The sagging US economy and its energy sector will soon be getting a boost, as well as some help in competing with China.
On September 30, the board of directors of the US Export-Import Bank approved $3.4 billion in financing to support US exports in a wide range of industries, including aerospace, oil and gas, locomotives and solar. The hope is that the financing will create over 20,000 news American jobs and help in efforts put the country’s economy back on its feet. For energy companies struggling to compete with a heavily subsidized Chinese energy market, the financing could be a major game changer.
“The Bank has responded to a record level of financing requests this year to provide export financing on behalf of US companies expanding foreign sales and sustaining and creating jobs,” said Ex-Im Bank Chairman and President Fred Hochberg.
Hochberg emphasized that US taxpayers will not be shouldering the burden of the financing. The bank is a self-sustaining agency that receives no net appropriation from the federal government and, like any other bank, charges fees and interests to fund its activity.
Over the summer, various transactions were proposed. Here are the transactions that were approved as part of the $3.4 billion total that is being dedicated to US exports:
1. $1 billion in authorizations will support sales of US equipment and services to oil and gas company Petroleos Mexicanos (Pemex) for both on and offshore production. A dedicated $200 million will be used only for small businesses purchases.
2. $1.3 billion in loan guarantees will support sales of Boeing commercial aircraft to Air India. The board has also approved a preliminary commitment of $2.1 billion of future deliveries.
3. $425 million in direct loans will support sales of 196 GE Evolution Series locomotives to JSC Lokomotiv, a subsidiary of the state-owned national railway Kazakhstan Temir Zholy (KTZ).
4. $19 million in direct loans will support sales of Oregon-based SolarWorld solar photovoltaic (PV) panels to the Indian company, Tatith Solar, a subsidiary of Tatith Energies Gujarat Private.
5. $666.4 million working capital loan guarantees will support Citibank supply-chain financing to Boeing small-business suppliers. Guarantees will support a $740.5 million facility, managed by Citibank, which will finance accounts receivable due from the Boeing Company to its US based suppliers.
Photo Caption: US Treasury Secretary Timothy Geithner (right) answers questions with Export-Import Bank President Fred Hochberg (left) at the Export-Import Bank of the United States 2010 Annual conference March 12, 2010 in Washington, DC. Geithner spoke about the state of the US economy during his remarks.
