Manual Finexpo - Belgium

FEDERAL PUBLIC SERVICE OF FOREIGN AFFAIRS
FEDERAL PUBLIC SERVICE OF FINANCE
ONDD, THE BELGIAN EXPORT CREDIT AGENCY
Brussels, January 2012
1

This manual sets out the rules and criteria according to which Finexpo functions in its day-today-business.
The objective of this text is to create the transparency necessary to give all
exporters an equal chance in obtaining Finexpo support. The Finexpo manual is also intended as
a tool for policy makers and for exporters with experience in the field of (un)tied aid and
interest stabilization.
Visit this website for a first acquaintance with Finexpo:
http://diplomatie.belgium.be/en/policy/economic_diplomacy/finexpo/more_info
Remarks regarding this manual or questions that remain unanswered can be sent at all times to
finexpo@diplobel.fed.be
The Finexpo Secretariat
(Contact information: page 14)
Awex…………………………………..Agence Wallonne { l’Exportation et aux Investissements étrangers
BTC……………………………………………………………………………………………Belgian Technical Cooperation
CIRR……………………………………….…………………………………………Commercial Interest Reference Rate
DAC...……………………………………………………………Development Assistance Committee (at the OECD)
DDR………………………………………………………………………………………………Differentiated Discount Rate
DGD….…………………Directorate General Development Cooperation (a Belgian Federal Institution)
FIT……………………………………………………………………………...……..……..Flanders Investment and Trade
FPS…………………………………………………………………………………………………………Federal Public Service
GDP……………………………………………………………………………………………………..Gross Domestic Product
HIPC………………………………….………………………………………………………Heavily Indebted Poor Country
http://www.imf.org/external/np/exr/facts/hipc.htm
IMF………………………………………………………………………………………………International Monetary Fund
KOF…………………..…………………………………………………….Swiss Institute for Business Cycle Research
LDC……………………………………………………………………………………………………Least Developed Country
http://www.unohrlls.org/en/ldc/related/62/
OECD………………………………….……………Organisation for Economic Cooperation and Development
ONDD……….Office National du Ducroire/Nationale Delcrederedienst (the Belgian Export Agency)
SME…………………...…………………………………………………………………….…Small and Medium Enterprise
SSL………………………………………………………………………………………………………………State to State Loan
UN……………………………………………………………………………………..………………………………United Nations
WTO………………………………………………………………………………………………..World Trade Organization
2

Finexpo General Framework
1 Finexpo Mission Statement ................................................................................................................. 4
2 General presentation ............................................................................................................................. 4
3 Tied aid program .................................................................................................................................... 5
4 Untied aid program ................................................................................................................................ 5
5 Stakeholders and values ...................................................................................................................... 5
6 Ambitions ................................................................................................................................................... 6
Finexpo Concessional Program
1 Tied aid program .................................................................................................................................... 7
2 Untied aid program ............................................................................................................................. 10
Finexpo Commercial Program
1 Interest Stabilization .......................................................................................................................... 12
Finexpo Procedures: from application to follow-up
1 Composition of Finexpo and the role of its members ............................................................ 14
2 Procedural track for tied State to State Loans and Interest Bonifications .................... 15
3 Flow chart of the pre-feasibility study ........................................................................................ 17
4 Monitoring and reporting ................................................................................................................. 18
5 Calculation of the Belgian Interest ................................................................................................ 19
3

