Ever since private enterprise was opened in Russia some 14 years ago, the Export-Import Bank has been actively engaged in providing financing opportunities to the new U.S.-Russia business initiatives.

Current upward trends in the Russian economy lead the U.S. Export-Import Bank to discover more financing prospects in Russia. Viewing Russia as economically strategic for U.S. business interests, the Export-Import Bank believes that small and mid-size U.S. companies can substantially benefit from working with Russia. Over the years, the Bank has added such commercial sectors as aviation, health care, and mining to its catalog of commercial support to Russian-American companies. Although somewhat reduced during the financial crisis of 1998, the Bank’s activity in Russia has been on the rise for the past several years with annual authorizations averaging to USD 150 million.

Presently, there are five major categories into which the U.S. Export-Import Bank’s assistance to Russian-American ventures may fall. The list of current programs includes transportation finance, oil and gas sector support, the U.S.-Russia Commercial Energy Dialogue, sub-sovereign aid, and leasing opportunities.

Transportation financing offered by the U.S. Export-Import Bank pertains to exports of American-made aircrafts. The Bank’s support to foreign buyers is governed by the OECD Sector Understanding on Export Credits for Civil Aircrafts. International transactions involving U.S.-manufactured railroad equipment may also be financed under the transportation program of the Export-Import Bank.    

The second program the Export-Import Bank offers, the OGF Agreement [Oil and Gas Framework Agreement], provides assistance to foreign buyers of oil and gas products and services. Signed in 1993 by Russia’s Ministry of Finance, Ministry of Fuel and Energy, and the Central Bank, the OGFA program has generated more that USD 1 billion worth of exports to Russia’s energy companies. Under the auspices of the program, it is also possible to facilitate financing help to foreign buyers of crude or refined products to offshore buyers located outside Russia. For these cases, all sales contracts must be signed directly by the Export-Import Bank to secure the loan.

Another avenue that the Export-Import Bank provides for making Russian-American business relations easier is the U.S.-Russia Commercial Energy Dialogue. During the September 2002 U.S.-Russia Commercial Energy Summit in Houston, the Export-Import Bank signed Memoranda of Understanding with two private Russian oil corporations, LukOil and Sibneft, granting about USD 100 million in medium and long-term financing to the two companies. After the original MOU, financing opportunities have been expanded to  other Russian energy sector companies.

The U.S. Export-Import Bank also offers interested Russian companies to lease U.S. equipment via the recently-initiated Europlan facility. Leased equipment may be utilized for various purposes, from expanding production lines to improving existing products.         

The final category of the Export-Import Bank’s programs is sub-sovereign assistance. The Bank is able to furnish financing support to creditworthy regional and local governments that intend to purchase American goods.  

Three types of support to U.S.-Russia business ventures can be provided by the U.S. Export-Import Bank. First of all, the Bank can offer insurance to exporters for minimizing risks that may arise as a result of a political event. Secondly, the Bank can issue low-interest direct loans to foreign purchasers. Lastly, the Export-Import Bank can provide guarantees for transactions where a third-party lender finances U.S. exporter’s foreign customers. Repayment risk for the lender is greatly reduced in that situation.