largest transactions with

China covered by the Federal Government

included the delivery of two continuous an -

nealing systems and a continuous galvanis-

ing line for a cold-rolling mill as well as guar-

antees for Airbus aircraft.

In indonesia, the Federal Government pro-

vided cover for goods and services worth

587 million euros (2014: 303 million euros).

Manufacturing risk, supplier credit and con-

tract bond cover worth around 230 million

euros was provided for the turn-key construc-

tion of a hot strip mill.

China PR

India

Dubai UAE

Indonesia

Saudi Arabia

20152014

20152014

20152014

20152014

20152014

new guarantees for asian emergingeconomies and developing countriesin million eur

Short-term


Total 2014: 8,064.9 Total 2015: 5,862.6 (100%)

1,244.71,358.3

621.8

615.9517.9

586.9302.6

498.61,930.8

1,119.0

Asian emerging economies and


East Asia:Brunei Darussalam, Cambodia,

China PR, Hong Kong, Indonesia, Korea DPR, Laos,Macao, Malaysia, Mongolia,

Philippines, Taiwan, Thailand,Timor-Leste, Vietnam

South and Central Asia:Afghanistan, Armenia,

Azerbaijan, Bangladesh, Bhutan, Georgia, India,

Kazakhstan, Kyrgyzstan,Maldives, Myanmar,

Nepal, Pakistan, Sri Lanka,Tajikistan, Turkmenistan,

Uzbekistan.

Middle East:Bahrain, Iran, Iraq,

Jordan, Kuwait, Lebanon, Oman, Palestine

(autonomous territories), Qatar, Saudi Arabia, Syria,

United Arab Emirates, Yemen.

China PR

Indonesia

Hong Kong

Taiwan

Vietnam

20152014

20152014

20152014

20152014

20152014

new guarantees for east asian emergingeconomies and developing countriesin million eur

Short-term


Total 2014: 3,525.6 Total 2015: 3,224.6 (100%)

1,244.71,358.3

586.9

354.3338.2

338.8413.0

273.2269.7

302.6


43






annex

Indorama Synthetics is installing a new line for the production of high-quality cotton yarn on the Indonesian island of Java. In this way, the company wants to expand production capacities by around 25% andadditionally strengthen its leading position in Indonesia. The textile machinery is beingsupplied by German exporters SchlafhorstZweigniederlassung der Saurer GermanyGmbH & Co. KG., Trützschler GmbH & Co. KGand Rieter Ingolstadt GmbH.

The Federal Government is backing the project with isolated buyer credit cover. A syndicate comprising Düsseldorf bank IKBDeutsche Industriebank AG (lead manager)and Frankfurt-based bank DZ BANK is providing the finance.


44 At 273 million euros, cover provided for busi-

ness with vietnam was slightly up on the pre-

vious year (270 million euros). Among other

things, the Federal Government issued guar-

antees for the delivery of two Airbus aircraft

to this country.

Total cover provided for india dropped to

622 million euros in the year under review

(2014: 1.1 billion euros). This decline is chiefly

due to muted demand in the challenging

steel market as well as the absence of any

cover for Airbus aircraft.

The Federal Government provided total cov-

er worth 99 million euros for the delivery of

goods and services to uzbekistan, almost

twice the volume recorded in the previous

year (2014: 54 million euros). Thus, for ex -

ample, manufacturing risk, buyer credit and

supplier credit cover was provided for the

delivery, construction and start-up of a cop-

per foundry.

The reduction by half in cover from 3 billion

euros to 1.6 billion euros is primarily due to

conditions in saudi-arabia, where the vol-

ume of cover dropped from 1.9 billion euros

in 2014 to 499 million euros due to the ab -

sence of any major projects.

By contrast, demand for government cover

for deliveries of goods and services to dubairemains strong. At 616 million euros, the

country accounted for roughly one third of

Hermes-covered deliveries to this region.










Uzbekistan.





new guarantees for south and central asian emerging economies and developing countriesin million eur

India

Uzbekistan

Kazakhstan

Bangladesh

Azerbaijan

Short-term

Medium and long-term Subtotal 2015: 955.2 (90.3%)

Total 2014: 1,562.7 Total 2015: 1,057.4 (100%)

20152014

20152014

20152014

20152014

20152014

621.81,119.0

98.7

90.3121.6

75.377.1

69.112.8

53.8


Sri Lanka

Uzbekistan

100

150


45






annex

The pharmaceuticals industry has developed into one of the most important sectors of the Bangladesh economy. In response to the steady growth in demand,Beximco Parmaceuticals Ltd. is expanding and modernising its production facilitieslocated close to the capital city of Dhaka. The machinery for manufacturing and packaging pharmaceutical products is being supplied by the Hamburg-based company CCC Machinery GmbH.

This business is considered to be particularly eligible for cover as it ensures supplies of high-quality and inexpensive pharmaceuticals to the general population. In addition,the project is creating roughly 300 new jobs and also helping to protect employment at CCC Machinery GmbH as well as many small and mid-size contractors in Germany.

The Federal Government has provided combined supplier and buyer credit cover for the project.


46 The largest single transactions entailed cov-

er for aircraft deliveries to Dubai and abudhabi.

One of the most dominant issues for German

exporters in the year under review concerned

the future outlook for business with iran.

Immediately after agreement had been

reached with Iran on a comprehensive treaty

to settle the conflict surrounding the Iranian

nuclear programme that had originally arisen

in 2002, the German Minister for Economic

Affairs and Energy, Sigmar Gabriel, travelled

to Teheran in July 2015 for talks with high-

ranking political and business representa-

tives on the post-sanction era.

Since then, numerous discussions have been

held at the expert level to create the technical

basis for the resumption of trade relations.

The Federal Government expects strong de -

mand for Hermes Cover for Iran as soon as it

becomes available again. Specific opportu -

nities for German companies should partic -

ularly arise in the automotive, mechanical

engineering, energy and environmental en -

gineering, water and waste management,

agriculture and health care industries. There

is a strong need for capital spending and

demand for German goods is traditionally

strong in Iran.

Dubai UAE

Saudi Arabia

Abu Dhabi UAE

Kuwait

Sharjah UAE

20152014

20152014

20152014

20152014

20152014

new guarantees formiddle eastern countriesin million eur

Short-term


Total 2014: 2,976.6 Total 2015: 1,580.6 (100%)

615.9517.9

498.6

201.435.6

56.738.2

53.465.2

1,930.8










Uzbekistan.






47






annex

Around 90% of Iraqi households use diesel-fuelled generators as the publicgrid does not offer sufficient electricity. This situation is to be remedied with the construction of the Khormala power station in northern Iraq with antotal output of 1,200 megawatts. For this purpose, Siemens AG will be shippingseveral gas turbines and generators to Iraq.

The power station is to substantially reduce the frequent power outages andprovide the population with a reliable and inexpensive source of electricity.This will make it possible to deactivate the environmentally harmful diesel generators. What is more, it should spur the region’s economic development as the improved availability of electricity will encourage smaller companies to settle there. “GTR Global Trade Review” named the project “Best Middle Eastern ECA Finance Deal of the Year 2014“. The transaction is being supported by supplier and buyer credit cover provided by the FederalRepublic of Germany.


European countries (without industrialised

countries):

Albania, Belarus,

Bosnia and Herzegovina,Bulgaria,

Croatia, Kosovo,

former Yugoslav Republic of Macedonia,

Republic of Moldova,Montenegro,

Romania, Russia RF,

Serbia, Turkey,

Ukraine.

48

europe (excluding industrialised countries)

The Federal Government issued export cred -

it guarantees of 6.6 billion euros (2014: 4.9

billion euros) for the delivery of goods and

ser vices to Europe (excluding industrialised

countries). This translates into 25.4% of total

cover (2014: 19.9%).

At 5.8 billion euros, Russia and Turkey ac -

counted for a large part of the cover provided

for this region.

The large volume of cover of 3.6 billion euros

provided for russia (2014: 2.2 billion euros)

primarily relates to a single large project. The

Federal Government provided manufacturing

risk, supplier credit and contract bond cover

worth 1.7 billion euros for the construction of

an ethylene plant. Excluding this transaction,

the volume of cover was roughly unchanged

over the previous year. The decline in German

exports in the wake of the muted Russian

economy was almost completely offset by the

increased cover requirements.

Business with ukraine declined sharply, with

the volume of cover dropping to 293 million

euros in 2015 (2014: 518 million euros).

By contrast, demand for government export

credit guarantees for deliveries of goods and

services to turkey remained strong last year.

At 2.1 billion euros, the volume of cover was

higher than in the previous year (2014: 1.8 bil-

lion euros). The largest transaction in Turkey

for which an export credit guarantee was

issued entailed the delivery of turbines and

generators for a gas-fuelled power station. In

addition, the installation of numerous wind

farms was made possible with the provision

of Hermes Cover.


Serbia

Ukraine

Belarus

200

250

80

Russia R.F.

Turkey

Ukraine

Belarus

Serbia

20152014

20152014

20152014

20152014

20152014

new guarantees for european countries (without industrialised countries)in million eur

Short-term


Total 2014: 4,932.1 Total 2015: 6,564.5 (100%)

3,613.62,224.4

2,141.3

293.1517.8

201.8201.6

127.4110.1

1,754.1







annex

49With 18 hospitals and 13 day clinics, the Acibadem Clinic Group is the leading private-sector healthcare provider inTurkey. ACENDIS Handels GmbH has supplied equipment for several hospitalsincluding a newly constructed one. In the year under review, the Hannover-based company shipped medical andnon-medical products worth 20 millioneuros to the Acibadem Clinic Group inTurkey, including anaesthesia, ventilation,radiology, ECG and ultrasound equip-ment, laboratory fittings and surgicalinstruments. It also supplied hospital furniture, special doors and facade panels. The transaction was backed bysupplier and buyer credit cover providedby the Federal Republic of Germany.


