COUNTRY CREDIT AND GUARANTEE PROGRAM

The objective of the program is to provide financing support for projects and export of capital goods undertaken by Turkish companies through medium/long-term credit and guarantee programs.

Functions

1) Direct loans.

2) Guarantee facility.

3) Letter of intent.

4) Concessional loan.

The Borrower

The Borrower of the Country Credits, which is a buyers' credit scheme by nature, can be:

- the public institutions/banks in the borrowing country nominated by the host governments under sovereign guarantee,

- the banks designated by the intergovernmental protocols,

- the banks that are acceptable to Türk Eximbank,

- the buyers under the guarantee of the abovementioned banks.

The Official Application

The formal application for the loan should be made by the borrower and should include detailed information about the transaction such as the requested credit amount, maturity, warranties, project and capital goods to be exported.

Required Qualifications for the Firms

In order to be eligible to benefit from this program the firms must be established in accordance with the Turkish Commercial Code and should be financially sound and experienced in their field of operation.

The firms benefitting from the credit may be a main contractor, a subcontractor or a partner of a consortium.

The firms that are to realize projects abroad should have "International Contracting Certificate" or "Temporary International Contracting Certificate" issued by the Ministry of Public Works and Settlement.

Documents Required

After the borrowers apply for the credit;

Ø For financing of export of capital goods; the exporters should submit to Türk Eximbank a copy of the contract together with the expertise reports issued by Chambers of Commerce/Industry certifying that exported goods have a minimum Turkish content of 50%.

Ø For financing of projects; a) a feasibility study including the information covered in the Project Information Form and b) a copy of the contract, should be submitted to Turk Eximbank. The feasibility studies should be prepared or approved by a consultant, which is registered to the Association of Turkish Consulting Engineers and Architects and is a member of FIDIC.

Evaluation of the Applications

The applications are evaluated in accordance with the OECD Arrangement and Türk Eximbank appraisal criteria.

The Loan Agreement

The loan agreement is signed between Türk Eximbank and the borrower.

The Intermediary Commercial Bank

An intermediary Turkish commercial bank, for the purpose of carrying out the commercial banking transactions, is appointed in accordance with the preference of the firm.

The Guidelines

Türk Eximbank issues Guidelines that determine the mutual rights and obligations of Türk Eximbank, the intermediary commercial bank and the Turkish firm for each transaction.

The Disbursements

Following the evaluation of the request for disbursements of the borrower in the context of loan agreement and the intermediary commercial bank in relation to the letter of credit, if any; and submission of other documents required by Turk Eximbank as set out in the Guidelines, the credit amount is disbursed to the bank account of the firm at the counters of the intermediary bank.

The Cost of Credit to the Firm

A rate of exposure fee is determined in accordance with the risk perception of the buyer country and the borrower and such fee is deducted from the firm in each disbursement. In addition, expenses related to site visits, consultancy services and similar expenses that may arise during the lifetime of the project will also be borne by the firm.

The Principal and Interest Payments

Principal and interest payments are made by the borrower pursuant to the loan agreement.

Country Limits

The countries of operation and the annual credit limits to those countries are determined by the Cabinet of Ministers.

Terms of Financing

Ø Limit: The financial support provided is limited with 85% of the Turkish goods and services. The remaining portion for 15% that is not within the scope of Türk Eximbank's support is met by the employer in advance or parallel to the Türk Eximbank credit. Goods and services to be exported from Turkey should have a minimum Turkish content of 50%, which is to be certified by Chambers of Commerce/Industry and the services should be carried out by Turkish real or legal persons.

Ø Maturity: The maturity, including the grace period, is determined depending on the nature of the project or transaction. The first principal repayment falls due on the ending date of the grace period. Grace period is determined by adding six months to the construction period and during this period only semi-annual interest payments are realized. The principal payments are also realized in equal, semi-annual installments.

Ø Interest rates: Interest rate is determined according to the "cost of funding of Türk Eximbank and the maturity of the loan (LIBOR/EURIBOR + spread).

Warranties

Sovereign guarantee or a reputable bank guarantee is accepted, depending on the risk classification of the relevant country. Furthermore, additional security mechanisms may also be required in accordance with the nature of the project.

Meeting the Firm's Export Commitment

Firms should submit the "Foreign Exchange Certificate"s, evidencing the exports in full amount of the credit.

Duties, taxes and levies exemptions

In accordance with the regulations, the amounts received from the firms are subject to the tax exemptions.

