Commission Delegated Regulation (EU) 2023/262 of 7 September 2022 amending Annex II to Regulation (EU) No 1233/2011 of the European Parliament and of the Council on the application of certain guidelines in the field of officially supported export credits

1.4.To your knowledge, are there any other matters that may impact whether courts and administrative bodies should be expected to act in a manner consistent with the Convention and QDs? If so, please specify.

Appendix III

Minimum interest rates

The provision of official financing support shall not offset or compensate, in part or in full, for the appropriate premium rate to be charged for the risk of non-repayment pursuant to the provisions of Appendix II.

1) When the repayment of principal and the payment of interest are combined in equal instalments, the relevant floating benchmark rate effective two business days prior to the loan drawdown date, according to the relevant currency and payment frequency shall be used to calculate the entire payment schedule, as if it were a fixed rate. The principal payment schedule shall then be fixed as well as the first interest payment. The second interest payment, and so on, shall be calculated based on the relevant floating benchmark rate effective two business days before the prior payment date over the outstanding principal balance initially established. 2) When the repayment of principal is made in equal instalments, the relevant floating benchmark rate, according to the relevant currency and payment frequency, effective two business days before the loan drawdown date and prior to each payment date shall be used to calculate the following interest payment over the outstanding principal balance.

c) Where official financing support is provided for floating rate loans, buyers/borrowers may have the option to switch from a floating rate to a fixed rate provided that the following conditions are fulfilled:

1) The option is restricted to switching to the swap rate only; 2) The option to switch shall only be exercised upon request, only once, and shall be reported accordingly with a reference to the reporting form initially sent to the Secretariat pursuant to Article 24 of this Understanding.

The minimum fixed interest rate shall be either:

OR

to which, in both cases, the margin benchmark, calculated in accordance with Article 8 f) of this Appendix, shall be added.

1) Five-year government bond yields for a repayment term up to and including nine years, 2) Seven-year government bond yields for over nine and up to and including 12 years, or 3) Nine-year government bond yields for over 12 and up to and including 15 years.

c) A Participant or a non-Participant may request that a CIRR be established for the currency of a non-Participant. In consultation with the non-Participant, a Participant or the Secretariat on behalf of that non-Participant may make a proposal for the construction of the CIRR in that currency using the Common Line procedures set out in Articles 28 to 33 of this Sector Understanding.

b) After the credit agreement date, the CIRR shall be applied for drawing periods that do not exceed six months. After the first six-month drawing period, the CIRR is reset for the next six months; the new CIRR shall be the one prevailing at the first day of the new six-month period and cannot be lower than the CIRR originally selected (procedure to be replicated for each subsequent six-month period of drawings).

Within the provisions of the credit agreement the borrower shall not be allowed an option to switch from an officially supported floating rate financing to a pre-selected CIRR financing, nor be allowed to switch between a pre-selected CIRR and the short term market rate quoted on any interest payment date throughout the life of the loan.

In the event of a voluntary, early repayment of a fixed interest rate loan as determined in Article 2 of this Appendix, or any portion thereof or when the CIRR applied under the credit agreement is modified into a floating or a swap rate, the borrower shall compensate the institution providing official financing support for all costs and losses incurred as a result of such actions, including the cost to the government institution of replacing the part of the fixed rate cash inflow interrupted by the early repayment.

When market developments require the notification of an amendment to a CIRR during the course of a month, the amended rate shall be implemented ten working days after notification of this amendment has been received by the Secretariat.

1) 100 % unconditional guarantee transactions denominated in US dollars; and 2) Official support provided in respect of aircraft valued at or above USD 35 million (or its equivalent in any other eligible currency).

g) The Participants shall monitor the margin benchmark and shall review the margin benchmark mechanism upon the request of any Participant.

Appendix IV

Reporting form

1.Notifying country

2.Notification date

3.Name of notifying authority/agency

4.Identification number

5.Name and country of buyer

6.Name and country of borrower

7.Name and country of guarantor

8.Status of buyer/borrower/guarantor, e.g. sovereign, private bank, other private

9.Risk classification of buyer/borrower/guarantor

10.In what form is official support provided, e.g. pure cover, official financing support

11.If official financing support is provided, is it a direct credit/refinancing/interest rate support

12.Description of the transaction supported, including the manufacturer, aircraft model and number of aircraft.

13.Final commitment date

14.Currency of credit

15.Credit amount, according to the following scale in USD millions:

Category	Credit Amount
I	0–200
II	200–400
III	400–600
IV	600–900
V	900–1 200
VI	1 200 –1 500
VII	1 500 –2 000  (*1)
(*1) Indicate the number of USD 300 million multiples in excess of USD 2 000  million.

16.Percentage of official support

17.Repayment term

18.Repayment profile and frequency – including, where appropriate, weighted average life

19.Length of time between the starting point of credit and the first repayment of principal

20.Interest rates:

— Minimum interest rate applied

— Margin benchmark applied

21.Total premium charged by way of:

— Up-front fees (in percentage of the credit amount) or

— Spreads (basis points per annum above the applied interest rate)

— As appropriate, please indicate separately the 15 % surcharge applied in accordance with Appendix II Article 20 b).