Industrialised countries:

Andorra, Australia, Austria,Belgium, Canada,

Czech Republic, Cyprus,Denmark, Estonia, Finland,

France, Germany, Greece,Hungary, Iceland, Ireland,

Israel, Italy, Japan, Latvia, Liechtenstein,

Lithuania, Luxembourg, Malta, Monaco,

Netherlands, New Zealand,Norway, Poland, Portugal,

San Marino, Singapore, Slovak Republic, Slovenia,

Spain, South Korea, Sweden, Switzerland,

United Kingdom, United States, Vatican City

and their dependent territories: BES Island,

Ceuta and Melilla, Gibraltar,Greenland, Guadeloupe,

(French) Guiana, Martinique,Mayotte, Réunion,

St. Pierre and Miquelon.

50

industrialised countries

The subsidiarity principle (private sector be -

fore public sector) applies to government ex -

port credit guarantees. This is why cover tra-

ditionally tends to account for only a small

portion. Hermes Cover is only available where

the private sector is unable to provide com-

parable cover due, for example, to very long

credit periods or to the scale of the project

involved. Consequently, the Federal Govern-

ment mostly issues export credit guarantees

for transactions in developing countries and

emerging markets.

The Federal Government issued export credit

guarantees amounting to 6.5 billion euros in

2015 (2014: 4.1 billion euros) for the delivery

of goods and services to industrialised coun-

tries. This is equivalent to 25.2% of total cov-

er (2014: 16.4%). The relatively high volume

of cover compared with the previous year

relates to four large-scale projects. Thus, the

Federal Government provided Hermes Cover

for the construction of two cruise ships each

worth 1.9 billion euros for delivery to the

united states and italy.

20152014

20152014

20152014

20152014

20152014

new guarantees for industrialised countriesin million eur

United States

Italy

South Korea

Norway

Switzerland

Short-term


Total 2014: 4,063.3 Total 2015: 6,521.6 (100%)

2,638.31,162.5

1,910.5

369.6821.9

308.80.0

296.4353.4

15.3


51






annex

In the year under review, Greek company EZA Protypos HellenicBrewery (EZA) started up an efficient canning line for beer with a capacity of 25,000 half-litre units per hour. The supplierwas KRONES AG from Neutraubling in Bavaria. In addition, the system is also to be used for canning sparkling water and refreshment drinks from 2016. The brewery has an advantageous location in central Greek close to the main transportation route linking Athens and Thessaloniki. With this investment, EZA wants to increase sales of beverages and additionally expand the proportion of its export business.The Federal Republic of Germany is supporting the project with supplier credit cover.


52

special forms of cover

project finance and structured finance

project finance structures are generally selected

for large-scale projects which cannot or should not be

carried on the balance sheets of the companies in -

volved. A legally and economically independent project

entity, which must be capable of generating sufficient

cash flow to cover the operating costs and debt service,

is established. Accordingly, the issue of an export credit

guarantee for project finance is contingent upon the

completion of a comprehensive analysis of the project

risks as well as the economic viability of the project. In

this connection, the Federal Government attaches par-

ticular importance to the banks, suppliers and investors

involved in the project taking a reasonable share of the

risks.

In 2015, export credit guarantees were granted for six

projects with a combined value of just under 1.4 billion

euros. This was a substantial increase over the previous

year in which cover volume had come to 584.5 million

euros (three projects).

New cover was provided for a silicon foundry in Iceland,

a steel and milling plant in the United States and four

onshore wind farm projects in Lithuania, Montenegro,

Ireland and Uruguay.

The six projects reflect the range of successful project

finance transactions. For one thing, they comprise proj-

ects in established markets for which cover is not avail-

able in the private-sector insurance market due to their

scale and the long-term nature of the credit periods

(e.g. United States). For another, they include projects

in emerging markets cover for which allows German

exporters to enter the market. One example of this is

the cover provided in 2015 for a wind farm in Montene-

gro, the first commercial wind power plant in this South

Eastern European country.

In addition to the six projects for which export credit

guarantees were provided in the year under review, the

Federal Government made two offers of cover with a

volume of 188.1 million euros for onshore wind farms in

Turkey and Uruguay.

The volume of new applications stood at around 2.4 bil-

lion euros at year-end. This and the large number of

project presentations and inquiries (39 letters of inter-

est in 2015) testify to the continued strong demand for

cover for project finance transactions. Most of the ap -

plications and inquiries come from the power industry

– particularly onshore wind farms – and the petro-

chemicals, oil and gas sector. Regionally, they continue

to concentrate on the Middle East, Central America and

Eastern Europe including Turkey and Russia. The viabil-

ity of these projects not least of all depends on current

market trends such as the oil prices.

In addition to new applications, there is also a growing

focus on the part of exporters, banks and sponsors

again on projects for which applications were received

in the past with the expectation that they would be

implemented in 2016.


53With multi-sourcing projects in particular, there is scope

for integrating Hermes-covered tranches in the case of

German principal contractors as well as in projects in

which German subcontractors supply a significant part

of the goods and services to foreign principal contrac-

tors. Small and mid-size companies in particular also

benefit from this.

In addition to export credit guarantees for project

finance, cover is also available for structured fi -nance. Structured finance allows buyers with insuffi-

cient creditworthiness to finance sizeable investment

projects (e.g. large-scale investments). No new cover

was provided in this segment in 2015.






annex

One of the world’s most efficient silicon plants is currentlybeing built in Burnsville, Mississippi in the United States. Anannual production capacity of around 36,000 tons of siliconis planned, equivalent to around 12% of the current US mar-ket demand. The site of the project is located very favourablyin terms of infrastructure. The raw materials required for the production of silicon (particularly silica sand) are avail-able in sufficient quantities in the neighbouring states.

Raw silicon is an important commodity used primarily in the chemical industry but also for the production of aluminium and steel products. As a preliminary product for polysilicon, it is also used in the production of solar cells.In connection with this project, Düsseldorf-based companySMS group GmbH is supplying crucial technology in the form of two submerged arc furnaces for the pro duction of rawsilicon, systems for handling the raw material and productand a dust extraction system. One particular feature is therotary furnace vessels which prevent cold spots in the meltand deposits of carbides on the furnace walls.

The Federal Republic of Germany is backing the project, which is structured as project finance, with manufacturing risk, buyer credit and supplier credit cover.


54

aircraft business

For the first time in five years, demand for air travel

declined last year, with global airlines’ passenger rev-

enues dropping by 5.7% in 2015. The decline in freight

business was even greater. Despite this, a number of

airlines increased their capacities under their long-term

strategies. This primarily applied to airlines in the Mid-

dle East and in Asia-Pacific.

Despite the softer demand, airlines’ economic situation

improved, with average operating margins widening

to 7.7% particularly as a result of the steady decline in

kerosene prices. Northern American airlines in particu-

lar achieved high profitability.

The volume of Airbus finance jointly sponsored by

Coface (France), ECGD (United Kingdom) and Euler

Hermes (Germany) declined again last year. Given the

In the year under review,Airbus supplied 635 aircraft, of which 7% werebacked by an export credit guarantee issued by the Federal Republic of Germany.


55high liquidity available in the commercial market, banks

were able to provide long-term funding without re -

course to government support.

What is more, an increasing number of aircraft were

financed with the involvement of leasing companies.

Last year, the initial recipients of around 40% of Airbus

deliveries were leasing companies, which then prompt-

ly leased their aircraft to the airlines. With this struc -

ture, the airlines indirectly benefited from what in some

cases was the very strong economic position of the

large leasing companies and were thus able to lower

their funding costs.

As a result, the proportion of Airbus deliveries covered

by the three European export credit agencies shrank to

just 7% of the total, with most of the aircraft for which

export credit guarantees were issued sold to Asian buy-

ers. Whereas none of the aircraft financing transactions

covered had been funded by bond issues in 2014, this

form of finance was utilised for four transactions in 2015

with a combined total value of 388 million US dollars

for which the Federal Government provided cover as

reinsurer.

With 1,036 new orders (2014: 1,796), Airbus currently

has a total of 6,787 orders on its books (2014: 6,386). It

delivered 635 aircraft in the year under review (2014:

629). Of these, 45 (2014: 51) were backed by export

credit guarantees.

ship business

Conditions in the international ship building industry

remain tense. Even so, the German maritime industry

was able to assert itself impressively in 2015 particularly

in its core businesses, namely passenger, special-pur-

pose and RoRo ships. Against this backdrop, the export

credit guarantees issued by the Federal Government

made a further valuable contribution to supporting the

maritime industry in Germany, repeating the high level

recorded in 2014.

In civil shipbuilding, export credit guarantees worth

4.5 billion euros were issued for new business. This was

joined by cover for military shipbuilding amounting to

585 million euros, resulting in total cover of 5.1 billion

euros (2014: 5.5 billion euros). In addition, there were

offers of cover worth 429 million euros.

Once again, Meyer Werft was awarded major large-scale

contracts for the construction of cruise ships for cruise

companies Carnival and RCCL, which will ensure full

capacity utilisation until 2020. Neptun Werft was able

to defend its market leadership in river cruise ships and

strengthen its business relationship with Viking River

Cruises. In special-purpose shipbuilding, the Federal

Government provided cover for two offshore oil and gas

supply ships and a RoRo ferry for Flensburger Schiffbau-

Gesellschaft FSG. In addition to strong demand for

ships built at German shipyards, there is growing inter-

est on the part of suppliers of maritime components in

the Federal Government’s export credit guarantees.