Finexpo General Framework
1 Finexpo Mission Statement
The Missions of Finexpo are:
- to contribute to the development of an international regulatory framework for export
support;
- to support the exports of Belgian capital goods and related services to developing
countries, taking into account these countries’ development needs and the need for
economic, environmental and social sustainability, within the international regulatory
framework.
2 General presentation
Finexpo is an inter-ministerial advisory committee managed by the Directorate financial support
to exports (B2) within the Federal Public Service Foreign Affairs, Foreign Trade and
Development Cooperation and by the Administration for International and European Financial
Affairs of the Federal Public Service for Finance. Its name combines two key words: financing
and export. The objective of Finexpo is to support the export of Belgian capital goods and related
services.
As the Belgian economy is a very open economy, it is number one in the KOF Economic Institute
Ranking of Most Globalized Countries. Belgian exports amount for 80 percent of the GDP and
create half of the country’s economic growth 1 . This economic openness made Belgium a strong
proponent of free trade and of the creation of a level playing field for exporters. The WTO, World
Bank and the OECD all contribute to these policy objectives and authorize export support only
under the form of tied or untied aid to developing countries. Finexpo operates under this
restricted framework set up by the aforementioned international organizations. Consequently,
Finexpo’s scope of action is rather limited. In terms of share in total Belgian exports, eligible
African countries amount for 2.1%, Latin-America for 0.3% and Asia for 5.6%. 2 Combined with
the fact that only 8% of Belgian exports are capital goods and the Belgian economy is essentially
structured around SMEs and subcontractors, it is crucial that Finexpo fully takes advantage of
the limited opportunities offered.
Export is essential for the Belgian economy, especially the industrial sector, which is under
pressure due to increasing competition in international markets. It is Finexpo’s responsibility to
offer Belgian exporters the proper financial instruments. Exporters can apply for State to State
Loans, Upfront Grants, Interest Bonifications and Interest Stabilizations.
In addition to this, Finexpo supports Least Developed Countries (LDCs) and Heavily Indebted
Poor Countries (HIPCs) by providing State to State loans in the field of untied aid.
Regardless of the fact that the project falls under the tied or untied aid program, Finexpo
support is conditional upon the needs and interests of the host country. The project should fulfill
rational economic, social and environmental needs of the host country and should significantly
contribute to its economic and social development. The financial terms and conditions of the
1
The World Bank (http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS)
2
Statistics from the National Bank of Belgium, 2010, communautarian method.Contrary to the Belgian intra-EU trade balance which
has a 20 billion EUR surplus, our extra-EU trade balance shows a 10 billion EUR deficit Belgian exports to non-EU countries amount
to merely 26.8% of total Belgian exports of which 15% to non-OECD countries [Source: External and intra-EU trade - statistical
yearbook, 2010]
4

Finexpo instruments are such that the support contains a concessional element of 35 or 50
percent of the whole contract value. Complementary to this type of export support are the
export policies of the regional export agencies, which focus mainly on the support of smaller,
preparatory actions preceding the actual project. At the same time, the regional export agencies
are members of the Finexpo committee, which ensures close cooperation and sharing of
expertise and experiences. ONDD, which is also a member of the Finexpo committee, is the
Belgian export credit agency that acts as public insurer for the commercial aspects of the
Finexpo financing packages.
3 Tied aid program
Tied aid is the main field in which Finexpo is active. Eligible projects need to (1) be of high
quality,(2) have a considerable Belgian economic interest and (3) show a clear socio-economic
and development relevance for the host country.
Finexpo’s tied aid program does not pursue a sectoral policy. However, for development reasons
Finexpo only supports projects that are not commercially viable 3 and concern capital goods and
related services. Furthermore, Finexpo is fully compliant with the OECD Arrangement on
Officially Supported Export Credits and respects the minimum concessionality levels and list of
eligible host countries which are listed in it. Also, the OECD Recommendations on the
Environment, Sustainable Lending and Bribery and Corruption are strictly applied.
4 Untied aid program
Finexpo also has an untied aid program for projects with an international tender. Potentially,
projects in poor developing countries worldwide qualify for this Finexpo-program. In order to
build in a focus and thus reduce potential applicants to a manageable number, a sectoral
approach was adopted. Projects in one of the following sectors qualify for this program: rural
electrification, public transport, water, health, education & government and research &
development. Eligible host countries are LDCs (UN) or HIPCs (IMF/Worldbank) for which the
Belgian federal government has the experience and capacity to guarantee the follow-up and
control.
5 Stakeholders and values
Three groups of stakeholders can be identified.
The first group of stakeholders are exporters of capital goods and related services that are
located in Belgium (tied aid program) and abroad (untied aid program) along with their
respective banks. Finexpo expects high standards regarding the quality of their projects, and
demands yearly monitoring reports during the implementation of the project and reporting
afterwards (cf. page 18). In return Finexpo commits itself to advise and assist the applicants
during the application procedure and to complete the procedural track within the indicative
time limits set out on page 15 and 16 of this manual.
The developing countries that host the projects are a second group of stakeholders. It is
Finexpo’s responsibility to watch over the development relevance of the project, and to make a
correct a priori assessment of the project’s contribution to the economic and social development
of the host country.
3
According to the ex-ante guidance
(http://www.oecd.org/officialdocuments/displaydocumentpdf?cote=td/pg(2005)20&doclanguage=en
5

