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Australian CleanTech Financing export and investment opportunities

July 2012

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The Australian government’s export credit agency

Wholly owned and guaranteed by the government

Self-funding statutory corporation – “AAA” rated

Mission: to support growth of Australian business internationally

Provides financial solutions for Australian exporters and offshore investors

Over 50 years’ of export finance & industry experience

Who is EFIC?

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Role complementary to commercial lenders

Fills ‘market gap’ when commercial finance unavailable/insufficient

Operate on a commercial basis

Eligibility criteria apply for solutions

Support Australian involvement in:

export of goods or services

domestic export-related transactions and projects

overseas investment

Customers range from SMEs to large listed companies

EFIC’s role

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Role complementary to commercial lenders

Fills ‘market gap’ when commercial finance unavailable/insufficient

Market gap

riskier countries

smaller, riskier companies

EFIC extends market capacity

commercial markets stop

here (frontier

fluctuates)

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Australian based companies and their export customers

Successful track record

Financially stable

Experiencing financial challenges in growing their business

Sizeable export related contract/s requiring support

Bank unable to assist further without EFIC support

Client profile

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How does EFIC assist?

Finance to overseas buyers: Direct Lending Export Finance Guarantees Project Finance

Pre-shipment finance: Contract specific via Export Working Capital Guarantee

Bonding: Advance Payment Bonds Performance & Warranty Bonds

Post-shipment finance: Financing of overseas receivables Documentary Credit Guarantees

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An on-demand guarantee from EFIC to the exporter’s bank

Secures funding for specific export contract/s

Where working capital / pre-shipment finance need is >$0.5m

The funding requirement is determined from the contract cash flow

EFIC undertakes detailed risk assessment contract, technical, financial and payment risks

Export working capital guarantee

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Post-Shipment Pre-Shipment

Product Lifeline

$2mil Contract 30% Margin ($600k)

Payment Terms 10% Deposit 30% On Shipment 50% On Commissioning 10% After Warranty

$200k $200k

$400k

$600k

-$400k

-$600k

Contract Awarded 10% Deposit

Shipment 30% Progress

Commissioning 50% Progress

End Warranty 10% Progress

+ve

-ve

Cumulative Cash Flow

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Customer Melbourne-based urban cycling accessories company which exports to over 40 countries through a network of distributors

Need There was a delay between when Knog had to pay its suppliers and when the company received payment from distributors. The company needed additional cash flow to fulfil its distributors’ orders

Solution A US$600,000 export working capital guarantee from EFIC to Westpac

Case study – Knog

Result Knog had additional

cash flow to fill its growing export orders

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Customer TTG is an Australian train technology development company that provides products and consulting services to the rail industry.

Need After winning a tender for train optimisation in the UK against other global suppliers, NSW based TTG, needed capital to satisfy their contract requirements.

Solution EFIC supported their business by providing a working capital guarantee to TTG’s bank, which helped TTG to meet the costs associated with the delivery on their contract. .

Case study – TTG Transportation Technology Pty Ltd (TTG)

Result TTG’s capital is freed up

to meet its contract obligations

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Customer One of Australia’s leading combustion and process engineering companies

Need The company won a US$6.5m contract to supply and install two fired heaters for the 240 km Taweelah-Fujairah gas pipeline in the UAE. Gasco could not finance the performance bond the buyer required

Solution EFIC provided a guarantee to Gasco’s bank, ANZ, which in turn provided a performance bond to the buyer

Case study – Gasco Pty Ltd

Result Gasco boosted its

exports to the Middle East

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Customer Melbourne-based company specialising in weather tracking and monitoring equipment

Need Contract with Polar Institute of China to design and install satellite tracking ground stations at two research stations in Antarctica. ES&S could not finance the substantial contract bonds required

Solution Advance payment and performance bonds from EFIC for almost 50% of the contract value

Case study – Environmental Systems and Services

Result ES&S received an

advance payment to finance work on the

contract

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Customer International development management company which specialises in managing aid projects in developing countries

Need GRM is often required to provide substantial bonds to support its international contracts, but lacks the working capital to finance the bonds

Solution One-year revolving $10 million bonding facility from EFIC. GRM can request advance payment or performance bonds for its group companies

Case study – GRM International

Result GRM’s working capital is freed up to pursue its

international growth

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Customer Brisbane-based specialist in pump station technology for water and wastewater utilities

Need Contract with US government customer required a substantial surety bond, which would tie up MultiTrode’s working capital

Solution US issuer Liberty Mutual issued the bond to the buyer, underwritten by EFIC

Case study – MultiTrode

Result MultiTrode could enter the US market and the

company’s working capital was freed up

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Customer Perth-based company which creates innovative geographic information system applications and software.

Need NGIS needed working capital to develop a three-dimensional environmental impact assessment website for the Hong Kong Planning Department.

Solution EFIC provided a guarantee to NGIS Australia’s bank, ANZ, to help the company fulfil its Hong Kong contract.

Case study – NGIS Australia

Result NGIS could expand its

presence in the Hong Kong market

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Customer A family-owned company that is a world-leading maker of architecturally designed lighting fixtures and glassware

Need Three contracts to supply feature lighting fixtures to the Dubai Metro project. Planet Lighting could not finance the advance payment bonds required

Solution EFIC issued three advance payment bonds to the buyer in the UAE

Case study – Plant Lighting

Result Advance payments

meant Planet Lighting could start work

immediately

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Benefits of working with EFIC

We help overcome financial barriers to exporting EFIC support enables companies to seize

opportunities they would otherwise have to pass up We add value by coming in where bank support falls

away

We are motivated by increasing exports We are not profit driven – though deals must be on a

commercially sustainable basis

Summary

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Jonathan Reso Natalie Reid-Frost Director, SME & Mid Market, NSW Director, SME & Mid Market, NSW Phone: +61 2 8273 5267 Phone: +61 2 8273 5203 Email: jreso@efic.gov.au Email: nreidfrost@efic.gov.au

Contacts

Robert Dravers Geoff Toone Director, SME & Mid Market Director, SME & Mid Market, VIC Phone: +61 2 8273 5268 Phone +61 3 8060 4640 Email: rdravers@efic.gov.au Email: gtoone@efic.gov.au

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This material (Information) has been prepared by EFIC for information purposes only. It is in summary form and is therefore not necessarily complete.

It is not an offer by EFIC to make available to any party any of the financial products referred to in the Information (Products) and the Information must not, in any way, be construed as specific or general advice in respect of any Products. A person or entity should seek their own advice as to the suitability of any Products for their own financial or tax circumstances. Whilst reasonable care has been taken to ensure that the Information is not untrue or misleading, no representation is made as to its accuracy or completeness and no liability is accepted for any loss arising from reliance upon the Information.

In accordance with applicable exemptions, EFIC is not required to hold an Australian financial services licence nor is it regulated by the Australian Prudential Regulation Authority in connection with any of the Products.

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