Thus, cover was provided for the delivery of tank sys-

tems for a tanker to be built in China.






annex


total commitments (exposure) 10-year overview by regions in million eur

Africa

America

Asia

Europe

'15'06 '07 '08 '09 '10 '11 '13'12 '14

357

13,389

605

13,385

944

8,357

2,457

13,126

6,301

14,166

483

13,656

1,067

5,869

6,274

12,714

6,450

10,5813,753

6,900

4,654

14,734

2,431

13,425

6,218

13,066

3,010

6,858

972

7,218

3,817

7,607

824

11,981

4,330

7,137

721

12,573

6,333

8,054

32,73431,021

19,614 19,954

24,272

27,681

34,97136,32333,423

16,804

number of approved applications

Russia R.F.

China PR

India

Colombia

Serbia

21

8

5

5

60

Subtotal 2015: 99 (83.2%)

Total 2015: 119 (100%)

Given the crises and conflicts all around the world,

cover for political risks plays a particularly important

role in foreign investments. German investors must

come to terms with a deterioration in underlying condi-

tions even in well-established foreign markets. Against

this backdrop, many companies consider government

support in the form of an investment guarantee to

be crucial for their activities.

In 2015, the Federal Government issued investment

guarantees worth 2.6 billion euros for 77 projects in

16 countries. Given the heightened cover requirements

for Russia, Eastern Europe was the most important

region ahead of Asia. The main countries were Russia,

China, India, Colombia and Serbia. Around one quarter

of the applications approved were submitted by small

and mid-size companies1. The services sector played

a particularly dominant role in 2015. The number of

applications submitted rose substantially by just under

70% over the previous year. The Federal Government’s

total commitment level stood at 35.0 billion euros at

the end of 2015.

Investment guarantees protect German direct invest-

ments in emerging economies, developing countries

and former transformation countries against political

risks such as expropriation, war or conversion problems.

A short digression: investment guarantees offerprotection for German investments abroad

The benefit for the companies arises from the fact that

the Federal Government intervenes with the government

of the target countries on behalf of the German investor

in order to avert any loss. Guarantees can only be

issued for investments which are eligible for cover and

are viable in terms of risk. A further condition for the

issue of a guarantee is the existence of legal certainty

in the target country; as a rule, this is deemed to be

the case if a bilateral investment promotion and protec-

tion treaty is in force between the Federal Republic

of Germany and the host country of this investment.

Generally speaking, the fee for the cover stands at 0.5%

p.a. of the risk-exposed amounts.

Applications for the issue of investment guarantees are

approved by the Federal Ministry for Economic Affairs

and Energy with the consent of the Federal Ministry

of Finance and in agreement with the Federal Foreign

Office and the Federal Ministry for Economic Cooperation

and Development in an Interministerial Committee.

The Federal Government has mandated a consortium

consisting of PricewaterhouseCoopers Aktiengesellschaft

Wirtschaftsprüfungsgesellschaft (PwC) (lead partner)

and Euler Hermes Deutschland AG with the management

of the investment guarantees.

For further details, please contact:Phone: + 49 (0)40/88 34 - 90 00

[email protected]

www.agaportal.de

56

1 Companies with a maximum of 2,000 employees or

revenues of up to 500 million euros and not members of

a larger group


The difficult market conditions also sporadically impact-

ed the transactions for which cover had been provided

in earlier years. In this connection, the Federal Govern-

ment was able to avert losses under the Hermes-cov-

ered buyer credits by overseeing restructuring activities

last year.

Despite the tense conditions in much of the global ship-

ping market, there is a large future pipeline of ships

which will be operating in profitable segments. This will

provide opportunities for German shipyards, which are

known for their reliability, and the solidly positioned

maritime components industry, which the Federal Gov-

ernment will be supporting as effectively as it can in the

face of international competition.

57






annex

River cruises are growing in popu -larity. One of the leading organisers of these cruises is Swiss shippingcom pany Viking River Cruises AG. In order to modernise and expand itsfleet, it placed an order with NEPTUNWERFT, Rostock, for ten new rivercruise ships. With a length of around135 m, they offer 190 passengersaccommodation in 95 outside cabinsand are to be used on various riversin Europe.

NEPTUN WERFT is also installing environment-friendly technology in the river cruise ships. Thus, for example, the ships possess a solarpower system which feeds electricityinto the on-board grid. In addition,modern diesel-electric engines and efficient power supply systems help to lower fuel consumption significantly.

The employment provided by theshipyard is of great importance forthe Rostock region. The German manufacturing input stands at 100%.

The Federal Republic of Germany is backing the transaction with combined export and buyer creditguarantees and contract bond cover.



at 25.8 billion euros, the volume of export credit

guarantees was up on the previous year. russia, the

united states and egypt led the list of the top ten

countries ahead of turkey. the proportion of cover

provided for exports to emerging economies and

developing countries came to 75%. claims paid

contracted by 22%. the year closed with a positive

result of 344 million euros. the accumulative

surplus for the federal budget since the scheme

was first established thus climbed to 4.2 billion

euros. outstanding risk rose to 92.4 billion euros.

business development 59






annex


new business

German exports rose in 2015, reaching a re -

cord level of 1,196 billion euros (2014: 1,134

billion euros)1. The impressive growth rates

for German foreign trade are being spurred by

globalisation effects such as the internation-

alisation of production processes. New cover

provided also rose by 4.4% over the previous

year to 25.8 billion euros in 2015. Conse-

quently, the volume of cover again substan-

tially exceeded the level prevailing prior to

the economic and financial crisis. 2.2% of all

German exports were secured with Hermes

Cover in 2015.

There was a small shift in the ratio of new

cover between public and private buyersin fa vour of public buyers. 85% of the indi -

vidual cover was for private and 15% for pub-

lic buyers (previous year: 87% private buyers

and 13% public buyers).

60

top ten markets for new guaranteesin billion eur

Russia R.F.

United States

Egypt

Turkey

Italy

China PR

Brazil

Dubai UAE

India

Indonesia

2.22

1.16

0.43

1.75

0.02

1.36

1.02

0.52

1.12

0.30

3.61

2.64

2.35

2.14

1.91

1.24

1.12

0.62

0.62

0.59

2015

2014 Subtotal 2015: 16.84 (65.2%)

Total 2015: 25.83 (100%)

1 Source: Foreign trade statistics of the Federal

Statistical Office

development of new guarantees in billion eur

2007 2008 2009 2010 2011 2012 2013 2014 2015

17.0

20.722.4

32.529.8 29.1 27.9

24.8 25.8


61






annex

number and volume of applications

Application volumes remained high in 2015

again despite the decline in the number of

ap plications submitted. At the same time,

demand for cover for large-scale projects

continued to grow. Thus, the number of large-

scale transactions valued over 50 million

euros rose from 41 to 51 (79% of the single

transaction policies issued; previous year:

70%).

offers of cover

Offers of cover for contracts still under nego-

tiation had a total value of 9.1 billion euros as

of 31 December 2015. This was 22% lower

than in the previous year. Experience shows

that not all of the transactions earmarked for

cover actually reach fruition as it is still un -

certain on the date on which these offers of

cover are issued whether the contracts con-

cerned will actually be awarded to the ex -

porters who have submitted the application.

German exporters executed a whole series of

large and important projects towards the end

of the year under review in particular, thus

prevailing over the international competition.

new guarantees

Number of single transaction policies

of which for private buyers

of which for public buyers/guarantors

Volume of cover in million EUR

of which single transactionpolicies volume in million EUR

of which for private buyers

of which for public buyers/guarantors

2015

618

567

51

25,832

15,988

13,586

2,402

2014

656

613

43

24,751

13,473

11,779

1,694

Sharein %

2015

100

92

8

100

85

15

Changein %

-5.8

-7.5

18.6

4.4

18.7

15.3

41.8

applications

Number of applications

of which single transaction policies

wholeturnover policies

Applications in million EUR

2015

10,832

1,261

9,571

36,156

2014

12,979

1,517

11,462

38,615

Changein %

-16.5

-16.9

-16.5

-6.4

Sharein %

2015

100

12

88

funds earmarked for export credit guarantees

Countries

Emerging economies anddeveloping countries

Industrialised countries

Total:

2014million EUR

9,839.3

1,808.1

11,647.4

2015million EUR

8,118.4

1,005.6

9,124.0

Sharein %

84.5

15.5

100.0

Sharein %

89.0

11.0

100.0


62

cover by country groups

Traditionally, a large portion of Hermes Cover

is provided for emerging economies anddeveloping countries1. In fact, these coun -

tries accounted for 75% of the cover provided.

The importance of this cover for the German

economy is particularly reflected in the share

of total exports for which guarantees are pro-

vided. 6.8% of German exports to emerging

economies and developing countries were

covered by guarantees issued by the Federal

Government in 2015 (19.3 billion euros).

Three quarters (910.4 billion euros) of Ger-

man exports went to the industrialisedcountries. Given the lower political risks

and the availability of private export credit

insurance, the proportion of government-

backed exports in total exports to industri-

alised countries is mostly relatively small. Of

these, exports valued at 6.4 billion euros

(0.7%) were covered by the Federal Govern-

ment in 2015 (previous year: 4.1 billion euros).

1 See country allocation in the annex on page 85

Emerging economies and developing countries


volume of cover by country groups in billion eur

2011 2012 2013 2014 2015

29.8 29.1 27.9

24.8 25.8

25.422.4

7.43.7

22.0

5.9

20.7

4.1

19.3

6.5

cover percentage of total export volumeby country groups in %

2015

2014

2013

America

Africa

Asia

Europe

Industrialisedcountries

9.819.5

13.5

15.07.4

9.8

3.95.4

6.5

9.06.3

7.2

0.70.50.7


63






annex

cover by horizon of risk and type of cover

As in the previous years, short-term busi-ness with credit periods of less than one year

continued to decline from a high level, thus

reflecting the ongoing normalisation of the

market after the financial crisis. The volume of

cover fell by 18.5% over the previous year,

coming to 45% of new cover (previous year:

57%).

