EPC contractors are often dependent on financing from reliable partners to successfully carry out large infrastructure projects. Swiss Export Risk Insurance SERV gives EPC contractors access to attractive ECA-covered financing through its ECA pathfinding approach. This also enables Swiss exporters to benefit from such infrastructure projects.
Until a few years ago, SERV generally only got involved in large infrastructure projects at the end of the project structuring process. Since then, SERV has been incorporated into projects at ever earlier stages. This means that not only can it support Swiss companies with its insurance projects, it can also assist them with its expertise and in the structuring of transactions.
“SERV has moved away from its role as an insurer of last resort and is increasingly becoming a trade facilitator” explains CEO Peter Gisler.
Entirely in keeping with this approach, proactive participation in large infrastructure projects is high on SERV’s agenda and is also the reason why SERV has launched its ECA pathfinding approach. EPC contractors (EPCs) and Swiss exporters benefit from this.
As an active member of the international export financing community, SERV brings EPCs and Swiss companies together. It is open to all regions, taking into account the principles of Swiss foreign policy. Depending on the needs of the EPC, it finds suitable suppliers in various formats ranging from bilateral negotiations to public matchmaking events. In addition, SERV’s specialists are well connected in the Swiss exporting world and work closely with the other players in the Swiss export industry. In the infrastructure sector, its strengths include power generation, railway technology, tunnel construction, waste management and water treatment, to name just a few.
Carsten Böhler, Head of Acquisition at SERV, explains:
“Switzerland has a large number of strong suppliers in various infrastructure sectors and has recently also demonstrated that it can complete large infrastructure projects, such as the Gotthard base tunnel, on time and to a high standard.”
The issue of financing
Financing is an essential prerequisite for any infrastructure project, but it is often more difficult to obtain financing on attractive terms in markets outside the high-income countries. This is where SERV steps in. SERV operates on the basis of subsidiarity, ensuring transactions that are not assumed by the private market. It also benefits from Switzerland’s AAA rating, thanks to which creditors categorise SERV’s risk as minimal. An insurance policy from SERV, therefore, allows buyers abroad to access extremely attractive interest rates, even for long credit periods.
If an EPC wishes to establish itself in Switzerland, SERV – unlike other ECAs – recognises the company as a Swiss company from day one. The only requirement for this is an appropriate amount of Swiss content.
SERV cover is generally based on buyer credit insurance, although SERV also insures project financing. A team of specialists dedicated to large projects and project financing elaborates tailored solutions. This is always done in close collaboration with the parties involved, such as the financing bank, DFIs or other ECAs with which SERV maintains good relationships.
SERV’s flexibility and innovativeness can be demonstrated through the example of the Sergipe project in Brazil for the construction of a gas-fired combined-cycle power plant with a contract value of around CHF 1 billion. This was the first time that an ECA issued comprehensive insurance for a project bond of this size and in local currency. SERV received several awards for its innovative approach to this project.