22.In the case of direct credit/financing, fees charged by way of:

— Arrangement/Structuring fee

— Commitment/Premium holding fee

— Administration fee

23.Premium holding period

24.In the case of pure cover, premium holding fees

25.Transaction structuring terms: risk mitigants/premium surcharge applied

26.As appropriate, an indication of the impact of the Cape Town Convention on the premium rate applied

Appendix V

List of definitions

ANNEX IV

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR RENEWABLE ENERGY, CLIMATE CHANGE MITIGATION AND ADAPTATION, AND WATER PROJECTS

The purpose of this Sector Understanding is to provide adequate financial terms and conditions to projects in selected sectors identified including under international initiatives as significantly contributing to climate change mitigation, including renewable energy, greenhouse gas (GHG) emissions’ reduction and high energy efficiency projects, climate change adaptation, as well as water projects. The Participants to this Sector Understanding agree that the financial terms and conditions of the Sector Understanding, which complements the Arrangement, shall be implemented in a way that is consistent with the Purpose of the Arrangement.

CHAPTER I

Scope of the sector understanding

1) The export of complete renewable energies plants or parts thereof, comprising all components, equipment, materials and services (including the training of personnel) directly required for the construction and commissioning of such plants. 2) The modernisation of existing renewable energies plants in cases where the economic life of the plant is likely to be extended by at least the repayment period to be awarded. If this criterion is not met, the terms of the Arrangement apply.

1) In cases where the buyer of the switchyard is the same as the buyer of the power plant and the contract is concluded in relation to the original switchyard for that power plant, the terms and conditions for the original switchyard shall not exceed those for the renewable energies power plant; and 2) The terms and conditions for sub-stations, transformers and transmission lines with a minimum voltage threshold of 60 kV located outside the renewable energies power plant site boundary shall not be more generous than those for the renewable energies power plant.

1) The project should result in low to zero carbon emissions, or CO2 equivalent, and/or in high energy efficiency; 2) The project should be designed to meet, as a minimum, the performance standards as set out in Appendix II; and 3) The terms and conditions provided shall be extended only to address specific financial disadvantages encountered by a project, and shall be based on the individual financial needs and specific market conditions of each project.

1) The conditions set out in Appendix III are met; 2) The terms and conditions provided shall be extended only to address specific financial disadvantages encountered by a project, and shall be based on the individual financial needs and specific market conditions of each project.

This Sector Understanding sets out the financial terms and conditions that apply to officially supported export credits relating to contracts for the export of complete projects or parts thereof related to the supply of water for human use and wastewater treatment facilities:

c) The modernisation of such facilities in cases where the economic life of the plant is likely to be extended by at least the repayment period to be awarded. If this criterion is not met, the provisions of the Arrangement apply.

CHAPTER II

Provisions for export credits

1) For contracts in Project Class A: 18 years. 2) For contracts in Project Class B and Project Class C: 15 years.

1) For Category I countries as defined in Article 11 of the Arrangement, the maximum repayment term is five years, with the possibility of agreeing up to eight-and-a-half years when the procedures for prior notification set out in Article 7 of this Sector Understanding are followed. 2) For Category II countries, the maximum repayment term is 10 years. 3) Notwithstanding subparagraphs 1) and 2) above, for non-nuclear power plants as defined in Article 14 of the Arrangement, the maximum repayment term is 12 years.

1) Repayment of principal shall be made in equal instalments. 2) Repayment of principal and payment of interest combined shall be made in equal instalments.

1) No single repayment of principal or series of principal payments within a six-month period shall exceed 25 % of the principal sum of the credit. 2) Principal shall be repaid no less frequently than every 12 months. The first repayment of principal shall be made no later than 18 months after the starting point of credit and no less than 2 % of the principal sum of the credit shall have been repaid 18 months after the starting point of credit. 3) Interest shall be paid no less frequently than every 12 months and the first interest payment shall be made no later than six months after the starting point of credit. 4) The maximum weighted average life of the repayment period shall not exceed 60 % of the maximum available tenor.

d) Interest due after the starting point of credit shall not be capitalised.

CHAPTER III

Procedures

1) Article 46 of the Arrangement if the support is extended pursuant to Article 1, 2 or 4 of this Sector Understanding; 2) Article 45 of the Arrangement if the support is extended pursuant to Article 3 of this Sector Understanding.

1) An enhanced description of the project in order to demonstrate how the project complies with the criteria for support, as set out in Article 3 b) of this Sector Understanding, and 2) Access to the outcome of the independent third-party review required in Appendix III.

e) A Participant shall inform all other Participants of its final decision following a discussion, to facilitate the review of the body of experience.

CHAPTER IV

Monitoring and review

The Participants agree to examine the following issues:

e) After 31 December 2027, the terms and conditions related to Appendix III shall be discontinued unless the Participants agree otherwise.

Appendix I

Renewable energies sectors

The following renewable energies sectors shall be eligible for the financial terms and conditions set out in this Sector Understanding provided that their impacts are addressed in accordance with the 2012 Recommendation of the Council on Common Approaches on Officially Supported Export Credits and Environmental and Social Due Diligence (³³) (as subsequently amended by Members of the OECD Working Group on Export Credits and Credit Guarantee (ECG) and adopted by the OECD Council):

k) Energy efficiency in Renewable Energies projects.

