International opportunities for Swiss SMEs
Carsten Böhler and his team are experts in complex project financing and gaining access to international large projects. In the interview below, he explains how SERV matches international general contractors with Swiss SMEs and where the challenges lie.
Mr Böhler, you lead the “Project Financing and Infrastructure” team at SERV. What does that mean?
We structure, insure and advise on complex infrastructure projects abroad.
Is SERV insurance subject to any conditions?
Yes, it is. SERV has a mandate to safeguard and create jobs in Switzerland. That means the share of Swiss content in the order value must be at least 20 per cent.
Which large projects do you focus on?
We are especially interested in the field of infrastructure and in those sectors where the Swiss export industry is suitably strong, for example water treatment or the mobility and rail transport sector. Buyers usually commission general contractors for such projects, known as EPCs (“engineering, procurement and construction”).
Do Swiss general contractors (EPCs) carry out the projects?
Unfortunately there are hardly any EPCs in Switzerland that complete infrastructure projects abroad. For SERV to insure a project outside Switzerland, the EPC or a branch of the company must be based in Switzerland. We have in the past managed to convince some international EPCs to establish a base here through our offering.
Why would an EPC set up a subsidiary in expensive Switzerland?
Actually, for financial reasons. To bid successfully for a project, the EPC company usually has to offer the buyer attractive financing. SERV insurance allows them to do that. SERV has an AAA credit rating in Switzerland. That means the creditor rates SERV as minimal risk.
How does that work in practice?
If the bank gives the buyer a loan, it normally checks the buyer’s creditworthiness. SERV can insure the loan, meaning the risk is transferred to SERV. The buyer then receives improved financing costs through our AAA credit rating.
And how does a Swiss SME access an international project?
On the one hand, the Swiss market offers attractive products for EPCs. In addition, Switzerland has an excellent reputation for completing projects on time and within budget. We also work with Swiss associations to help EPCs find the right companies for their projects and bring them into contact with each other. That is where our Pathfinding Strategy comes in: improving access to international large projects for Swiss SMEs.
So this constellation is a safe bet for the Swiss exporter?
Absolutely. SERV carries out a due diligence check on the project and the EPC, where we review, among other things, credit risks and compliance with international standards. And we work with international banks, which have reviewed the feasibility and implementation of the project.
What tip would you give exporters looking to enter new markets?
Be receptive to project requests and new markets with international EPCs. Don’t cut yourselves off from international projects due to uncertainty or not being aware. There are partners ready to work with you. When an opportunity comes, grab it.