This trend was particularly evident with

whole turnover policies (APG and APG

light), under which exporters are able to ob -

tain cover for short-term credits in transac-

tions with numerous buyers in different coun-

tries. In 2015, turnover of 9.7 billion euros

was covered (previous year: 11 billion euros).

Rough ly one quarter (26%) of the APG turn -

over re ported was accounted for by Russia,

Brazil and China.

volume of cover by country groups

Countries

Emerging economies anddeveloping countries

Latin America

Africa

Asia

Middle EastSouthern/Central Asia

East Asia

Oceania

Europe


Total:

Thereof EU-countries

2014 million

EUR

20,687.2

6,018.7

1,669.1

8,064.9

2,976.6

1,562.7

3,525.6

2.4

4,932.1

4,063.6

24,750.8

1,311.0

2015 million

EUR

19,310.6

3,266.2

3,614.4

5,862.6

1,580.6

1,057.4

3,224.6

2.6

6,564.8

6,521.6

25,832.2

2,266.4

Sharein %

83.6

24.3

6.8

32.6

12.0

6.3

14.3

0.0

19.9

16.4

100.0

5.3

Sharein %

74.8

12.6

14.0

22.7

6.1

4.1

12.5

0.0

25.4

25.2

100.0

8.8

Changein %

-6.7

-45.7

116.5

-27.3

-46.9

-32.3

-8.5

8.3

33.1

60.5

4.4

72.9

* See the country list p. 85

*

covered exports by horizon of risk in billion eur

Single transaction policies over 5 years

Single transaction policies 1 - 5 years

Single transaction policies up to 1 year

Wholeturnover andrevolving policies

2011 2012 2013 2014 2015

11.0

1.03.6

13.5

29.1

13.6

0.71.7

9.8

25.8

11.3

2.81.0

9.7

24.8

11.4

1.32.9

12.3

27.9

14.6

1.02.4

11.8

29.8


64

turnover under wholeturnover policiesin million eur

Russia R.F.

Brazil

China PR

Turkey

Saudi Arabia

1,158.3

908.4

816.9

743.5

443.4

1,094.9

745.7

668.6

641.3

417.3

2015

2014 Subtotal 2015: 3,567.8 (36.9%)

Total 2015: 9,680.2 (100%)

guarantees by horizon of risk in billion eur

Total 2015: 25.8

Wholeturnover andrevolving policies:

Single transaction policies up to 1 year:

Single transaction policies 1 - 5 years:

Single transaction policies over 5 years:

9.8

1.7

0.7

13.6 6.6%

38.1%

2.6%

52.7%

Market normalisation is also mirrored in the

continued decline in the number of whole-

turnover policies. At just under 850 in 2015,

they hovered around their multiyear average.

In addition to wholeturnover policies, which

account for a large proportion of the short-

term cover provided, the Federal Government

also offers revolving single transactionpolicies for regular business with a single

buyer and cover for individual projects with

credit periods of up to one year. Revolving

single transaction policies fell again by 39.4%,

reaching a volume of 164 million euros (pre-

vious year: 271 million euros).


65






annex

short-term single transaction policies

with a credit period of up to one year also fell

to 1.7 billion euros (previous year: 2.8 billion

euros). This includes short-term receivables

arising from the delivery of goods and ser -

vices under construction service contracts as

well as capital goods on short payment terms.

The proportion of medium and long-termcover in the total volume widened signifi-

cantly to 14.3 billion euros (previous year: 10.6

million). Among other things, this also re -

flected heightened demand for cover for

large-volume transactions with longer credit

periods. The vast majority of these transac-

tions entailed buyer credits (98% of cover).

short-term single transaction policies in million eur

Egypt

Russia R.F.

China PR

Abu Dhabi UAE

India2015

2014

2.6

316.6

339.7

0.1

260.9

339.9

246.4

80.0

74.1

649.5

Subtotal 2015: 1,389.9 (81.9%)

Total 2015: 1,696.4 (100%)

medium and long-term policies in million eur

United States

Russia R.F.

Italy

Turkey

Egypt2015

2014

1,162.5

726.3

15.3

993.8

50.9

2,164.1

1,910.5

1,464.0

1,374.7

2,638.3

Subtotal 2015: 9,551.6 (66.8%)

Total 2015: 14,291.5 (100%)


66

export credit guarantees for military goods in billion eur

Egypt

Egypt

South Africa

2015

0.001

0.585

0.001

Type of goods

Aircraft tow tractors for military use

Building, testing and delivery of two submarines

CNC portal milling machine for the production and assembly of aircraft components

Total 2015: 0.587

cover by industrial sectors

At 5.1 billion euros, cover for ship transactions

was only marginally down on the very high

level recorded in the previous year (5.2 billion

euros). This business, which traditionally en -

tails very large-scale projects, accounted for

19.7% of the total volume of Hermes Cover

(previous year: 20.9%) and 32% of the single

transaction policies.

Aircraft contracts backed by export credit

guarantees rose by one third to 2.1 billion

euros, equivalent to 8.2% of total new cover

(proportion of single transaction policies:

13%).

cover for exports of military goods

Cover worth 0.6 billion euros was provided

for military goods in 2015 (2014: 1.1 billion eu -

ros). This was equivalent to 2.3% of total new

cover (previous year: 4.5%), i.e. below the

multi-year average of 3.9% (calculated since

1997).

Ships:

Energy:

Manufacturingindustry:

Aircraft:

Oil and gasproduction:

Paper, timber, leather and textile industry:

Infrastructure:

Others:

5,085

2,401

2,363

2,101

1,847

614

612

966

share of single transaction policies byindustrial sectors in million eur

Total 2015: 15,988

13%

15%

12%

6%

4%32%

15%

4%

single transaction policies by industrial sectors in million eur

Ships

Energy

Manufacturing industry

Aircraft

Oil and gas production

Paper, timber, leather and textile industry

Infrastructure

Service industry

Agriculture and food industry

Mining

5,174

1,785

1,799

1,580

235

615

697

670

150

275

5,085

2,401

2,363

2,101

1,847

614

612

446

269

169

2015

2014 Subtotal 2015: 15,907 (99.5%)

Total 2015: 15,988 (100%)


67






annex

environmental relevance of supported projects

Audited projects

In-depth assessment category A and B

Officially supported projects Category A

Officially supported projects Category B

2014number

145

37

14

26

Volume in billon

EUR

16.1

3.7

1.1

1.0

2015number

146

56

14

23

Volume in billon

EUR

21.7

9.4

2.9

1.1

environmentally relevantaspects in cover for projects

Projects coming within the scope of the com-mon approaches must undergo environ-

mental and social due diligence. This particu-

larly includes all transactions with a credit

period of more than two years. The transac-

tions are categorised in accordance with their

possible environmental and social impact.

The category determines the scope of the

audit. In 2015, the Federal Government pro-

vided cover worth 2.9 billion euros for envi-

ronmental category A transactions (projects

which have the potential to have significant

adverse environmental and/or social impacts

which are diverse, irreversible and/or un prec -

edented or which may be located in or near

sensitive areas). In environmental category B

(projects with local or easily reversible envi-

ronmental and/or social impact), cover came

to 1.1 billion euros.

Under the Common Approaches, deliveries

for existing plants which do not result in any

material change of function or capacity do not

need to undergo any detailed environmental

audit; in this case, a risk assessment is suffi-

cient. These transactions reached a volume of

some 403 million euros in the year under

review.

officially supported, environmentally relevant projects in 2015 by categories and industrial sectors

Category APower generation

Gas processing industry

Metal processing industry

Other industries

Total Category A

Category BPower generation and distribution

of which renewables: 12 projects – 599.6 million EUR

Wood processing and paper

Infrastructure

Metal processing industry

Total Category B

Total:

Volume inmillion EUR

1,182.8

1,386.6

198.3

155.7

2,923.4

779.6

171.0

41.8

92.2

1,084.5

4,007.9

Number

4

2

4

4

14

13

5

2

3

23

37


68 claims payments in millon eur

Political risk claims

Commercial risk claims

Total:

2011

20.2

388.3

408.5

2012

40.9

241.6

282.5

2013

116.2

116.3

232.5

2014

288.4

215.5

504.0

2015

94.9

300.1

395.1

* Differences caused by rounding

*

top ten countries – claims payments under commercial risk cover in million eur

Russia R.F.

Ukraine

Ghana

Brazil

India

Netherlands

Bulgaria

United Kingdom

Kazakhstan

Abu Dhabi UAE

23.6

17.1

3.9

32.4

4.6

0.0

12.0

20.9

9.1

30.6

71.1

25.3

23.4

20.1

17.2

13.5

13.4

12.4

12.2

9.1

2015

2014 Subtotal 2015: 217.7 (72.5%)

Total 2015: 300.1 (100%)

claims, recoveries andrescheduling

claims

Outgoing payments for claims contracted by

21.6% over the previous year to 395.1 million

euros. This was primarily due to the decline

in outgoing payments for political loss for

Iran to 94.2 million euros (previous year: 287.1

million euros). The reduction in claims pay-

ments is particularly related to the fact that a

large part of the outstanding receivables had

already been indemnified.

On the other hand, claims payments for

commercial loss rose by 39.2%. The larg -

est claims payments were for Russia, Ukraine

and Ghana. In Russia’s case this was materi-

ally due to defaults on the part of individual

banks of national buyers in heavy industry as

well as individual losses in the Russian bank-

ing sector.

recoveries

Once again, relatively high recoveries of

around 285.7 million euros were received on

prior claims. Agreed restructuring plans for

large claims as well as the broad portfolio

of commercial claims under management of

over 1.9 billion euros distributed across some

1,000 foreign debtors point to continued high

recoveries in the future.