Appendix II

Climate change mitigation sectors

PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED	REPAYMENT TERMS
Project Class A: Carbon Capture Utilisation and Storage
TYPE 1: Fossil Fuel Power Plants with Operational Carbon Capture Utilisation and Storage (CCUS)	A process consisting of the separation of CO2 stream from the emissions produced by fossil fuel generation sources, transport to a storage site, for the purposes of environmentally safe and permanent geological storage of CO2 or use as an input or feedstock to create products or services.	To achieve low carbon emission levels for fossil fuel power sources.	Carbon intensity shall achieve a level equal to or less than 350 metric ton CO2 per GWh vented to atmosphere (1); Or In the case of all projects, a capture and storage rate that would reduce the plant’s carbon emissions by 65 % or greater; Or The capture rate has to be at least 85 % of CO2 emitted by the equipment included in the application for officially supported export credits. The 85 % is to apply at normal operating conditions.	18 years
Project Class A: Carbon Capture Utilisation and Storage
TYPE 2: CCUS Projects as such	A process consisting of the separation of CO2 from industrial or energy generation sources, transport to a storage site, for the purposes of environmentally safe and permanent geological storage of CO2 or use as an input or feedstock to create products or services.	To significantly reduce carbon emissions from existing sources.	In the case of all projects, a capture and storage rate that would reduce the industrial or energy generation carbon emissions by 65 % or greater; Or The capture rate has to be at least 85 % of CO2 emitted by the equipment included in the application for officially supported export credits. The 85 % is to apply at normal operating conditions.	18 years
(1) In the case of a plant fuelled by natural gas, significantly lower carbon intensity is expected to be achieved.
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED	REPAYMENT TERMS
---	---	---	---	---
Project Class B: Fossil Fuel Substitution
TYPE 1: Waste to Energy	Unit dedicated to generating energy by thermal treatment (including gasification) of mixed stream solid waste.	To offset GHG emissions from the use of conventional power and by reducing future GHG such as methane that would normally emanate from the waste.	In the case of a steam cycle, a boiler (or steam generator) energy conversion efficiency of at least 75 % based on low heating value (LHV) (1). In the case of gasification, a gasifier efficiency of at least 65 % LHV (2).	15 years
Project Class B: Fossil Fuel Substitution
TYPE 2: Hybrid Power Plants	A power plant that generates electric power from both a renewable energy source and a fossil fuel source.	To meet the requirement of plant availability, a fossil fuel generating source is required for those periods when power from the renewable energy source is not available or sufficient. The fossil fuel source enables the usage of renewable energy in the hybrid plant, thereby achieving a significant carbon reduction compared with standard fossil fuel plant.	Model 1: Two separate generation sources: one Renewable Energy and one fossil fuel. Project shall be designed such that at least 50 % of its projected total annual energy output originates from the plant’s renewable energy source. Model 2: Single generation source using the combination of renewable and fossil fuel. The project shall be designed such that at least 75 % of the useful energy produced is derived from the renewable source.	15 years
(1) Boiler (or steam generator) energy conversion efficiency = (Net heat exported by the steam/heat or calorific value [LHV] provided by the fuel) (× 100 %). (2) Gasifier efficiency = (Calorific value of gas per kg of fuel used/average net calorific value (LHV) of 1 kg of fuel) (× 100 %).
PROJECT CLASS	DEFINITION	RATIONALE	STANDARDS USED	REPAYMENT TERMS
---	---	---	---	---
Project Class C: Energy Efficiency
TYPE 1: Combined Heat & Power projects	Simultaneous generation of multiple forms of energy (electrical, mechanical and thermal) in a single integrated system. Output of the CHP plant shall include electric or mechanical energy and heat for commercial industrial and/or residential use.	Up to two thirds of the primary energy used to generate electricity in conventional thermal power plants is lost in the form of heat. Combined heat and power (CHP) generation can therefore be an effective GHG mitigation option. CHP is possible with all heat machines and fuels (including biomass and solar thermal) from a few kW-rated to 1 000  MW steam-condensing power plants (1).	Overall efficiency of at least 75 % based on low heating value (LHV) (2).	15 years
Project Class C: Energy Efficiency
TYPE 2: District heating and/or cooling	Network which carries/distributes thermal energy from energy producing unit to end use.	To improve the efficiency of heating of districts by building piping networks for steam and/or hot water with substantial thermal efficiency, both by minimising losses of piping and converters, and by increasing the amount of utilisation of waste heat. District cooling is an integrative technology that can make significant contributions to reducing emissions of carbon dioxide and air pollution and to increasing energy security e.g. via substitution of individual air-conditioners.	The district piping thermal conductivity shall be less than 80 % of the relevant thermal conductivity required by the European standard EN253:2009 (to be reviewed when this standard is updated).	15 years
(1) IPCC Fourth Assessment Report: Climate Change 2007, http://www.ipcc.ch/publications_and_data/ar4/wg3/en/ch4s4-3-5.html (2) The total system efficiency (ηo) of a CHP system is the sum of the net useful power output (WE) and net useful thermal outputs (ΣQTH) divided by the total fuel input (QFUEL), as shown below:

| PROJECT CLASS | DEFINITION | RATIONALE | STANDARDS USED | REPAYMENT TERMS |

| --- | --- | --- | --- | --- | | Project Class C: Energy Efficiency | | | | | | TYPE 3: Smart Grids | Integrated, technologically advanced electricity networks with improved dynamic capabilities to monitor and control the input and output of all their constituent technical components (such as power generation, Network Management Solutions, High Voltage Direct Current (HVDC) converters and systems, Flexible Alternating Current Transmission Systems (FACTS), Special Power Systems (SPS), transmission, distribution, storage, Smart Grid Power Electronics Solutions, consumption reduction, metering, distributed energy resources). ICT according to internationally agreed industry standards such as NIST-SGIP and ETSI-CEN-Cenelec. | To enable network operators, transmission and distribution system operators, grid users, storage owners, metering operators, applications and service providers or power exchange platform operators to create economical, environmentally-friendly, balanced and sustainable power systems with reduced transmission losses and optimised levels of supply quality, safety, grid stability, reliability, renewable power collection and cost-efficiency by supporting supply contracts involving predominantly export of state-of-the-art, innovative technologies and services. | Standards 1, 2 (a or b) and 3 shall be met. 1. The total cost of the project includes at least 20 % for eligible information and communication technology (ICT) upgrades. 2a.  An estimated minimum 10 % reduction in the amount of CO2 emissions from fossil fuel will result from the project or application, or 2b.  Demonstrated significant CO2 emission reductions will be enabled through either: — reductions in energy losses within the electricity grid served by the Smart Grid application or project by at least 5 %; or — reductions in aggregate electricity consumption by loads served by the Smart Grid application or project by at least 5 %; or — intermittent feed-in of renewable energies, including from subordinate voltage levels, representing at least an additional 10 % of the total energy fed into the grid where the smart grid technologies are applied. 3. Prior to authorisation, an independent, qualified third party will review the project and prepare a report that describes the characteristics of the proposed Smart Grid application or project and verifies whether the project or application will meet standards 1 and 2 (a or b). For projects using the 2b standard, estimated CO2 emissions reductions enabled by the project will be included in the report. Such report will be shared with Participants prior to any authorisation of financial support and authorisation will be conditional on the report positively verifying that standards 1 and 2 (a or b) will be met by the proposed Smart Grid project or application. Standards will be measured by comparing the estimated emissions or energy use from an Area Served by the Grid if the proposed Smart Grid technologies are applied to emissions or energy use of that same area if the proposed Smart Grid technologies were not applied. | 15 years |

Appendix III

Eligibility criteria for climate change adaptation projects

A project is eligible for the financial terms and conditions set out in this Sector Understanding if:

d) The useful life of the project exceeds 15 years.

Appendix IV

Methodology to be used when determining the eligibility of sectors relating to Article 2 of this sector understanding

When proposing that Project Class or Type be added to Appendix II of this Sector Understanding, Participants shall provide a detailed description of the proposed Project Class or Type and information on how such projects fulfil the criteria set out in Article 2 b) of this Sector Understanding; such information shall include:

c) A description of the financial barriers in the proposed Project Class or Type, including any financial needs and market conditions, and identify the provisions under this Sector Understanding that are expected to enable such projects to proceed.

Appendix V

List of definitions

ANNEX V

SECTOR UNDERSTANDING ON EXPORT CREDITS FOR RAIL INFRASTRUCTURE

The Participants to this Sector Understanding agree that the financial terms and conditions of the Sector Understanding, which complements the Arrangement, shall be implemented in a way that is consistent with the Purpose of the Arrangement.

CHAPTER I

Scope of the sector understanding

b) The specific types of track-bound transportation systems that are eligible for support according to the terms and conditions of this Annex are:

1) Any type of rail transportation system. 2) Trolleybus transportation systems. 3) Cable car transportation systems (³⁵).

CHAPTER II

Provisions for export credits

1) For contracts in Category I countries (as defined in Article 10 of the Arrangement): 12 years. 2) For contacts in Category II countries (as defined in Article 10 of the Arrangement): 14 years.

1) The transaction shall involve an overall contract value of more than SDR 10 million; and 2) The repayment terms shall not exceed the useful life of the track-bound transportation infrastructure asset financed; and 3) For transactions in Category I countries, the transaction involves/is characterised by: — Participation in a loan syndication with private financial institutions that do not benefit from Official Export Credit Support, whereby:

ii) Official export credit support provided by the Participants comprises less than 50 % of the syndication. — Premium rates for any official support that do not undercut available private market financing and that are commensurate with the corresponding rates being charged by other private financial institutions that are participating in the syndication.

The repayment of principal and interest shall be provided according to Article 15 of the Arrangement except that the maximum weighted average life of the repayment period under paragraph d) 4) of that Article shall be:

b) For transaction in a Category II countries, seven-and-a-quarter years.

CHAPTER III

Procedures

1) A transaction in a Category II country; or 2) A transaction supported pursuant to a Common Line set out in accordance with Article 2 c) of this Sector Understanding. Such prior notification may be made concurrently with, and subject to the approval of, the Common Line proposal.