A third group of stakeholders are the regional export agencies and the industry federations for
which Finexpo functions as a pivot that delivers information from the international policy and
business level. Several Finexpo members participate in different OECD meetings and negotiate
policy guidelines regarding export issues and topics related to development cooperation.
Through the OECD notification and reporting system, Finexpo has access to information on the
individual export transactions of other member states. This information can be useful for the
regions, the industry federations and the exporters. Finexpo also informs them on new
guidelines or agreements that the OECD has adopted. Finexpo is fully compliant with the policies
of the OECD and WTO, and also aligns itself with the sustainable lending practices of the IMF and
the World Bank.
6 Ambitions
Finexpo wants to open international markets for Belgian producers, especially SMEs, and give
them the opportunity to build international references and continue from there on their own
power. This multiplier effect is often very difficult to measure exactly and success is never
guaranteed, but it remains Finexpo’s pre-eminent ambition, since it conciliates Belgium’s
fondness of free trade with the necessity of keeping its exporters competitive.
While doing so, Finexpo wants to contribute and promote the Belgian industrial image and
reputation abroad, as well as to contribute to the economic and social development of the
recipient country.
6

Finexpo Concessional Program
1 Tied aid program
Description
The tied aid program of Finexpo means that Finexpo issues or supports export credits with ‘soft
conditions’ on the conditions that Belgian exporters are involved. Tied aid can be given through
three instruments:
1) Upfront Grant
2) Interest Bonifications (if desired with additional upfront grant)
3) State to State Loans (SSL)
The first instrument is largely self-explanatory and is an upfront grant of 35% of the credit
amount. The last two instruments are so called ‘soft loans’ that result in a concessionality level of
35% (or 50% for the LDCs).
The concessionality level means that public buyers in developing countries do not have to repay
the full loan amount at market conditions, but that Finexpo provides the buyer with longer
repayment terms, reduced interest rates and/or an upfront grant. These soft conditions change
every year since Finexpo has to calculate the concessionality level of its loans according to a
reference rate determined by the OECD, the so-called Differentiated Discount Rate (DDR).
Upfront grant is a grant of 35% of the credit amount given directly to the exporter at the
starting point of credit. It results directly in a concessionality level of 35% and is only used for
small projects. If an upfront grant is combined with an Interest Bonification (cf. infra) the grant
is lower than 35% of the credit amount. Nevertheless, the overall concessionality (i.e. the
combined concessionality of the upfront grant and interest bonification) has to add up to 35%.
Interest Bonifications are loans issued by a private bank for which the FPS Foreign Affairs:
- reduces the interest rate up to 0%: depending on the level of the DDR and the funding
costs of the private bank involved;
- extends the repayment term to 10 to 15 years, also depending on the level of the DDR and
the funding costs of the banks;
- adds an additional upfront grant (cf. supra) in order to modulate the repayment term and
make it less long if that would be desirable.
State to State Loans (SSL) are loans provided by the Belgian FPS Finance to the Ministry of
Finance in the host country and have:
- a 0% or 2% interest rate: depending on the World Bank status of the host country and the
level of the DDR;
- repayment terms of 20 years preceded by a 10 year grace period during which the buyer
does not have to make any repayments.
The SSL is combined with a commercial credit issued by a private bank. The ratio between the
SSL and commercial credit depends on the level of the DDR so that the concessionality level
becomes 35% (or 50% for LDCs).
Preconditions
The tied aid program of Finexpo functions within a strict national and international legal
framework:
- the annual budgetary limits as laid down in the royal decree of 30 May 1997;
- the OECD Arrangement on Officially Supported Export Credits;
- the Agreement on Subsidies and Countervailing Measures by the WTO.
7