69






annex

recoveries for claims paid (excl. interest) in million eur

under political risk cover

thereof rescheduled amounts

under commercial riskcover

Total:

2011

92.3

91.1

126.7

219.0

2012

105.4

104.1

94.0

199.4

2013

101.6

99.7

142.7

244.3

2014

181.4

147.9

118.4

299.8

2015

153.3

146.3

132.5

285.7*

* Difference caused by rounding

top ten countries – recoveries under commercial claims in million eur

Kazakhstan

Indonesia

Chile

Bulgaria

Singapore

Côte d’Ivoire

Malaysia

Abu Dhabi UAE

Russia R.F.

India

17.9

13.5

6.6

6.3

48.0

4.8

3.8

3.6

3.3

5.4

Subtotal 2015: 113.2 (85.4%)

Total 2015: 132.5 (100%)

rescheduling

On the basis of the multilateral repayment

agreement entered into by the paris club,

the Federal Republic of Germany and Argen -

tina signed a bilateral agreement on 29 Jan -

uary 2015 governing the settlement of out-

standing amounts of around 2.6 billion euros.

Argentina paid the instalment of 210 million

euros due in May 2015 within the requisite

period.

In June 2015, Chad was one of the last African

countries to reach the completion point under

the HIPC (heavily indebted poor countries)

initiative, thus qualifying for full debt cancel-

lation by the creditor countries. The promised

waiver will be implemented with the sign-

ing of a bilateral agreement with the Federal

Republic of Germany.

At the end of 2015, the Paris Club was able

to reach an agreement with Cuba on the

repayment of outstanding debts. Under the

ar rangements, Cuba is to settle outstanding

amounts of around 2.6 billion US dollars over

a period of 18 years. As the Federal Republic

of Germany had already signed a reschedul-

ing agreement with Cuba in 2000, it merely

took part as an observer in the negotiations.


70 revenues in million eur

49.9%

26.3%23.6%

0.1%

Total 2015: 1,084.8 *

Amortisation and recoveries:

Premium/feesearned:

Interest received:

Other income:

285.7

541.8

256.4

0.8


highest interest paymentsin million eur

Argentina

Iraq

Pakistan

Myanmar

Serbia

47.0

15.3

15.1

11.3

129.8

Subtotal 2015: 218.5 (84.9%)

Total 2015: 257.3* (100%)

* Difference caused by rounding (interest and exchange rate gains)

results

revenues

In the year under review, total revenues for

the Federal budget from export credit guaran-

tees declined by 2.5%.

Despite the increased volume of cover, in -

come from premiums and fees fell by 9.4%

as the fees for medium and long-term cover

are frequently only payable in later periods.

recoveries under previously indemnified

claims and debt repayment under re -scheduling agreements declined by 4.7%

over the previous year. The largest recover -

ies were received from Argentina (58.9 mil-

lion euros), Kazakhstan (48.0 million euros),

Egypt (41.9 million euros), Indonesia (17.9 mil-

lion euros) and Iraq (16.8 million euros).

The interest income of 256.4 million euros

(previous year: 214.3 million euros) arose

almost solely from rescheduling agreements.

In addition, currency-translation gains of 0.8

million euros were recorded in connection

with claims.

expenses

In the year under review, expenses dropped

by 17.7% to 484.7 million euros (previous

year: 588.7 million euros). They comprise

claims payments (395.1 million euros) and

the costs for the administration of export

credit guarantees (89.6 million euros).


71






annex

financial resultin million eur

Interest received

Annual result excluding interest

'06 '07 '08 '09 '10 '11 '12 '13 '14 '15

413 519 384 581 309 344

6,592

428 454 606

110 99 115 123 111 214 256125

2,432

93

annual result and results accrued of the federal export credit guarantees 1980-2015 in million eur

Annual result (excluding interest)

Results accrued (excluding interest) - 15,000

- 10,000

- 5,000

+ 5,000

0

'80 '84 '88 '92 '96 '00 '04'82 '86 '90 '94 '98 '02 '06 '08 '10 '12 '14 '15

The interest income of 256.4 million euros

(previous year: 214.3 million euros) arising

pre dominantly from rescheduling agree-

ments was transferred to the Federal budget.

For methodical reasons, it is excluded from

the calculation of the financial result as the

funding costs incurred by the Federal Govern-

ment in respect of claims paid are likewise

not included.

annual result

With a cash surplus of 343.7 million euros,

the Federal Republic of Germany’s export

credit guarantee scheme achieved a positive

result for the Federal budget accounts for the

17th year running. Accordingly, the cumula-

tive total balance of export credit guarantees

rose to around 4.2 billion euros (not adjusted

for inflation) as of the end of 2015.


total commitments of the federal government (exposure) breakdown by country groups and statutory maximum exposure limit in billion eur

Stat. max. exp. limit

Uncategorisable*



2013 2014 2015

90.5

31.1

7.5129.1

91.1

6.2

35.4

132.8

165.0

92.9

33.7

7.5134.1

160.0145.0

* The “uncategorisable” exposure refers to allocations made for

wholeturnover policies under the statutory maximum exposure limit.

72

statutory cover limit and total commitment level

Export credit guarantees are granted on the

basis of amounts authorised by the fed-eral budget. As of the end of the year, 83%

of the statutory cover limit of 160 billion euros

had been utilised. Interest covered does not

count towards the statutory cover limit.

The Federal Government’s total commit-ment level (exposure) fell to 132.8 billion

euros (previous year: 134.1 billion euros). This

figure equals the total volume of export credit

guarantees issued (net of interest) which are

still exposed to risks. Exposure is defined as

the actual portfolio registered by the Federal

Office for Central Services and Unresolved

Property Issues (BADV). However, it does not

provide any indication of the real outstanding

risk as the export credit guarantees count

towards the statutory cover limit on the basis

of their full amount until liability has been dis-

charged regardless of their execution status.

In the year under review, there were additions

of 18.2 billion euros for new cover but dis-

charges of 19.7 billion euros.

In addition, cover for interest came to 55.4 bil-

lion euros at the end of the year (previous

year: 55.8 billion euros). The Federal Govern-

ment’s total commitment level including in -

terest thus stood at 188.2 billion euros.

the federal government's statutory cover limit

Law drafted by theFederal Government

Federal Budget Act

Statutory cover limitMaximum amount for future cover

in the light of existing and on risk cover

BADVFederal Office for CentralServices and Unresolved

Property Issues

Mandataries (Euler Hermes, PwC)

parliamentpasses

determines

report new issues and the discharge

of liability for extinguished risks

monitors

utilisa

tion

registers the maximum amountsfor which liability is accepted


total outstanding risk by industrial sectors

Sector

Ships

Energy

Aircraft

Manufacturing industry

Oil and gas production

No recording of industries

Infrastructure

Paper, timber, leatherand textile industry

Mining

Chemical industry

Agriculture andfood industry

Service industry

Environmental engineering

Total:

as at 31.12.2015billion EUR

30.0

15.0

11.5

11.1

7.4

4.8

4.2

3.2

2.1

1.5

1.1

0.5

0.0

92.4

Sharein %

32.5

16.2

12.4

12.0

8.0

5.2

4.5

3.5

2.3

1.6

1.2

0.5

0.0

100.0 **

* Wholeturnover policies, reschedulings

** Difference caused by rounding

*

top ten countries – total outstanding risk in billion eur

Turkey

United States

Russia R.F.

Bermuda

India

Switzerland

United Kingdom

Egypt

South Korea

China PR

8.9

6.7

7.3

8.0

4.0

4.0

2.1

0.9

2.7

2.4

9.3

9.2

8.4

7.8

3.8

3.7

3.7

3.0

2.6

2.4

2015

2014 Subtotal 2015: 53.9 (58.3%)

Total 2015: 92.4 (100%)

Turkey:

United States:

Russia R.F.:

Bermuda:

India:

Switzerland:

United Kingdom:

other countries:

9.3

9.2

8.4

7.8

3.8

3.7

3.7

46.5

share of total outstanding risk by countryin billion eur

Total 2015: 92.4

8.4%

9.1%

4.1%

50.3% 4.0%

10.1%

10.0%

4.0%

73






annex

outstanding risk

The federal government’s outstandingrisk is derived from the future maturities of

commitments under cover granted plus inter-

est, less the percentage to be retained by the

exporters and banks for their own account.

This amount constitutes the theoretical max -

imum outstanding risk from current Federal

Government guarantees at any given time if

the entire risk occurs in full. However, it does

not provide any indication of the real like -

lihood of the risk turning into a claim and

thus the Federal Government’s liability to

indemnify it.


74

total outstanding risk by maturities in billion eur

36.1%

37.2%

12.1% 14.6%

up to 1 year:

1 to 5 years:

more than5 years:

no fixedmaturity*:

13.5

34.4

33.4

11.1

Total 2015: 92.4

* isolated manufacturing risk cover, contract bond cover

total outstanding risk by country groups

Countries


Latin America

Africa

Asia

Europe


Total:

*

**

2014million EUR

61,317.1

13,476.5

6,602.7

22,583.2

18,654.7

27,150.0

88,467.1

2015million EUR

62,062.3

13,031.3

8,478.5

20,849.7

19,702.8

30,354.0

92,416.3

Sharein %

69.3

15.2

7.5

25.5

21.1

30.7

100.0

Sharein %

67.2

14.1

9.2

22.6

21.3

32.8

100.0

* see country classifications p. 85

** including Oceania

unrecovered amounts under claims paid

At the end of the year, unrecoveredamounts under claims paid for commercial

and political loss – including rescheduled

trade and loan receivables – stood at 4.4 bil-

lion euros and were thus unchanged over the

previous year. These unrecovered amounts

arise from claims paid for receivables trans-

ferred to the Federal Government which the

Federal Government may be able to recover

in the future.

