Principles of Project Finance

§11.3.5 B

ENEFIT OF

ECA S

UPPORT

With the need to keep within the structure of the OECD Consensus rules, the

complexity always caused by having another party to the financing, and the rela-

tively high initial premiums charged by ECAs (in lieu of a loan margin), it gener-

ally only becomes attractive to use ECA support if commercial lenders are not

willing to provide finance to the country or project concerned without it.

Another key point is that ECAs primarily support exports of equipment, not the

whole of the amount payable under an EPC Contract: power or infrastructure proj-

ects incur substantial costs under their EPC Contracts for civil engineering work

(normally carried out by local subcontractors, with no export element involved),

which ECAs can ...