In order to guarantee a multiplying effect of Finexpo support and in order to give a sufficient
number of companies the opportunity to apply, contract amounts cannot exceed 20 million EUR
for State-to-State loans or 15 million EUR for Interest Bonifications. These maximum amounts
are necessary because the budgets for SSL and Bonifications:
- have to respect strictly the annuity principle of the federal budget, i.e. the budgetary
impact of a project has to be attributed to one fiscal year only and cannot be spread over
2 or more fiscal years. Also, other budget rules on financial engagements and executions,
approval by the council of ministers etc. have to be followed strictly (cf. also chapter VIII
flow chart);
- are limited to respectively 60 million EUR and 37 million EUR (commitment appropriations of
2011).
Combinations of SSL and Bonifications or exceptions on the maximum contract amount can be
made for projects with an exceptional Belgian (strategic) interest or when state of the art
Belgian research and development is involved in the project. This flexibility is necessary in order
for Finexpo to optimally and fully exploit its limited budget that is already subject to numerous
national and international constraints.
Assessment criteria of the applications for the ti ed aid program
Exporters can apply for SSL, Bonifications and upfront grants by filling out the Finexpo-ONDD
questionnaire (on both organization’s websites). The applications will be assessed according to
the criteria set out below.
Criterion Sub-Criteria Responsible party
Quality of the
Project
The necessary information has to be filled out in
the Finexpo-ONDD questionnaire. [minimum
prerequisite]
Pre-feasibility study (cf. page 17 of this manual: i.a.
World Bank and embassy advice);
Environmental study in accordance with the OECD
Recommendation on the OECD Recommendation
on Common Approaches on Environment and
Officially Supported Export Credits.
Applicants (exporter
and bank)
Verification by the
Finexpo secretariat
Shared responsibility
of the Exporter and
the Finexpo
Secretariat
Exporter
Commercial
non-viability
Belgian interest
Verification if the applicant’s project comes under
one or more accepted sectors by the OECD (rural
electrification, water sanitation projects, public
transport, education, public administration and
core tasks of central or local governments)
If the applicant’s project cannot by categorized in
one of the sectors accepted by the OECD, and
consequently the commercial non-viability is not
unequivocal, a cash flow study has to be carried
out, compliant with OECD ex-ante guidance on tied
aid. (i.a. a negative cash flow during the first 10
years during which the project is in operation is
required.)
Calculation of the total Belgian content of the
project with a minimum threshold of 50%.
8
Finexpo Secretariat
Exporter
Exporter

However, also other elements can play a role in the
assessment of the Belgian content: cf. page 19 for
the complete methodology.
Development
relevance
Eligible
countries
Verification of the calculation of the Belgian
content and verification that the applying company
or the entity through which it applies, is located in
Belgium.
World Bank and or Regional Development Bank’s
advice
Pre-feasibility study
Advice embassy and/or local representative of the
Directorate General Development Cooperation
(DGD).
Verification of the compliance with the countries
eligible for tied aid as determined by the OECD
Secretariat on the Arrangement on Officially
supported Export Credits.
http://www.oecd.org/dataoecd/2/57/40817749.pdf
FPS Economy
Finexpo Secretariat
Shared responsibility
of the Exporter and
the Finexpo
Secretariat
Finexpo Secretariat
Finexpo Secretariat
9

2 Untied aid program
Description
Contrary to the tied aid program, the untied aid program of Finexpo does not require Belgian
exporters to be involved. Untied aid is given through State to State Loans (SSL), which are
loans from the Belgian FPS Finance to the Ministry of Finance in the buyer country and have:
- a 0% or 2% interest rate;
- repayment terms of 30 years, of which 10 years grace period during which the buyer does
not have to make any repayments.
Preconditions
The untied aid program of Finexpo functions within a strict national and international legal
framework:
- the annual budgetary limits as laid down in the royal decree of 30 May 1997;
- the Guidelines of the Development Assistance Committee (DAC), the OECD Arrangement
and the Helsinki Principles on Aid.
Given the fact that the approval of untied aid is not linked to a predetermined exporter, this
support is given under the form of SSL. In order to give a sufficient number of developing
countries the opportunity to apply, contract amounts cannot exceed 10 million EUR. Contrary to
the tied SSL, untied SSL are often not mixed with a commercial credit and therefore have a more
significant impact on the SSL budget. Therefore the maximum contract amount is proportionally
reduced to 10 million EUR or 1/6 th of the yearly budget for SSL.
Assessment criteria of the untied aid program
Government administrations and agencies of developing countries can apply for untied SSL by
filling out the untied aid questionnaire on Finexpo’s website. The applications will be assessed
according to the criteria set out below.
Criterion Sub-Criteria Responsible party
Quality of the
Project
The necessary information has to be filled out in
the Finexpo questionnaire for untied aid.
[minimum prerequisite]
Recipient Country
Development
relevance
Sector
Pre-feasibility study (cf. page 17 of this manual: i.a.
World Bank and embassy advice);
Environmental study in accordance with the OECD
Recommendation on the OECD Recommendation
on Common Approaches on Environment and
Officially Supported Export Credits.
Should be undisputable
World Bank and or Regional Development Banks’s
advice
Advice embassy and/or local representative of the
Directorate General Development Cooperation
(DGD).
Pre-feasibility study checked by BTC or another
consultant with appropriate expertise
Rural electrification, public transport, water,
health, education & government and research and
10
Shared responsibility
of the recipient
country and the
Finexpo Secretariat
Recipient country
Finexpo Secretariat
Finexpo Secretariat
Finexpo Secretariat
Finexpo Secretariat
Finexpo Secretariat