Significant recoveries can be expected from

outstanding commercial claims totalling

around 1.9 billion euros due to restructuring

agreements already entered into in respect of

major claims.

In the case of outstanding political claims(709.7 million euros), further recoveries can

generally be expected except where future

multilateral debt relief measures take effect.


75






annex

top ten countries – debt owed to the federal government out of rescheduling agreements and political risk claims in million eur

Argentina

Iran

Iraq

Pakistan

Myanmar

Korea DPR

Serbia

Zimbabwe

Egypt

Sudan

493

210

177

146

1,006

83

72

64

47

109

Subtotal 2015: 2,407 (95.9%)

Total 2015: 2,509 (100%)

amount outstanding in billion eur

43.5%*

40.5%*

16.0%

Total 2015: 4.4

Commercial claims:

Political risk claims:

Political risk claims regulated in rescheduling agreements:

1.9

0.7

1.8


An outstanding amount of 1.8 billion euros

has been restructured in the Paris Club to

take account of the ability of the debtor

countries to pay and is governed by bilater -

al rescheduling agreements. However,

there is no certainty that the repayments thus

agreed will be actually received as existing

and future debt relief arrangements may ad -

ditionally reduce the value of the outstanding

claims.

No outstanding amounts due to the Federal

Government were cancelled under debt re -

scheduling arrangements in 2015 (previous

year: 11.4 million euros). Since the establish-

ment of export credit guarantees, the Federal

Republic of Germany has waived total debt

of just under 4.4 billion euros owed by the

poorest countries under earlier debt-resched-

uling agreements.


76

Covered Total export New percentage Cover volume guarantees of total export applications Year in billion EUR in billion EUR volume in billion EUR

Allocated amount of Total Stat. max. stat. max. outstanding exp. limit exp. limit**** risk****

* Starting 1989, values include former Eastern Germany

** Starting 1993, a new statistical method is applied in the EU to record overall export figures

*** Volume of new applications, until 2005 business volume of decisions

****The column “Allocated amount of stat. max. exp. limit” reflects the overall level of exposure under the statutory limit for the respective year. On the basis of these figures conclusions cannot, however, be drawn on the amounts actually at risk, because they also include indemnification and other payments made in respect of reschedulings for which recoveries are stillexpected.

For this reason, the Federal Government’s total outstanding risk has been recorded seperately since the end of 1997.

1950 4.3 0.2 3.6 1.0

1955 13.1 1.6 12.5 5.1

1960 24.5 2.4 9.6 8.3

1965 36.7 2.8 7.5 10.0

1970 64.1 4.9 7.7 12.0

1975 113.3 10.1 8.9 55.8

1980 179.2 14.6 8.1 64.8

1985 274.6 15.9 5.8 54.0

1990* 348.0 13.7 3.9 29.9

1995** 383.2 17.1 4.5 29.8

2000 596.9 19.5 3.3 21.0

2005 786.2 19.8 2.5 24.8

2006 893.6 20.6 2.3 33.9 ***

2007 969.1 17.0 1.8 38.1

2008 994.9 20.7 2.1 42.8

2009 808.2 22.4 2.8 48.0

2010 959.5 32.5 3.4 36.8

2011 1,060.2 29.8 2.8 37.4

2012 1,097.4 29.1 2.6 41.7

2013 1,093.9 27.9 2.6 38.7

2014 1,133.5 24.8 2.2 38.6

2015 1,195.9 25.8 2.2 36.2

0.3 0.3

3.8 2.5

6.1 5.2

8.7 8.1

13.8 12.9

30.7 25.0

76.7 59.6

99.7 80.9

81.8 68.3

99.7 91.9

112.5 106.1 56.5

117.0 104.9 56.7

117.0 98.4 58.8

117.0 96.7 58.1

117.0 101.3 62.3

117.0 107.8 66.0

120.0 107.5 76.4

135.0 116.6 82.3

135.0 124.9 85.2

145.0 129.1 87.7

165.0 134.1 88.5

160.0 132.8 92.4

new guarantees as related to totalexport volume; cover applications

utilization of the statutory maxi-mum exposure limit in billion eur


77






annex

1950-1954 27.6 16.8 25.6 5.3 13.5

1955-1959 85.6 83.2 168.0 10.8 -10.0

1960-1964 141.3 144.7 370.1 14.4 -98.5

1965-1969 247.0 381.4 587.7 22.8 18.0

1970-1974 346.1 421.9 808.1 37.9 -77.9

1975-1979 897.5 468.5 580.6 82.6 702.8

Subtotal 1,745.1 1,516.6 2,540.1 173.7 547.9 482.1

1980-1984 1,437.3 860.9 3,034.5 149.9 -886.1 238.2

1985-1989 1,343.3 1,034.6 5,512.6 183.9 -3,318.5 760.1

1990-1994 2,022.9 2,028.3 12,121.9 244.3 -8,315.0 1,725.6

1995-1999 2,727.3 2,722.2 6,614.4 270.6 -1,435.5 4,143.6

2000-2004 2,399.3 3,905.1 3,615.1 317.6 2,371.6 5,278.6

2005-2009 2,722.2 12,014.1 1,608.9 336.1 12,511.2 4,746.7

2010 776.5 187.2 282.2 75.8 605.6 92.7

2011 778.6 232.3 408.5 83.4 519.0 115.2

2012 546.7 199.4 282.5 79.8 383.8 123.6

2013 653.9 244.7 232.5 85.2 580.9 111.4

2014 598.1 299.9 504.0 84.7 309.3 214.3

2015 541.8 286.5 395.1 89.6 343.7 256.4

Total amount 18,013.0 25,531.8 37,152.2 2,174.6 4,218.0 18,288.6

Total income 43,544.8

Total expenses 39,326.8

Result accrued excluding interest 4,218.0

Debt owed to the Federal Government 4,444.5

of which regulated under reschedulings 1,799.7

* Interest received by the Federal Budget is exluded when calculating the financial result since the refinancing costs incurred

by the Federal Government in respect of claims paid are also not included.

** Recoveries for claims paid and rescheduled amounts include special revenues and exchange rate gains

Differences are due to rounding

result in million eur

Recoveries for Expenses for the Annual claims paid and Disbursements handling of the results Premiums/ rescheduled for claims and export credit excluding Year(s) fees earned amounts** reschedulings guarantees interest Interest*



raw material markets were characterised by declining prices in

2015. this led to delays in the execution of numerous natural

resources projects. projects for which an untied loan guarantee

was considered

were also affected

by this with the

result that the

federal government

issued only one

untied loan

guarantee for

96 million euros in 2015. exposure stood at 4.8 billion euros

at the end of 2015. even so, the continued intense competition

in the commodities industry spurred demand for untied loan

guarantees to cover raw material projects around the world.

against this backdrop, a transparency initiative was launched in

2015. among other things, this entailed a redesigned website and

more intense dialogue with banks, industry and associations.

untied loan guarantees (ufk) 79






annex


Raw materials

MetalsCopper

Ferroniobium

Palladium

Graphite

Bauxite

Aluminium

Iron ore

Tungsten

Nickel

Zinc/lead

Titanium

Phosphate

Potassium

Gold

Energy raw materialsNatural gas

LNG

LPG

Foundry coke

Other raw materials

Total 2015:

Number

18

4

2

1

1

1

1

1

1

1

1

1

1

1

1

5

2

1

1

1

6

29

ufk enquiries distribution among the types of raw materials in 2015

the year at a glance

In 2015, one new untied loan guarantee worth a total

of 96 million euros (including interest) was issued. This

guarantee was for an untied loan granted to finance

a silicon production plant in Iceland and ensures the

supply of raw material for three German industrial com-

panies.

Prices hit new lows in many raw material markets during

the year. However, this did not automatically lead to

any change in the tight supply situation for German

companies given the continued existence of multifac-

eted underlying raw material-sourcing risks. This was

also reflected in the heightened interest in untied loan

guarantees. Last year, two applications for raw mate-

rial projects (previous year: one application) with a

combined value of 396 million euros (plus cover for

interest) were received. The number of enquiries rose

substantially to 29 (previous year: 18). These concerned

raw material projects in 13 different countries mostly

entailing mineral resources (primarily copper). In 2015,

plans for six of these projects (three copper, two nio -

bium and one graphite project with a combined value

of around 1.6 billion euros) had already progressed far

enough for the Federal Ministry for Economic Affairs

and Energy to confirm their in principle eligibility for

cover in the light of raw materials policy considerations.

All in all, the Federal Government has confirmed the in

principle eligibility of 26 projects in 17 countries in the

light of raw materials policy considerations over the last

80


81






annex

five years. These projects entailed 14 different mineral

and energy sources, impressively testifying to the flexi-

bility of this guarantee instrument.

The Federal Government’s maximum liability (expo sure)

under the guarantees issued and still on risk – includ-

ing interest – stood at 4.8 billion euros at the end of

2015 (previous year: 4.9 billion euros). Whereas expo-

sure to development bank projects in various countries

fell from 2.5 to 2.3 billion euros, it rose from 2.4 to 2.5

billion euros in the case of raw material projects. As of

the end of the year, the portfolio comprises a total of

ten guarantees, namely five guarantees for raw material

projects and five for development bank projects.

The untied loan guarantees paid for themselves in the

year under review from premiums and fees. There were

no claims.

The 2015 Budget Act provided for a joint statutory cov-

er limit of 65 billion euros for the issue of untied loan

guarantees, investment guarantees and European

Investment Bank loans.

