In addition to export finance facilities on commercial terms, the Austrian export industry can make use of financing on concessional terms under certain conditions. Financing on concessional terms can be provided only to qualified countries and for specific projects.
Soft loan policy
Soft loan financing is used in accordance with the soft loan policy of the Federal Ministry of Finance to assist Austrian exporters competing in international markets with the overall objective of fostering sustainable development in recipient countries. The financing is solely done in EURO.
Exporter's qualification
Export companies/general contractors domiciled in Austria must employ staff at the Austrian company's site with the relevant technical know-how in the relevant sector and which is trained to further develop its knowledge. Furthermore the exporter/general contractor must show a track record of projects already realised with this staff at non-concessional terms in the relevant sector and continue to do so.
Types of soft loans
Soft loan financing is available either in the form of a pre-mixed credit (this is a loan with a low interest rate, a grace period and long payment terms), or a mixed credit (a financing package usually consisting of a 15 % or as the case may be 20 % non refundable grant from the Federal Ministry of Finance and an 85 % or as the case may be 80 % soft loan). These attractive terms and conditions are made possible by official support from Austrian public authorities.
The Federal Ministry of Finance offers, as a special measure, an additional grant in order to reduce the total costs for the recipient country. This is done until further notice.
Transactions in Austria's interest
Soft loan financing is provided in the form of tied aid credits, i.e. it is restricted to the export of mainly Austrian goods and services. The maximum permissible foreign content (which means foreign content from third countries plus local costs) is limited to 50 % of the value of the contract.
Assessment
Within OeKB the Department for Project and Environmental Analyses is in charge of assessing projects. In order to do so the exporter has to complete a questionnaire which must be added to his application for an export guarantee.
For so-called de-minimis projects - projects with a contract value below 2 million SDR (Special Drawing Rights) - a simplified questionnaire is foreseen. It contains questions concerning the project itself as well as questions about the export company and the character of the project.
Thus Austrian exporters can benefit from Austrian soft loans only if they can verify to have the relevant know-how in Austria to realise the project they apply for. In the case of pure/predominant services according to the Austrian soft loan policy the questionnaire also includes a clear description of possible soft loan eligible services.
In addition to requirements on the Austrian exporter's credit rating and performance risk, the application procedure more intensively considers the exporter's ratio between business financed on commercial terms and business financed on soft loan terms.