Abstract
If a project company is in a developing country and imports equipment for the project, export credit agencies (ECAs) can provide political risk cover, full cover, or direct loans. If political risk or full cover is provided, ECAs can also provide funding support through interest subsidies to commercial banks. Thus, either by direct loans or through interest rate subsidies, ECAs may enable the exporter to offer competitive fixed-rate finance. ECAs also provide investment insurance (against political risks) for equity investors. Export credits used in project finance are normally buyer credits (direct loans provided to the importer by the exporter's bank or the ECA itself) rather than supplier credits (loans provided by the exporter to the importer, with finance from the exporter's bank or ECA). Therefore, ECAs deal with the exporter or the exporter's bank rather than the project company, although sponsors of major projects usually have their own direct discussions with ECAs.
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