Eligible host
countries
development
Least Developed Countries (UN) or Highly
Indebted Poor Countries (IMF/World Bank) for
which Belgium has the experience and capacity to
guarantee the follow-up and control.
Finexpo Secretariat
Implementation and follow-up
Once the untied SSL is granted to the recipient country, the organization of a public tender is
mandatory. This tender will be prepared by the recipient country in close collaboration with the
Finexpo Secretariat.
On behalf of the Finexpo Secretariat, the BTC or another consultant with appropriate expertise,
observes and monitors the tender procedure and verifies the conformity of the proceedings with
the tender rules in force:
- the analyses of the specification book
- guidance during the opening of the procedure
- analysis of the incoming offers
- awarding the contract
BTC or the other consultant with appropriate expertise is not actively involved in the decision
making process of the tender and continuously reports its findings back to the FPS Finance.
11

Commercial Program
1 Interest Stabilization
Description
The Stabilization program of Finexpo fixes the interest rate (CIRR) of export credits that Belgian
exporters offer to their clients.
Finexpo compensates the exporter’s bank if CIRR < euribor + fixed margin.
The exporter’s bank has to compensate Finexpo if CIRR > euribor + fixed margin
Every year, the fixed margin is reviewed by the Finexpo secretariat and is based on an analysis
of the real funding costs incurred by the private banks.
Preconditions
All Finexpo decisions are made while honoring the OECD Arrangement on Officially Supported
Export Credits.
Assessment criteria of the interest stabilization program
Exporters can apply for interest stabilization by filling out the application form on Finexpo’s or
ONDD’s website. The applications will be assessed according to the criteria set out below.
All of the following criteria are to be met:
1) Clear Belgian content or interest:
- Calculation made and presented by the Ministry of Economy: a minimum of 30% Belgian
content is required. However, also other elements can play a part in the assessment of the
Belgian content: cf. page 19 for the complete methodology.
- The applying company or the entity via which it applies, is preferably located in Belgium,
but contrary to the tied aid program of Finexpo, this is not a necessary condition for the
interest stabilization.
2) Currencies: priority on the Euro. Also possible: USD, Yen, Swiss Franc and stable OECDcurrencies
for which a CIRR is available.
3) Eligible countries: all.
4) Determination of the CIRR:
A CIRR can be determined in one of the two following ways:
- First method: can be used at any time. The CIRR is fixed on the moment of the signing of the
commercial contract, unless the credit convention is signed more than 6 months after the
commercial contract is signed. In this latter case, the CIRR at the moment of the signing of
the credit convention is used. The date on which the exporter submits his case to Finexpo or
on which Finexpo delivers a positive advice is not relevant for the determination of the CIRR.
Timeline
Signing of the commercial
contract
==> CIRR
Maximum 6 months delay
12
Signing of the
credit convention
==> CIRR

- Second method: can be used by the exporter in case he wants to preserve or hold a CIRR
before the signing of the commercial contract and the credit convention. In this case the
exporter can ask to hold the CIRR at the moment of his application, raised by 20 base
points. This holding period is valid for 4 months during which the commercial contract
has to be signed. If this is not the case, the exporter can submit a new reservation request
to stabilize at the new CIRR + 20 base points.
Once the commercial contract is signed no later than 4 months after a reservation, the
credit convention has to be signed no later than 6 months after the signing of the
commercial contract. If there are more than 6 months between the signing of the
commercial contract and the credit convention, the CIRR (without 20 extra bp.) at the
moment of the signing of the credit convention shall be used (analogous to method 1).
Contrary to method 1, the date of submission of a reservation request has an impact on
the level of the CIRR that will be used. It is entirely the responsibility of the exporter to
manage this timeframe properly.
Timeline
request for
reservation
==> CIRR +
20 bp.
max. 4 max. 6
months Signing of months
delay the
delay
commercial
contract
Signing of
the credit
convention
==> CIRR
13

