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Political events such as revolution, war, civil unrest, arbitrariness of state authorities, but also problems of convertibility and transfer restrictions are unratable risks which may jeopardize the existence of an enterprise.
Economic events such as default of payment or the insolvency of a debtor before goods or equipment are finished but also after shipment or after services are performed constitute serious risks as well.
With the support of the German government activities abroad become calculable and fundable.
- Export credit guarantees protect exports against commercial and political risks.
- Investment guarantees protect foreign direct investments against political risks.
- Untied loan guarantees protect against political and in exceptional cases commercial risks.
In principle, German government guarantees make allowance for the specific issues of an export transaction or project. The exporter's or investor's freedom to make a contract is not infringed. Coverage is rather tailored to the particular project on the basis of the General Terms and Conditions and the prevailing practice and ruling of the competent Interministerial Committee.
Tailored coverage is not only made available for large projects and their financing. Guarantees of the German government are particularly useful for small and medium-sized German enterprises for their export transactions or in establishing a subsidiary or branch abroad and take into account their specific risk conditions.
Both, for project financing with larger export and investment volumes - for example the construction of a gas and steam power plant - and for low-volume, though however complex, projects of SMEs the German government guarantees are often granted jointly.
Therefore, we recommend to approach Euler Hermes or PwC in the planning stage already.