Notwithstanding the provisions of Article 61 a) of the Arrangement, all agreed Common Lines shall cease to be valid on 31 December 2023, unless the Participants agree to the extension of this Sector Understanding in accordance with Article 6 d) of this Sector Understanding.

CHAPTER IV

Monitoring and review

d) After 31 December 2023, the terms and conditions of this Sector Understanding shall be discontinued unless the Participants agree otherwise.

ANNEX VI

TERMS AND CONDITIONS APPLICABLE TO PROJECT FINANCE TRANSACTIONS

CHAPTER I

General provisions

b) Where no corresponding provision exists in this Annex, the terms of the Arrangement shall apply.

CHAPTER II

Financial terms and conditions

The maximum repayment term is 14 years, except when official export credit support provided by the Participants comprises more than 35 % of the syndication for a project in a High Income OECD country, the maximum repayment term is 10 years.

The principal sum of an export credit may be repaid in unequal instalments, and principal and interest may be paid in less frequent than semi-annual instalments, as long as the following conditions are met:

e) The Participant shall give prior notification according to Article 4 of this Annex.

CHAPTER III

Procedures

A Participant shall notify all Participants of the intent to provide support according to the terms and conditions of this Annex at least ten calendar days before issuing any commitment. The notification shall be provided in accordance with Annex VII of the Arrangement. If any Participant requests an explanation in respect of the terms and conditions being supported during this period, the notifying Participant shall wait an additional ten calendar days before issuing any commitment.

Appendix 1

Eligibility criteria for project finance transactions

I. BASIC CRITERIA

The transaction involves/is characterised by:

h) Limited or no recourse to the sponsors of the private sector shareholders/sponsors of the project after completion.

II.   ADDITIONAL CRITERIA FOR PROJECT FINANCE TRANSACTIONS IN HIGH INCOME OECD COUNTRIES

The transaction involves/is characterised by:

— The Participant is a minority partner with pari passu status throughout the life of the loan, and — Official export credit support provided by the Participants comprises less than 50 % of the syndication.

b) Premium rates for any official support that do not undercut available private market financing and that are commensurate with the corresponding rates being charged by other private financial institutions that are participating in the syndication.

ANNEX VII

INFORMATION TO BE PROVIDED FOR NOTIFICATIONS

The information listed in Section I below shall be provided for all notifications made under the Arrangement (including its Annexes). In addition, the information specified in Section II shall be provided, as appropriate, in relation to the specific type of notification being made.

I. INFORMATION TO BE PROVIDED FOR ALL NOTIFICATIONS

1.Notifying country

2.Date of notification

3.Notifying institution/authority/agency

4.ECA(s) extending official export credit support

a. ECA providing insurance/guarantee support

b. ECA providing finance support

5.Notification number

6.Identification codes (internal)

7.Credit line reference number (if relevant)

8.Status (e.g. original, revision, replacement)

9.Revision number (if relevant)

10.Arrangement Article(s) under which notification is being made

11.Reference number of notification matched (if relevant)

12.Description of support being matched (if relevant)

13.Destination country

14.Buyer name

15.Buyer country

16.Buyer location (if known)

17.Buyer status

18.Buyer type

19.Borrower name (if the borrower is not the buyer)

20.Borrower country (if the borrower is not the buyer)

21.Borrower location (if the borrower is not the buyer)

22.Borrower status (if the borrower is not the buyer)

23.Borrower type (if the borrower is not the buyer)

24.Guarantor name (if relevant)

25.Guarantor country (if relevant)

26.Guarantor location (if relevant)

27.Guarantor status (if relevant)

28.Guarantor type (if relevant)

29.Detailed description of the products and/or services being exported

30.Detailed description of the project (or sector) for which the exports are being provided

31.Suggested purpose code

32.Location of the project (if known)

33.Tender closing date (if relevant)

34.Expiry date of credit line (if relevant)

35.Value of contract(s) supported, according to the following scale in millions of SDRs:

Category	From	To
I:	0	1
II:	1	2
III:	2	3
IV:	3	5
V:	5	7
VI:	7	10
VII:	10	20
VIII:	20	40
IX:	40	80
X:	80	120
XI:	120	160
XII:	160	200
XIII:	200	240
XIV:	240	280
XV:	280	(*1)
(*1) Indicate the number of SDR 40 million multiples in excess of SDR 280 million, e.g. SDR 410 million would be notified as Category XV+3.

36.Value of contract(s) supported, actual amount (in contract currency)

37.Currency of contract(s)

The following information should be provided in respect of each tranche supported for transactions comprising multiple tranches with different financial terms and conditions.

38.Credit value, SDR scale

39.Credit value, actual amount (optional in lieu of item 38)

40.Credit currency

41.Down payment (% export contract value)

42.Local costs (% export contract value)

43.SPOC determined according to (with reference to Annex XIV definition q)

44.Length of the repayment period

45.Length of repayment period units

46.Interest rate base

47.Interest rate or margin above base

48.Comments, notes and/or explanations regarding the information provided in Section I

II.   ADDITIONAL INFORMATION TO BE PROVIDED, AS APPROPRIATE, FOR NOTIFICATIONS MADE IN RELATION TO SPECIFIC PROVISIONS

The following information should be provided in respect of each tranche supported for transactions comprising multiple tranches with different financial terms and conditions.

