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BUYING NORWEGIAN GOODS AND SERVICES? WHAT GIEK OFFERS GIEK Jan Inge Roald, Senior Vice President Singapore, March 20 2014

What is GIEK? ✓Guarantee Institute for Export Credits

(GIEK). An export credit agency (ECA).

✓GIEK offers financial guarantees in order to promote Norwegian exports.

✓GIEK does NOT offer loans

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✓Owned by and guarantees in the name of the Kingdom of Norway

✓Politically independent Board of Directors

✓GIEK is located in Oslo, approx. 80 employees

✓GIEKs most important product is guarantees for long term loans

✓Main overall guarantee line of NOK 145 billion

What is GIEK (cont.)?

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GIEK’s main goals ✓Promote Norwegian exports

✓Guarantee premiums are to cover losses and administrative costs

2006-2012: Strong growth in guarantees

• 7X growth in guarantee liabilities • From political risk to commercial risk • From a wide range of different ships and ferries to offshore vessels and drilling rigs.

0

10

20

30

40

50

60

70

80

90

2006 2007 2008 2009 2010 2011 2012 2013

Guaranteed amounts, NOK bn N/A

Other

Banking and FinancialServicesShipping

Fishing

Water and Sanitation

Power Generation andDistributionOil and gas

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Total guarantees: NOK bn 81,7

Guarantees as of 31.12.2013 Oil/gas and maritime industry makes up for 90 % of the guaranteed amounts

85 %

5 %

Oil and gasShipping

Drillships and semis; 40%

Construction vessels; 12%

AHTS; 11%

PSV; 11%

Seismic; 6%

FPSO etc; 3%

Other offshore;

12%

Shipping; 5%

Oil and gas and shipping 2013: NOK bn 73,5

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What does GIEK guarantee for? ✓Guarantees for borrowers’ long-term

debt

✓Borrower can be either the buyer or

end user of Norwegian exports

✓Vessels and plants built abroad with

Norwegian equipment

✓Other export guarantees (owners’

advances, performance guarantees,

etc.)

24/03/2014 GIEK OSV

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Financing an OSV ✓Price MNOK 333

✓Yard: Norwegian

✓Shipowner: Foreign or Norwegian

✓Loan from Eksportkreditt to Shipowner of MNOK 200.

✓GIEK guarantees for MNOK 140 (70%), Commercial Banks MNOK 60 (30%)

✓Pari passu participation with banks (security, pricing and other terms)

✓Secured by 1st priority mortgage in vessel and earnings

✓Market based p.a. premium plus commitment fee, arrangement fee etc.

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Example: OSV Ltd. ✓70 % GIEK-covered ✓12 years repayment, however no longer

than commercial banks ✓One loan agreement for the facility

133 MNOK Equity

200 MNOK Loan

Tranche B: 30%

Direct risk and funding by commercial bank

Tranche A: 70%

Guaranteed 100% by GIEK Funded by Eksportkreditt

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Financing a subsea vessel ✓Price MNOK 700

✓Yard: Foreign

✓Shipowner: Foreign or Norwegian

✓GIEK guarantees for MNOK 200 (80% of Norwegian content of MNOK 250)

✓Loan from Commercial Banks and Eksportkreditt to Shipowner of MNOK 490.

✓GIEK guarantees for MNOK 200 (41%) ii) Commercial Banks MNOK 290

(59%)

✓Pari passu participation with banks (security, pricing and other terms)

✓Secured by 1st priority mortgage in vessel and earnings

✓Market based p.a. premium plus commitment fee, arrangement fee etc.

