Interview

For soft loans in the top field

Issue 77 - September | October 2018

OeKB Board Member Helmut Bernkopf on the business with tied financial loans in Austria.

Helmut Bernkopf,
Board member OeKB
How is the soft loan business developing?

Bern Head: The demand is still high. With 2017 projects in 29, we achieved another increase of EUR 214 million compared to previous years. We continue to do most of our business in Asia, with Indonesia, Vietnam and the Philippines at the top. The direction is essentially set by the exporters who convince with their products.

For which exporters are soft loans interesting?

Bern Head: Austrian companies with soft loan-enabled products come from the fields of health, education and water supply, but are also well represented in civil protection and infrastructure, plus some energy, e-government and culture. Currently we have soft loans for almost a hundred exporters.

What do you advise companies that are interested in soft loan financing?

Bern Head: We recommend that you contact us as soon as possible. There are many conditions and peculiarities that affect the recipient country, the project, but also the exporter itself. If we are involved in advance, projects can be adapted to meet the criteria for approval.

What risks arise from soft loans for the Republic of Austria?

Bern Head: In the last twenty years, there have been no losses in soft loan projects. This is also because we demand the best security in soft loans, namely a state guarantee of the buyer country. In addition, the interested country and the buyer agree to up to three-stage monitoring, depending on the size of the project. In addition, BMF and OeKB also inform themselves about the projects on site.

What is Austria's position on soft loans in international comparison?

Bern Head: If we look at the number of soft loan projects funded in the period from 1995 to 2015, Austria is ranked 540 behind Spain with 2 projects. In terms of volume, Austria is one of the largest donors in Europe in terms of volume. However, Japan and South Korea are unsurpassed worldwide.

There is also competition for soft loan financing. Where are the challenges for Austria?

Bern Head: Recipient countries usually make specific demands on credit conditions, want very high project volumes or work in part only with certain donors. India, for example, focuses entirely on the G7 countries. However, we also see that recipient countries deliberately opt for Austrian suppliers because they attach great importance to quality and longevity.

Vielen Dank für das Gespräch!

Photo: OeKB / PAGE SEVEN

To the main story

The Adomi Bridge, Ghana's largest road bridge, was built in the 1950 years by British companies and had to be refurbished. For this organizational, logistical and technically challenging task, the Road Administration of Ghana turned to the Austrian steel construction expert MCE.

Favorable conditions

The soft loan is a sought-after financing solution for projects in developing countries and is designed to kill two birds with one stone: export promotion and development.