49.Type of local costs supported

50.Nature of local costs supported: Capital equipment?

51.Nature of local costs supported: Deliveries from local subsidiaries and/or affiliates?

52.Nature of local costs supported: Local construction or installation costs?

53.Nature of local costs supported: VAT, import duties, other taxes?

54.Nature of local costs supported: Other?

55.Description of “other” local costs

56.Comments, notes and/or explanations regarding the information provided in Section II.a.

57.Repayment profile

58.Repayment frequency (principal)

59.Repayment frequency (interest)

60.First principal repayment after SPOC

61.First principal repayment after SPOC units

62.Amount of interest capitalised before the SPOC

63.Capitalised interest currency

64.Weighted average life of the repayment period

65.Percentage principal repaid by mid-point of credit

66.Explanation of the reason for not providing support according to standard repayment structures

67.Comments, notes and/or explanations regarding the information provided in Section II.b.

68.Country risk classification of the obligor’s country

69.Application of an offshore future flow structure combined with an offshore escrow account? (Categories 1–7 only)

70.The applicable country and buyer risk categories are related to the (buyer, borrower, guarantor, project, transaction)

71.Applicable country risk classification

72.Applicable buyer risk category

73.Does the entity indicated in #70 have a foreign currency rating from an accredited credit rating agency (CRA)?

74.Most favourable accredited CRA foreign currency rating for the entity indicated in #70

75.Accredited CRA providing the rating reported in #74

76.Basis for applicable Minimum Premium Rate (MPR)

77.Basis for actual premium rate charged

78.Comments, notes and/or explanations regarding the basis for the actual premium rate charged

79.Length of the drawdown period

80.Length of drawdown period units

81.Percentage of cover for political (country) risk

82.Percentage of cover for commercial (buyer) risk

83.Official export credit product

84.Interest covered during claims waiting period?

85.MPR (based on item 76) country risk mitigation or buyer risk credit enhancements

86.Local currency financing? (Cat 1–7 MPRs only)

87.Local currency factor (LCF) applied

88.Buyer risk credit enhancements?

89.Total credit enhancement factor (CEF) applied

90.Applicable MPR (based on item 76) after any country risk mitigation or buyer risk credit enhancements

91.Actual premium rate charged

92.Comments, notes and/or explanations regarding the information provided in Section II.c.

93.Explanation of the characteristics of the obligor against the criteria for Buyer Risk Category CC0 in Annex XII of the Arrangement

94.Rationale for buyer risk category better than accredited CRA rating

95.Type of name-specific or related entity debt instrument used to set premium

96.Name of the debt instrument entity

97.Detailed description and key characteristics of the debt instrument and the methodology used to derive the pricing, including (but not limited to) information about the tenor, credit profile, liquidity and currency of the instrument

98.Relationship between the transaction obligor/guarantor and the related entity

99.Does the transaction obligor/guarantor have the same issuer CRA rating as the related entity?

100.Does the related entity meet all of the criteria listed in Annex XIV (definition “o”) of the Arrangement?

101.Detailed explanation of how the criteria that define a related entity have been met

102.Justification for the buyer risk classification

103.Best accredited CRA foreign currency rating for the sovereign in the obligor’s/guarantor’s domicile (If the applicable buyer risk category is more favourable than the best accredited CRA rating of the sovereign in the obligor’s/guarantor’s domicile for an unrated obligor)

104.Accredited CRA providing the rating reported in #103

105.Is syndicated loan package structured as either an asset-backed or project finance transaction?

106.Do commercial market loans/guarantees without any bilateral or multilateral support comprise at least 25 % of the syndicate?

107.Are all parties to the financing on pari passu terms on all financial terms and conditions, including the security package?

108.Are the financial terms and conditions of the transaction fully compliant with the Arrangement, as modified by the provisions for Market Benchmark pricing in syndicated loans/guarantees transactions?

109.Detailed description of the methodology used to derive the premium (or all-in cost for direct lending) reported in item 91

110.Comments, notes and/or explanations regarding the information provided in Section II.d.

111.Does the guarantee cover the entire duration of the debt?

112.Is the guarantee irrevocable, unconditional and available on demand?

113.Is the guarantee legally valid and capable of being enforced in the guarantor country’s jurisdiction?

114.Is the guarantor creditworthy in relation to the size of the guaranteed debt?

115.Is the guarantor subject to the monetary control and transfer regulations of the country in which it is located?

116.Percentage of the total amount at risk (i.e. principal and interest) that is covered by the guarantee

117.Does any financial relationship exist between the guarantor and the obligor?

118.Type of relationship

119.Is the guarantor legally and financially independent and can it fulfil the obligor’s payment obligation?

120.Would the guarantor be affected by events, regulations or sovereign intervention in the obligor’s country?

121.Comments, notes and/or explanations regarding the information provided in Section II.e.

For the application of an offshore future flow structure combined with an offshore escrow account:

133.Information on additional factors taken into consideration and/or any other comments regarding the application of an offshore future flow structure combined with an offshore escrow account

For local currency financing:

140.Local currency used

141.Information on additional factors taken into consideration and/or any other comments regarding the application of local currency financing

142.Comments, notes and/or explanations regarding the information provided in Section II.f.