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How we finance ✓ Resembles a bank credit process

✓ Pari passu participation with banks (security, pricing and other terms)

✓ Secured by 1st priority mortgage

✓ Per annum premium plus commitment fee plus possibly other fees

✓ May be stricter than banks relating to environment issues and CSR

✓ GIEK works with the banks, do not compete with them

✓ Guaranteed amount not to exceed Norwegian content (or 80/85 % of this)

✓ Norwegian deliveries normally to contain 30 % Norwegian content in order to be Norwegian

✓ GIEK normally not involved in the loan documentation process, but changes are taking place

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How we finance-Buyer credit- Maximum rules

• Guarantee for loan from a bank

• OECD rule: Minimum 15 % of contract value as cash payment

(or 20 % in case of vessels), the rest as loan

• GIEK may underwrite up to 90 % of a loan (commercial risk)

• 12 years for ships

GIEK’s ”normal” practical requirements (for long-term financings):

✓GIEK’s formal application form filled in, exporter, prospective borrower or bank can apply

✓Bank assessment of the project

✓Bank term sheet

✓Reasonable risk

✓Much of the same requirements as commercial banks

✓Due diligence, also due diligence of environmental risk and CSR

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What we finance – characteristics

✓ Historically GIEK has done project finance

✓ Since the finance crisis in 2008 guarantees

related to a number of medium sized and

larger corporates

✓ Many offshore vessels and drilling vessels

✓ Many “Norwegian” Owners

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What we finance – types of vessels Offshore vessels: ✓ Drilling Vessels

✓ Anchor Handling Tug Supply (AHTS)

✓ Platform Supply Vessels (PSV)

✓ Construction Vessels

✓ Well Intervention Vessels

✓ Diving Vessel

✓ Subsea Vessels

✓ Jack-ups

✓ FPSOs

Other vessels: ✓ Ferries

✓ Offshore Wind Support Vessels

✓ Chemical Parcel Tankers

✓ Tugs

GIEK is open to all industries. Examples:

Case I: Hydro-electric power station in Indonesia Norwegian Tinfos AS owns 95 % of the stocks in the project company Sulawesi Mini Hydro Power, and will deliver goods and services. Buyer credit guarantee: ✓ Norwegian goods and services represent 50 % of total project

deliveries ✓ GIEK has issued a buyer credit guarantee measuring up to the

amount of the Norwegian deliveries Investment guarantee – political risk: ✓ GIEK has issued an investment guarantee of MUSD 4,7 ✓ GIEK covers Tinfos’ risk for lost equity as a consequence of

political measures/occurences of 80 %

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Case II: Offshore Wind Farm outside Belgium

✓Northwind is a 216 MW offshore wind farm with 72

windturbines ✓GIEK was involved at an early stage, crucial for attracting

interest from other commercial financial institutions in this EUR 914 million project.

✓Norwegian delivery: ✓ Cables from Nexans and Parker Scanrope worth about NOK

500 million. ✓Project financing: Cooperation between Export Credit

Agencies, commercial banks and the European Investment Bank

✓GIEK participate with a buyer credit guarantee, thereby

providing for part of Northwinds long term loans.

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Images: Belwind wind farm, Zeebrugge, Belgia

Case III: Solarpower plant in South Africa Norwegian Scatec Solar AS: ✓ co-owner ✓ major supplier 75 MW solar power plant «Kalkbult» in South Africa

3 different bond guarantees from GIEK ✓ The South African buyer company receives:

✓Advance payment guarantee securing 15 % of the deliveries

✓ Completion guarantee securing 10 % of the contract The loan-providing South African bank receives:

✓ Guarantee to secure Scatec Solar’s share of equity in the buyer company

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Case IV: The SMB contracts Norwegian AquaFence ✓ certified, portable flood protection system that can be assembled quickly and

easily. ✓Backed with a guarantee from GIEK, the export contract was secured for AquaFence.

The guarantee is issued towards the lender Export Credit Norway and amounts to NOK 7,3 million. (buyer credit guarantee)

✓AquaFence saw its beginning in 1999, after two years developing the flood protection system in co-operation with SINTEF, Innovasjon Norge, etc.

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Thank you

www.giek.no/en