Guarantee Facility

If the export transactions or the projects undertaken in foreign countries by Turkish firms are financed by foreign or local banks, Türk Eximbank may issue a letter of guarantee to the lending bank in favor of the borrower. Firm's obligations regarding the export commitment and submission of the documents are similar to those of the direct credits.

Letter of Intent

Türk Eximbank issues Letters of Intent in favor of the Turkish firms planning to undertake new projects or bid in international tenders. Letters of Intent should not be construed as financing commitment. Financial terms and conditions are determined together with the general conjuncture at the time of the credit application.

These letters are usually issued for a period of six-months and can be extended, if necessary.

The applicant Turkish firms should submit their written requests via the Application Form.

Concessional Loan

Concessional loans differ from the commercial loans that Türk Eximbank provides with respect to lending terms and procedures. Concessional loans have long maturities and low-interest rates and the eligible countries are determined by international regulations. The applications of the Ministries of Finance or Economy of the borrowing country are made directly to the Undersecretariat of Treasury and Türk Eximbank is assigned to lend concessional loans following the decision the Cabinet of Ministers.

The Environmental Assessment

It is mandatory to comply with the provisions of Türk Eximbank Environmental Guidelines to mitigate the adverse environmental impacts of the projects financed under the program.

Combating Bribery

Türk Eximbank requires the "Anti-Bribery Undertaking" at the application stage which is prepared in accordance with "The Convention on Combating Bribery of Foreign Public Officials in International Business Transactions" and the related Turkish Criminal Code.

For More Information:

Countries

In charge

Tel, Fax, e-mail

Albania, Azerbaijan, , Cambodia, Estonia, Latvia, Libya, Lithuania, Nakhichevan, Russian Federation, Senegal, Slovenia, Sudan, Syria, Tanzania.

Zehra TÜRKÖZ SAYAR

Manager

Suzan USTA

Assistant Manager

Tel : (312) 417 13 00 /581

Fax: (312) 425 75 47

e-mail: zsayar@eximbank.gov.tr

Tel : (312) 417 13 00 /394

Fax: (312) 425 75 47

e-mail: skandilci@eximbank.gov.tr

Angola, Bangladesh, Benin, Bosnia and Herzegovina, Cameroon, Egypt, Greece, Hungary, India, Iran, Kenya, Kuwait, Malaysia, Mauritania, Moldova, Mongolia, Montenegro, Morocco, Pakistan, Poland, Serbia, Thailand, Togo, Turkmenistan, TRNC, Yemen.

Funda BAYDAR

Manager

Övül DOĞAN

Assistant Manager

Tel : (312) 417 13 00 /579

Fax: (312) 425 75 47

e-mail: fbaydar@eximbank.gov.tr

Tel : (312) 417 13 00 /390

Fax: (312) 425 75 47

e-mail: odogan@eximbank.gov.tr

Afghanistan, Algeria, Belarus, Bulgaria, Congo, Czech Republic, Croatia, Cuba, Djibouti, Ethiopia, Gambia, Georgia, Ghana, Iraq, Israel, Jordan, Kosovo, Lebanon, Macedonia, Nigeria, Palestine, Romania, Saudi Arabia, Slovakia, Tunisia, Ukraine.

M.Cem KARAKURT

Assistant Manager

Gaye CENGİZ

Assistant Manager

Tel : (312) 417 13 00 /388

Fax: (312) 419 71 55

e-mail: ckarakurt@eximbank.gov.tr

Tel : (312) 417 13 00 /403

Fax: (312) 419 71 55

e-mail: gcengiz@eximbank.gov.tr

Argentina, Bahrain, Brazil, Burkina Cote D'Ivoire, Faso, Chile, China, Colombia, Equatorial Guinea, Indonesia, Philippines, Gabon, Guinea, Japan, Kazakhstan, Kyrgyz Republic, Mali, Mexico, Mozambique, Myanmar, South Africa, South Korea, Taiwan, Tajikistan, Uganda, Uzbekistan, Vietnam.

Elif KOŞOK

Manager

Özlem AYDIN

Assistant Manager

Tel : (312) 417 13 00 /580

Fax: (312) 419 71 55

e-mail: ekosok@eximbank.gov.tr

Tel : (312) 417 13 00 /412

Fax: (312) 419 71 55

e-mail: ocaliskan@eximbank.gov.tr

Last saved: May 27, 2010

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