Export Development Canada
Presentation to Senate Committee on Foreign Affairs
February 17th, 2004
2
Export Development Canada
EDC is Export Development Canada (Exportation et développement Canada) Canada’s official export credit agency.
EDC helps Canadian firms complete international
sales, foreign buyers to purchase Canadian goods and Canadian firms to invest with confidence
Founded in 1944, EDC is a Crown corporation that operates as a commercial financial institution.
EDC - Facilitating Canadian Trade
3
Export Development Canada
EDC’s Services
Risk management services• Export credits insurance• Political risk insurance• Performance security insurance and guarantees
Financing Services• Direct buyer loans• Lines of credit• Note purchase agreements• Guarantees• Leasing arrangements• Structured finance solutions
Export Development Canada
EDC Credit Insurance
Claim Payment90%
CanadianExporter
Mexican Buyer
Claim
EDCRecourse
Commercial and political risks coveredCommercial and political risks covered Increases export opportunitiesIncreases export opportunities Enhances competitivenessEnhances competitiveness Increases working capitalIncreases working capital Access to EDC world-wide credit networksAccess to EDC world-wide credit networks
CREDIT INSURANCECREDIT INSURANCE
Example of Credit Insurance
Buyer non-payment, insolvency, Buyer contract cancellation,
or political risk event
Export Development Canada
Example of Financing
Mexican Buyer
Canadian Exporter
EDC
Loan Agreement
goods &services
Direct Disbursementto Exporters
FINANCINGFINANCINGTo offer buyers a complete sales packageTo offer buyers a complete sales package To meet foreign competitionTo meet foreign competition To provide a cash sale for Exporter and To provide a cash sale for Exporter and
Repayment terms for buyerRepayment terms for buyer
6
Export Development Canada
9
3
102
15
2
16
4
21
5
24
7
30
6
33
8
36
8
44.2
7.4
46
5.9
048
12162024283236404448
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Insurance Financing
• Billions of Canadian Dollars
EDC Business Volume
Export Development Canada
EDC Regional OfficesIn Canada:- Vancouver- Winnipeg- Calgary- Toronto- London- Montreal- Quebec- Halifax- Moncton- St. John’sInternational Representations:BrazilChina
MexicoPoland
Centres of
Expertise
EconomicsLegal
Project FinanceTechnical
Int’l MarketsEquity
EDC’s Sector Teams
Machinery , Equipment &
Advanced Technologies
Aerospace
Surface Transportation
Energy
Mining, Infrastructure
Development & Services
Forestry
Agri-Food
Consumer Goods
Base & Semi
LargeExport sales > $1 million
SmallExport sales < $1 million
Emerging Exporters Team
Financial Institutions
Telecom
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Export Development Canada
EDC and Mexico
Mexico is a priority market for Canada and EDC.
Recognizing the opportunities to build on its business in Mexico, EDC established direct representation in Mexico City in April of 2000, and a second representation in Monterrey in October of 2002.
Mexico is the most important market in Latin America for EDC. In 2003 alone, EDC support totalled over $C 2.4 billion.
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Export Development Canada
EDC Business Volume in Mexico
0
0.5
1
1.5
2
2.5
3
1998 1999 2000 2001 2002 2003
Financing Contract Insurance & Bonding
Political Risk Insurance Short Term Insurance
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Export Development Canada
Consumer Goods 2.49%
Base and Semi-Manufactured
5.73%
Agri-Food4.31%
Other0.92%
Advanced Tech. & Machinery and
Equip.4.91%Surface
Transportation11.83%
Forestry5.35%
Telecom9.13%
Energy 55.33%
MexicoEDC Business Volume by Sector
2003
11
Export Development Canada
218
271
341349
393404 413
0
50
100
150
200
250
300
350
400
450
1997 1998 1999 2000 2001 2002 2003
EDC Support for Canadian Exporters in Mexico
# of firms supported
In 2003 over 65% of our clients were small and medium sized Exporters.
12
Export Development Canada
61294
2525 1 30
30 664
45
75
Agri-Food AF Aerospace AS
Base and Semi-Manufactured BS Consumer Goods CG
Emerging Exporters EE Energy EN
Financial Institutions FI Forestry FO
Surface Transportation SF Advanced Tech. & Machinery and Equip. ATM
Mining&Infrastructure Dev.&Services MIDAS Telecommunication TE
MexicoNumber of Exporters by Sector
2003
13
Export Development Canada
Priority Sectors for EDC in Mexico
Power
Oil and Gas
Industrial Equip.
Automotive
Telecom
Agri-Food
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Export Development Canada
EDC's Relationships in Mexico
EDC’s success in Mexico is built on its extensiverelationships with key Mexican buyers, borrowers,government agencies, financial institutions andintermediaries.
Banks (private/public sector)
Industrial conglomerates
Private sector companies
Public sector agencies and departments
Trade Associations and other intermediaries
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Export Development Canada
EDC Credit Facilities in Mexico
Scotiabank Inverlat(through EDC-Scotiabank facility in Canada, US20 million)
Banamex, US$100 million (MOU)
BBVA Bancomer, US$75 million
Bancomext, US$75 million (MOU)
Banco Inbursa, US$50 million (MOU)
NAFIN, US$30 million
BANORTE, US$20 million (MOU)
Banobras, US$20 million
Pemex, US$50 million
US$200 million
US$200 million
CFE, US$50 million
Telmex, US$400 million
América Móvil, US$250 million(for subsidiaries in Latin America)
Grupo IMSA, US$50 million
MOU : Memorandum of Understanding
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Export Development Canada
Other important EDC Relationships
CEMEX MABE
NEMAK TFM
FEMSA EMPAQUES NAVISTAR
FEMSA COCA COLA INNOPACK
GALVAK METALSA
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Export Development Canada
EDC’s Structured Finance Solutions
Transalta Campeche S.A. de C.V.
Mexico
US$ 122,000,000
(EDC support included Political risk
insurance and Financing)
Gas fired power plant
Joint Lead Arranger
Mexico is becoming one of the more active markets for EDC in terms of structured finance transactions, particularly in the power and telecom sectors.
Examples of recent signings in project finance.
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Export Development Canada
EDC Market Representation in Mexico
Presence established in Mexico City in April 2000 and in Monterrey in October 2002 reflect importance of Mexican market.
EDC’s on the ground representation works in close collaboration with Canadian Embassy in Mexico City and Consulates in Guadalajara and Monterrey.
Support to EDC and Canadian Exporters through :
Relationship buildingTransaction supportMarket intelligence
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Export Development Canada
EDC Market Representation in Mexico
Mexican buyers, borrowers, and project sponsors as well as Canadian firms with an interest in EDC are invited to contact:
Douglas FortneyRegional Manager, EDC
(52-55) 5387-9316Fax. (52-55) 5387-9317
Miguel GonzálezEDC Assistant
(52-55) 5387-9318Fax. (52-55) 5387-9317
The Canadian Embassy in MexicoSchiller St., No. 529, Polanco,
11560 Mexico, D.F.
Noé ElizondoRegional Manager, EDC
(52-81) 8344-3200 ext. 3360Fax: (52-81) 8340-7703
Canadian ConsulateEdificio Kalos 108-AZaragoza 1300 Sur
Monterrey, N.L. México 64000