Countries where raw materials projects were regarded as eligible for support during the past 5 years

ufk underwriting practice – countries


82

transparency initiative

A transparency initiative was launched in 2015 after

agreement had been reached between the Federal

Government, the mandataries and industry to present

untied loan guarantees as an instrument for raw mate-

rial projects and the related processes more transpar-

ently and comprehensibly.

The core element of this initiative entailed a revised

website for the untied loan guarantees on the joint

website for the foreign trade promotion instruments,

the “AGA Portal”. The revised website was presented at

the second raw material dialogue on united loanguarantees, which was held in Berlin on 13 November

2015. Participants included representatives of banks,

raw material-processing companies and industry asso -

ciations. The new content provided on the website in -

cludes information on the UFK cover policy for raw

material projects as well as the application and deci-

sion-making processes. The section on covering prac-

tice includes an overview of the countries and com-

modities on which the Federal Government has made

positive decisions on in principle eligibility for cover in

the light of raw materials policy considerations over the

last five years. This provides interested parties with an

indication of the types of raw material projects for which

untied loan guarantees are theoretically available.

The documents required and the review and decision

pro cesses in the two-step application procedure are

described in clear terms and the expected duration of

the process is stated. The new website is being flanked

by a new leaflet summarising the main information on

untied loan guarantees for raw material projects and

outlining the benefits for the parties involved in the

project. This leaflet is available at the AGA portal.

Feedback on the new website and the leaflet has been

consistently positive. Participants in the raw material

dialogue stressed the importance of the untied loan

guarantee as it provides a reliable and significant cover

instrument for German industry independent of price

and economic cycles against the backdrop of intensi-

fied international competition for natural resources and

raw materials.

For further details, please contact:

Phone: + 49 (0) 40 / 88 34 - 90 00

[email protected]

www.agaportal.de

(from left): Sigmundur Davið Gunnlaugsson(Iceland’s Prime Minister), Kristján Pór

Magnússon (mayor of municipality ofNordurthing), Waldemar Preussner (owner and

chairman of the board of directors of PCC SE)and Ragnheiður Elín Árnadóttir (Iceland’s

Minister of Industry and Commerce) at theopening ceremony on 17 September 2015

in the north of Iceland.







annex

A highly modern plant for the production of silicon

metal has been under construction in a new industrial

trading estate in the town of Húsavík in north-eastern

Iceland since mid-2015. The main sponsor is PCC SE

from Duisburg. The ultra-pure quartzite required for

the plant is being supplied by the PCC Group’s own

mine in Poland. At least 32,000 tons of silicon metal

are to be produced annually from 2018. The project

will be creating around 120 direct jobs.

Silicon metal is used as a preliminary product in

numerous applications in the chemicals, aluminium

and electronics industry and is the main input factor

for the production of wafers, e.g. for solar modules.

In addition to the highly pure quartzite, energy is one

of the decisive input factors, accounting for around

40% of total production costs. As only around 13% of

Germany’s annual silicon requirements of around

280,000 t are covered by local production, there is a

very strong dependence on imports of this important

high-tech metal. Accordingly, reliable supplies

of silicon are indispensable for numerous final and

The PCC Bakki project – silicon production in Iceland for German industry

83interim products manufactured in Germany. The

Icelandic silicon will be sold to three renowned

German industrial companies. In view of the long-

term silicon deliveries to Germany, KfW IPEX-Bank

was able to submit an application for the issue

of an untied loan guarantee.

SMS Group GmbH, an experienced German foundry

engineering company, is responsible for the turn-key

construction of the plant as the EPC contractor.

The Federal Government has also issued an export

credit guarantee for the project in accordance with

an application submitted by KfW IPEX-Bank. The

untied loan guarantee and the export credit guarantee

were issued in May 2015.

In addition to PCC SE as the main investor, Icelandic

pension funds have also contributed equity to the

project. The debt capital of around 195 million US dol-

lars is being provided in the form of project finance

solely by KfW IPEX-Bank, which is performing all

agency functions in addition to structuring the trans -

action. The share of the finance covered by the untied

loan guarantee is valued at 70 million US dollars.

The portion for which the export credit guarantee has

been issued stands at around 94 million US dollars.

The project is furthering Iceland’s industrial develop-

ment and also creating new local employment, as

well as protecting existing jobs in Germany. In addi-

tion, it is making a significant contribution to securing

supplies of silicon metal in Germany.

KFW IPEX-BANK GMBH, Frankfurt am Main


tions of the AGA Report, the General Terms and Condi-

tions, application forms and information leaflets as well

as the Annual Reports can also be accessed via the

Internet. The “Hermes Cover Special” addresses key

aspects of export credit guarantees in detail. The arti-

cles are revised and updated to reflect any changes.

Further brochures are also available on the Internet.

2015: @Letter of undertaking – explanatory notes

2014: @Preliminary inquiry on the inclusion of

foreign content in cover

2013: @Environmental and social review of exports:

The Common Approaches

2012: @ Inclusion of foreign content in Hermes Cover

@Duties

2011: @Calculation of premiums

@Permissible payment conditions

2010: @Refinancing of officially supported export

receivables

This report on the export credit guarantees provided by

the Federal Republic of Germany is published in Ger-

man and English.

Rev.: 31. December 2015

The leadership function in the Interministerial Com -

mittee, which has the underwriting responsibility for

the Federal Export Credit Guarantees, is exercised by

the federal ministry for economic affairs andenergy:

Bundesministerium für Wirtschaft und Energie

Referat VC2

Scharnhorststraße 34-37

10115 Berlin

www.bmwi.de

The Federal Government has appointed a con sor-

tium formed by euler hermes aktiengesellschaft,

Hamburg, (Euler Hermes) as lead partner, and

pricewaterhousecoopers aktiengesellschaftwirtschafts prüfungsgesellschaft, Frankfurt am

Main, Branch Office Hamburg, (PwC), to manage the

official export credit guarantee scheme. Further details,

information, documents and advice on the opportuni-

ties offered by export credit guarantees and the appli-

cable pro cedures can be obtained by contacting the

Head Office of Euler Hermes Aktiengesellschaft or one

of its branch offices. Extensive information material on

the official export guarantee scheme, e.g. current edi-

84


85






annex

African emerging economies and developing countries:

Algeria, Angola, Benin, Botswana, BurkinaFaso, Burundi, Cameroon, Cape Verde, Cen-tral African Republic, Chad, Comoros, Con-go, Congo (Democratic Republic), Côted’Ivoire, Djibouti, Egypt, Equatorial Guinea,Eritrea, Ethiopia, Gabon, Gambia, Ghana,Guinea, Guinea-Bissau, Kenya, Lesotho, Li -beria, Lib ya, Madagascar, Malawi, Mali,Mauritania, Mauritius, Morocco, Mozam -bique, Namibia, Niger, Nigeria, Rwanda,Sâo Tomé and Principe, Senegal, Sey-chelles, Sierra Leone, Somalia, South Af ri -ca, South Sudan, St. Helena, Sudan, Swa -ziland, Tanzania, Togo, Tunisia, Uganda,Zambia, Zimba bwe.

Asian emerging economies and developing countries:

@ Middle East: Bahrain, Iran, Iraq, Jordan,Kuwait, Leb a non, Oman, Palestine (au -ton omous territories), Qatar, Saudi Ara -bia, Syria, United Arab Emirates, Yemen.

@ East Asia: Brunei Darussalam, Cam bo -dia, China (People’s Republic), HongKong, Indonesia, Korea (DemocraticPeople’s Republic), Laos, Macao, Ma -laysia, Mongolia, Philippines, Taiwan,Thailand, Timor-Leste, Vietnam.

@ South/Central Asia: Afghanistan, Arme-nia, Azerbaijan, Ban gladesh, Bhutan,Georgia, India, Ka zakh stan, Kyrgyzstan,Maldives, Myanmar, Nepal, Pakistan, SriLanka, Tajikistan, Turkmenistan, Uzbek-istan.

@ Ozeania: American Samoa, Cook Is lands,Fiji, French Polynesia, Guam, Ki ribati,Marshall Islands, Micronesia, Na uru, NewCaledonia, Niue, Northern Ma rianaIs lands, Palau, Papua New Guinea,Pitcairn Islands, Solomon Islands, Samoa(Western), Tokelau, Tonga, Tuvalu, Vanu-atu, Wallis and Futuna.

European countries (without industrialised countries):

Albania, Belarus, Bosnia and Herzegovina,Bulgaria, Croatia, Kosovo, former YugoslavRepublic of Macedonia, Republic of Moldo-va, Montenegro, Romania, Russian Federa-tion, Serbia, Turkey, Ukraine.

classification of countries

1 newly classified in the country group.

photographs by courtesy of

Cover Bilfinger

4 Bundesregierung

6, 8, 9, 49 ACENDIS Handels GmbH, Hannover

6, 22, 23, 57 NEPTUN WERFT GmbH & Co. KG,Rostock

6, 34, 35,53 SMS group GmbH, Düsseldorf

7, 10, 11, 58, 59 Brückner Maschinenbau GmbH & Co. KG, Siegsdorf

7, 78 Yolanda Van Niekerk, Dreamstime.com

13 Michael Reitz, Berlin

14, 15 MUEG Mitteldeutsche Umwelt-und Entsorgung GmbH, Braunsbedra

17 Gunter Werner, Berlin

18 Carolin Hölscher, Hamburg

19 NEXI, Tokyo

20 Gabriele Struwe, Buchholz

21 AHK Türkei, Istanbul

26 Euracom Group GmbH, Berlin

28 Dieffenbacher GmbH Maschinen-und Anlagenbau, Eppingen

30, 31 Nordex SE, Hamburg

37 Herrenknecht AG, Schwanau

39 Voith Paper GmbH & Co. KG, Heidenheim

41 Wietmarscher Ambulanz- und Sonderfahrzeug GmbH, Wietmarschen

43 Schlafhorst Zweigniederlassungder Saurer Germany GmbH & Co.KG., Übach-Palenberg

45 © 2005 – 2014 Beximco PharmaLtd. All rights reserved.