151.Comments, notes and/or explanations regarding the information provided in Section II.g.

152.Does the repayment term supported exceed the useful life of the track-bound transportation infrastructure asset financed?

153.Comments (regarding item 152)

For all transactions involving Category I countries:

154.Comprehensive explanation for provision of official support

155.Has a waiver of the conditions set out in Article 2, Paragraph b) 3) of Annex V been requested via a common line?

156.Common line status

157.Comments, notes and/or explanations regarding any common line

158.Explanation of why project finance terms are being provided

159.Contract value in relation to turnkey contract, portion of sub-contracts, etc.

160.Type of cover provided prior to SPOC

161.Percentage of cover for political risk prior to SPOC

162.Percentage of cover for commercial risk prior to SPOC

163.Type of cover provided after SPOC

164.Percentage of cover for political risk after SPOC

165.Percentage of cover for commercial risk after SPOC

166.Length of the construction period

167.Length of construction period units

184.Total debt syndication amount for the project, including official and private lenders

185.Total debt syndication currency

186.Percentage of debt syndication from Participants to the Arrangement

187.Percentage of the debt syndication from private lenders

188.Minority partner in loan syndication?

189.Comments (regarding item 195)

190.Premium rate meets market criteria?

191.Comments (regarding item 197)

192.Comments, notes and/or explanations regarding the information provided in Section II.h.

193.Total amount of trade-related aid, SDR scale

194.Composition of trade-related aid package: share of non-concessional export credits in conformity with the Arrangement

195.Composition of trade-related aid package: share of other funds at or near market rates

196.Composition of trade-related aid package: share of other official funds with a concessionality level of less than the minimum permitted under Article 35 except in cases of matching

197.Composition of trade-related aid package: share of down payment from the purchaser

198.Composition of trade-related aid package: share of payments on or before the starting point of credit that are not considered

199.Composition of trade-related aid package: share of grants

200.Composition of trade-related aid package: share of concessional credits

201.Terms and conditions of concessional credits: grace period

202.Terms and conditions of concessional credits: length of repayment period

203.Terms and conditions of concessional credits: repayment frequency

204.Terms and conditions of concessional credits: repayment profile

205.Terms and conditions of concessional credits: currency

206.Terms and conditions of concessional credits: interest rate

207.Terms and conditions of concessional credits: applicable DDR

208.Terms and conditions of concessional credits: concessionality level

209.Overall concessionality level of the trade-related aid package

210.Comments, notes and/or explanations regarding the information provided in Section II. k)

ANNEX VIII

CALCULATION OF THE MINIMUM PREMIUM RATES FOR COUNTRY RISK CATEGORY 1–7 TRANSACTIONS

MPR Formula

The formula for calculating the applicable MPR for an export credit involving an obligor/guarantor in a country classified in Country Risk Categories 1–7 is:

MPR = {[(ai * HOR + bi) * max (PCC, PCP)/0,95] * (1-LCF) + [cin * PCC/0,95 * HOR * (1-CEF)]} * QPFi * PCFi * BTSF

where:

— ai= country risk coefficient in country risk category i (i = 1–7)

— cin= buyer risk coefficient for buyer category n (n = SOV+, SOV/CCO, CC1-CC5) in country risk category i (i = 1–7)

— bi= constant for country category risk category i (i = 1–7)

— HOR= horizon of risk

— PCC= commercial (buyer) risk percentage of cover

— PCP= political (country) risk percentage of cover

— CEF= credit enhancements factor

— QPFi= quality of product factor in country risk category i (i = 1–7)

— PCFi= percentage of cover factor in country risk category i (i = 1–7)

— BTSF= better than sovereign factor

— LCF= local currency factor

Applicable Country Risk Classification

The applicable country risk classification is determined according to Article 23 e) of the Arrangement, which in turn determines the country risk coefficient (ai) and constant (bi) that are obtained from the following table:

| | 1 | 2 | 3 | 4 | 5 | 6 | 7 |

| --- | --- | --- | --- | --- | --- | --- | --- | | a | 0,090 | 0,200 | 0,350 | 0,550 | 0,740 | 0,900 | 1,100 | | b | 0,350 | 0,350 | 0,350 | 0,350 | 0,750 | 1,200 | 1,800 |

Selection of the Appropriate Buyer Risk Category

The appropriate buyer risk category is selected from the following table, which provides the combinations of country and buyer risk categories that have been established and the agreed concordance between buyer risk categories CC1–CC5 and the classifications of accredited CRAs. Qualitative descriptions of each buyer risk category (SOV+ to CC5) have been established to facilitate the classification of obligors (and guarantors) and are provided in Annex XII.

