SERV has been recognised by two international export financing platforms this year for a special deal in Turkey. It received the “Environmental Enhancement ECA-backed Deal of the Year” award from TXF and was featured in the “Best Deal of the Year” category by Global Trade Review. The deal was for the construction of Europe’s largest energy-from-waste plant that will convert up to 1 million tonnes of waste per year into around 70 MW of electrical energy for feeding into the grid.
The deal was initially covered by supplier credit insurance alone. However, due to the increasing turbulence in Turkey, it became apparent how important the involvement of an ECA would be for all parties. Long-term financing was a key requirement for the Turkish buyer. SERV is therefore insuring the deliveries from Hitachi Zosen Inova in Switzerland with long-term buyer credit insurance, thereby helping to improve liquidity for both the exporter and the buyer.
One of the many special provisions of the deal was that the export contract be concluded in Turkish lira with a price escalation clause and combined with a euro-denominated loan. When calculating the loan, predictions had to be made about inflation in Turkey and the lira-euro exchange rate.
This deal is very important to the Turkish buyer as it is likely to be the first of several such plants to be built in Turkey. For the exporter, the project opens the door to possible follow-up projects in the region. BNP Paribas and AIL Structured Finance were also instrumental in the successful completion of the deal.