47 Siemens AG

51 KRONES AG, Neutraubling

54 Copyright Airbus

56 James Lauritz, Getty Images

78 Petr Vodnak, Dreamstime.com

79 Branex, Dreamstime.com

82, 83 PCC SE, Duisburg

Classification of countries into industri-alised countries and emerging econ o -mies and developing countries

Industrialised countries:

The group of industrialised countries com-prises all coun tries with OECD country classification 0; these include OECD high-income countries (according to the WorldBank definition: countries with a GNI percapita above 12,736 US dollars in 2015),member states of the European MonetaryUnion including their affiliated terri tories,as well as Singapore.

Andorra, Australia, Austria, Belgium, Cana-da, Czech Republic, Cyprus, Denmark, Es -tonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy,Japan, Latvia1, Liechtenstein, Lithuania,Luxembourg, Malta, Monaco, Netherlands,New Zealand, Norway, Poland, Portugal,San Marino, Singapore, Slovak Republic,Slovenia, Spain, South Korea, Sweden,Switzerland, United Kingdom, UnitedStates, Vatican City

and their dependent territories:BES Island, Ceuta and Melilla, Gibraltar,Greenland, Guadeloupe, Guiana, Marti -nique, Mayotte, Réunion, St. Pierre andMiquelon.

American emerging economies and developing countries:

American Virgin Islands, Anguilla, Antiguaand Barbuda, Argentina, Aruba, Bahamas,Barbados, Belize, Bermuda, Bolivia, Brazil,British Virgin Islands, Cayman Islands,Chile, Colombia, Costa Rica, Cuba, Curaçao,Dominica, Dominican Republic, Ecuador, El Salvador, Falkland Islands, Grenada,Guatemala, Guyana, Haiti, Honduras,Jamaica, Mexico, Montserrat, Nicaragua,Panama, Paraguay, Peru, Puerto Rico, SintMaarten, St. Kitts and Nevis, St. Lucia, St.Vincent and the Grenadines, Suriname,Trinidad and Tobago, Turks and CaicosIslands, Uruguay, Venezuela.

annex export credit guarantees


products

Buyer credit cover:Protects banks against the risk arising in connection with theamounts receivable under a credit provided to a foreign buyeror borrower.

Buyer credit cover-express:It facilitates the financing of smaller transactions having a vol-ume of up to 5 million euros with the granting of buyer creditcover within four bank working days provided that specifiedstandards are met.

Contract bond cover:Contract bond cover enables the exporter who has to put up abond in favour of his buyer in order to secure his own contrac-tual obligations (advance payment, bid, performance or main-tenance bonds) to protect himself from losses resulting fromthe bond being called unfairly or for political reasons (cf.counter-guarantee).

Constructional works cover:This type of cover protects the exporter from the typical risksinvolved in construction work carried out abroad and covers,in addition to the amounts receivable, other risks which mayarise in connection with political events during constructionabroad (e.g. the risk of confiscation or destruction of con-struction equipment).

Counter-guarantee:To complement contract bond cover taken out by an exporter,a counter-guarantee in favour of the guarantor can be as-sumed by the Federal Government. This entitles the guarantor,equivalent to a demand guarantee, to receive payment fromthe Federal Government for up to 80% of the amount of a called bond. This relieves the strain on the exporter’s creditlines up to the amount indemnified and so means considerablyimproved liquidity for him.

Export credit cover for service providers:This type of cover makes the isolated insurance of servicesrendered by professionals, such as architects, engineeringand other consultants, possible.

Framework credit cover:Framework credit cover secures a bank’s exposure from smallbuyer credits issued under a general loan agreement.

KfW refinancing programme:Under this programme long-term refinancing with congruentmaturity for export credits is made available to Germanexporters on behalf of the Federal Ministry for EconomicAffairs and Energy. The funds raised by means of selling thisexport credit to KfW are available for the financing of new,Hermes covered export transactions. More detailed informa-tion can be found on the Internet at (www.kfw.de) under theheader “Asset Securitisation – Refinancing of Export Loanscovered by Federal Guarantees”.

Leasing cover:Covers the political and commercial risks involved in leasingtransactions by German lessors (manufacturers or leasingcompanies) with lessees abroad.

Manufacturing risk cover:A manufacturing risk cover facility enables the exporter to protect his production costs incurred in the manufacture of thegoods supplied and/or the performance of the services specifiedin the export contract in the event that fulfilment of the exportcontract becomes impossible for or unacceptable to the exporter.

Revolving buyer credit cover:The revolving buyer credit guarantee is a form of bundled coverfor financing banks which secures the amounts due undershort term buyer credits with a repayment term normally notexceeding 12 months. The object of insurance is the financingof export business transacted by a German exporter with aspecific foreign buyer with whom he has a long-term businessrelationship.

Revolving supplier credit cover:It is recommended for recurring deliveries to one and thesame foreign buyer due to the simple handling in order toavoid having to submit an individual application for eachtransaction. The maximum credit period is 24 months.

Securitisation guarantee:A securitisation guarantee can be used to enhance the creditvaluation of a debt as an additional agreement to a buyer credit guarantee, thus improving the conditions of the guarantee, if the policyholder bank grants a buyer credit tothe foreign debtor and wishes to refinance the loan in turn onthe capital market.

Supplier credit cover: Supplier credit cover protects the exporter against the publicor private buyer risks arising from an individual export contract concluded with a foreign buyer.

Wholeturnover policy:The wholeturnover policy offers comprehensive cover for non-marketable risks at reasonable premiums for export contractswith a large number of foreign buyers and with payment termsof up to 12 months. The countries to be covered in this spreadpolicy with online handling can be chosen by the policyholder.The minimum insurable turnover is 500,000 euros.

Wholeturnover policy light: The wholeturnover policy light is a comprehensive coverinstrument which is inexpensive and easy to handle, es pecially well suited to the needs of small and medium-sized enterprises. It covers export business with one or moreforeign buyers on credit terms of up to four months. The policyprotects against the risk that receivables are still unpaid 6 months after due date (protracted default).

86





























New Business


of which for




Results

Revenues from

Premiums and fees

Recoveries


Other income

Expenses for

Claims paid


Management fee

Annual Result

*

**

******

2014

165,000

38,615

74.2

24,750.8

20,687.2

4,063.6

1,311.0

2.2

598.1

299.8

181.4

118.4

0.1

504.0

288.4

215.5

84.7

309.3



3,874.4

4,398.3

2015

160,000

38,156

75.4

25,832.2

19,310.6

6,521.6

2,266.4

2.2

541.8

285.7

153.3

132.5

0.8

395.1

94.9

300.1

89.6

343.7

4,218.0

4,444.5
































New Business


of which for




Results

Revenues from

Premiums and fees

Recoveries


Other income

Expenses for

Claims paid


Management fee

Annual Result

*

**

******

2014

165,000

38,615

74.2

24,750.8

20,687.2

4,063.6

1,311.0

2.2

598.1

299.8

181.4

118.4

0.1

504.0

288.4

215.5

84.7

309.3



3,874.4

4,398.3

2015

160,000

38,156

75.4

25,832.2

19,310.6

6,521.6

2,266.4

2.2

541.8

285.7

153.3

132.5

0.8

395.1

94.9

300.1

89.6

343.7

4,218.0

4,444.5





annual report 2015

ann

ual

rep

ort

exp

ort

cre

dit

gu

aran

tees

of

the

fed

eral

rep

ubl

ic o

f g

erm

any2015


Guarantees

head office


Gasstraße 27

22761 Hamburg

Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de

department berlin


Quartier 205

Friedrichstraße 69

10117 Berlin

Phone: +49 (0)30 / 20 94 - 53 10

Fax: +49 (0)30 / 20 94 - 53 20

[email protected]

branch offices

10117 Berlin

Friedrichstraße 69

60596 Frankfurt

Theodor-Stern-Kai 1

Etage 8 Bauteil A

22761 Hamburg

Gasstraße 27

50672 Köln


81373 München

Radlkoferstraße 2

70597 Stuttgart

Löffelstraße 44



Phone: +49 (0) 40/ 88 34-90 00

Fax: +49 (0) 40/ 88 34-9141

[email protected]


www.agaportal.de


Postal address


Office address

Gasstraße 27


Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de



09

23

06

05

16


annual report 2015

ann

ual

rep

ort

exp

ort

cre

dit

gu

aran

tees

of

the

fed

eral

rep

ubl

ic o

f g

erm

any2015


Guarantees

head office


Gasstraße 27

22761 Hamburg

Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de

department berlin


Quartier 205

Friedrichstraße 69

10117 Berlin

Phone: +49 (0)30 / 20 94 - 53 10

Fax: +49 (0)30 / 20 94 - 53 20

[email protected]

branch offices

10117 Berlin

Friedrichstraße 69

60596 Frankfurt

Theodor-Stern-Kai 1

Etage 8 Bauteil A

22761 Hamburg

Gasstraße 27

50672 Köln


81373 München

Radlkoferstraße 2

70597 Stuttgart

Löffelstraße 44



Phone: +49 (0) 40/ 88 34-90 00

Fax: +49 (0) 40/ 88 34-9141

[email protected]


www.agaportal.de


Postal address


Office address

Gasstraße 27


Phone: +49 (0)40/88 34-90 00

Fax: +49 (0)40/88 34-91 75

[email protected]

www.agaportal.de



09

23

06

05

16


Date post:	07-Aug-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

Annual Report 2015, Export Credit Guarantees of the ... · Annual Report 2015, Export Credit...

Documents