Country Risk Category
1	2	3	4	5	6	7
SOV+	SOV+	SOV+	SOV+	SOV+	SOV+	SOV+
SOV/CC0	SOV/CC0	SOV/CC0	SOV/CC0	SOV/CC0	SOV/CC0	SOV/CC0
CC1 AAA to AA-	CC1 A+ to A-	CC1 BBB+ to BBB-	CC1 BB+ to BB	CC1 BB-	CC1 B+	CC1 B
CC2 A+ to A-	CC2 BBB+ to BBB-	CC2 BB+ to BB	CC2 BB-	CC2 B+	CC2 B	CC2 B- or worse
CC3 BBB+ to BBB-	CC3 BB+ to BB	CC3 BB-	CC3 B+	CC3 B	CC3 B- or worse
CC4 BB+ to BB	CC4 BB-	CC4 B+	CC4 B	CC4 B- or worse
CC5 BB- or worse	CC5 B+ or worse	CC5 B or worse	CC5 B- or worse

The selected buyer risk category, in combination with the applicable country risk category determines the buyer risk coefficient (cin) that is obtained from the following table:

| Buyer Risk Category | Country Risk Category | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | | | SOV+ | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | | SOV/CC0 | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | 0,000 | | CC1 | 0,110 | 0,120 | 0,110 | 0,100 | 0,100 | 0,100 | 0,125 | | CC2 | 0,200 | 0,212 | 0,223 | 0,234 | 0,246 | 0,258 | 0,271 | | CC3 | 0,270 | 0,320 | 0,320 | 0,350 | 0,380 | 0,480 | n/a | | CC4 | 0,405 | 0,459 | 0,495 | 0,540 | 0,621 | n/a | n/a | | CC5 | 0,630 | 0,675 | 0,720 | 0,810 | n/a | n/a | n/a |

Horizon of Risk (HOR)

The Horizon of Risk (HOR) is calculated as follows:

Percentage of Cover for Commercial (Buyer) Risk (PCC) and Political (Country) Risk (PCP)

The Percentages of Cover (PCC and PCP) expressed as a decimal value (i.e. 95 % is expressed as 0,95) in the MPR formula.

Buyer Risk Credit Enhancements

The value of the credit enhancement factor (CEF) is 0 for any transaction that is not subject to any buyer risk credit enhancements. The value of the CEF for transactions that are subject to buyer risk credit enhancements is determined according to Annex XII, subject to the restrictions set out in Article 29 c) of the Arrangement and may not exceed 0,35.

Quality of Product Factor (QPF)

The QPF is obtained from the following table:

| Product Quality | Country Risk Category | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | | | Below Standard | 0,9965 | 0,9935 | 0,9850 | 0,9825 | 0,9825 | 0,9800 | 0,9800 | | Standard | 1,0000 | 1,0000 | 1,0000 | 1,0000 | 1,0000 | 1,0000 | 1,0000 | | Above Standard | 1,0035 | 1,0065 | 1,0150 | 1,0175 | 1,0175 | 1,0200 | 1,0200 |

Percentage of Cover Factor (PCF)

The PCF is determined as follows:

The percentage of cover coefficient is obtained from the following table:

| | Country Risk Category | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | | 1 | 2 | 3 | 4 | 5 | 6 | 7 | | | Percentage of cover coefficient | 0,00000 | 0,00337 | 0,00489 | 0,01639 | 0,03657 | 0,05878 | 0,08598 |

Better than Sovereign Factor (BTSF)

When an obligor is classified in the “better than sovereign” (SOV+) buyer risk category, BTSF = 0,9, otherwise BTSF = 1.

Local Currency Factor (LCF)

For transaction making use of local currency country risk mitigation, the value of the LCF may not exceed 0,2. The value of the LCF for all other transactions is 0.

ANNEX IX

PREMIUM BENCHMARKS FOR MARKET BENCHMARK TRANSACTIONS

Un-covered Tranche of Export Credits or the non-ECA Covered Part of a Syndicated Loan

The price indicated by private banks/institutions with respect to the uncovered tranche of the export credit in question (or sometimes as the non-ECA covered part of a syndicated loan) may represent the best match to ECA cover. Pricing on such un-covered portions or non-covered parts should only be used if provided on commercial terms (e.g. this would exclude IFI funded portions).

Name-Specific Corporate Bonds

Corporate bonds reflect name specific credit risk. Care should be used in matching in terms of the ECA contract characteristics, such as term of maturity, and currency denomination, and any credit enhancements. If primary corporate bonds (i.e. all-in yield upon issuance) or secondary corporate bonds (i.e. the option adjusted spread over the appropriate curve, which is usually the relevant currency swap curve) are used, those for the obligor should be used in the first instance; if not available, primary or secondary corporate bonds from Related Entities may be used.

Name-Specific Credit Default Swaps

Credit Default Swaps (CDS) are a form of protection against default. The CDS spread is the amount paid per period by the buyer of the CDS as a percentage of notional principal, and is usually expressed in basis points. The CDS buyer effectively buys insurance against default by making payments to the seller of the CDS for the life of the swap, or until the credit event occurs. A CDS curve for the obligor should be used in the first instance; if not available, CDs curves from Related Entities may be used.

Loan Benchmarks

Primary loan benchmarks (i.e. pricing upon issuance) or secondary loan benchmarks (i.e. the current yield on the loan expected by the financial institution purchasing the loan from another financial institution). All fees must be known for primary loan benchmarks so that the all-in yield can be calculated. If loan benchmarks are used, those for the obligor should be used in the first instance; if not available, those from similar entities may be used.

Benchmark Market Curves