However, due to the limited provision of domestic raw materials, Germany is dependent on the supply of raw materials from abroad. Thereby, the issue of a sufficient raw material supply lies first and foremost with the companies themselves. Due to supply constraints, distortions in trade, drastic price increases as well as political influences, however, the supply situation and the access to certain raw materials for German companies is impeded.
At this stage the Untied Loan Guarantees of the Federal Republic of Germany come into play, which since facilitate the access to raw materials abroad. They provide lenders to raw material projects abroad cover against commercial and political credit default risks. In principle, the financed project needs to be eligible for cover pursuant to political aspects and has to lie in the national and macroeconomic interest of Germany. In addition, Untied Loan Guarantees are also issued within the scope of development bank projects to support the promotion and development of market-economy structures abroad.
An Untied Loan Guarantee covers the corresponding credit repayment risks. Hence, Untied Loan Guarantees often facilitate the financing of a project in the first place. German raw material offtaker free online chatting in tamilnadu The prospect of including an Untied Loan Guarantee in the financing of a raw material project often enables German raw material offtakers to conclude long-term offtake contracts.
On this basis the offtaker obtains access to a reliable source of the needed raw material for many years. Sponsor of a raw material project best online dating for serious relationships Including an Untied Loan Guarantee in the financing of a raw material project provides lenders with cover against credit default risks and can improve financing conditions.
The necessary conclusion of a long-term offtake contract for delivery of raw materials with a German offtaker furthermore has a financial benefit on the project due to continuous revenues.
In contrast to the further foreign trade and investment promotion instruments of the Federal Republic of Germany, the Untied Loan Guarantees are not tied to the export of German goods and services and therefore do not qualify as export financing.
The loan may be denominated in either Euro or a foreign currency. Any interest rates agreed on in the loan agreement are covered by the Untied Loan Guarantee insofar as they accrue up to the agreed maturities of the respective loan instalments. The guarantees can only be granted on application, by German banks or branches of foreign banks established in Germany as well as, under certain conditions, foreign banks. In a raw material project an Untied Loan Guarantee may be included by means of a project, structured or corporate financing.
In theory the credit term is not limited, in practice, however, it is oriented at the raw material offtake Agreement. Eligibility for cover in principle Projects are considered to be eligible for cover if they increase the supply security of raw materials to the Federal Republic of Germany.
The prerequisite is that German offtakers receive raw materials on the basis of a long-term offtake agreement and that the provision of these raw materials is of a macroeconomic interest. Justifiability of the risk The grant of an Untied Loan Guarantee is premised on an assessment as to a justifiable risk against the Federal Government, e. There should be a reasonably justifiable prospect of a loss-free loan repayment.
Project structure The commercial and technical feasibility of the raw material project to be financed as well as the total financing of the project must be ensured. In addition, the compliance to internationally accepted environmental and social standards of the project needs to be guaranteed.
Lastly, the financing must not serve to discharge existing obligations in respect of national or foreign supply and service transactions no debt refinancing.