Finexpo Procedures: from application to follow-up
1 Composition of Finexpo and the role of its members
The Finexpo Secretariat
The Finexpo Secretariat is made up of Representatives of FPS Finance and FPS Foreign Affairs,
and coordinates Finexpo’s daily business. The Secretariat handles the applications for the
Interest Bonifications and Upfront Grants (FPS Foreign Affairs) and the SSL (FPS Finance).
Moreover, it functions as the point of contact for the exporters.
SPF Foreign Affairs Representatives
(Interest Bonifications, Upfront Grants and
Stabilizations)
Danielle Fronville
Advisor General
Danielle.fronville@diplobel.be
+ 32 2 501 83 65
SPF Finance Representatives
(State to State Loans)
Hilda Ackermans
Vice-President
Hilda.ackermans@minfin.fed.be
+ 32 2 574 71 46
Hendrik Jansen
Advisor and Secretary of the Committee
Hendrik.Jansen@diplobel.fed.be
+ 32 2 501 82 53
+ 32 2 501 88 27 (Fax)
Sylvie Graffe
Advisor
Sylvie.Graffe@diplobel.fed.be
+ 32 2 501 83 98
+ 32 2 501 88 27 (Fax)
Eddie Boelens
First Attaché and Secretary of the Committee
Eddie.Boelens@minfin.fed.be
+32 2 574 74 24
Johan Dubois
Attaché
Johan.Dubois@minfin.fed.be
+ 32 2 574 75 14
+ 32 2 579 58 37
The Finexpo Committee
The Finexpo Committee delivers its advice to the minister of Foreign Affairs or to the Council of
Ministers (in case of SSL) on the projects for which a valid application has been filed. The
committee is chaired by the Director-General of Bilateral Affairs (FPS Foreign Affairs) Geert
Muylle. The Committee consists of representatives from federal administrations and regional
agencies. All Finexpo members are expected to participate in the assessment of the submitted
projects. The Committee only delivers a positive advice if a majority of the members can support
it. Below each party’s specific responsibilities are listed.
- FPS Finance:
o Contact point for the State-to-State Loans (SSL);
o Main analysis of the projects via SSL (Quality of the project);
o In contact with the World Bank and IMF (Advice regarding the feasibility and
relevance of the project);
o Examination of the financial liability of the countries concerned.
- FPS Foreign Affairs:
o Contact point for the Bonifications, Upfront Grants and Stabilizations;
o Main analysis of the projects Bonifications, Upfront Grants and Stabilizations
(Quality of the project);
o In contact with the Belgian Embassies worldwide (advice regarding the
feasibility and relevance of the project);
14

o
Examination of the political situation of the countries concerned.
- FPS Economy
o Examines the Belgian interest of the projects (cf. page 19 for the methodology);
- FPS Budget
o Examines and watches over the budgetary impact of the advices.
- Directorate General of Development Cooperation
o Examination of the Development relevance of the projects.
- The federal Export Credit Agency ONDD
o Advice concerning the commercial, economic and political risk of the host
country involved;
o Business plan, strong and weak points of the project in view of potential cover;
o Environmental study.
- Regional Export Agencies (Awex, FIT, Brussels Export):
o Analysis if the projects and instruments of Finexpo are complementary with the
regional export instruments;
o Interaction between the regional and federal support to projects (exchange of
information and expertise, etc.).
2 Procedural track for tied State to State Loans and Interest Bonifications
Introductory meeting between Finexpo Secretariat and the exporter in (i.a. to
check if the project is eligible)
[Week 1]
Exporters fills out the application form (to be found online). The Finexpo
Secretariat or the exporter’s bank are there to assist the exporter in correctly
filling out the form. Finexpo sends a written confirmation when the completed
form is received.
[Timing: depends upon the swiftness with which the exporter provides Finexpo
with the relevant information]
The Finexpo Secretariat makes a first analysis of the dossier:
(i.a. seeks advices from the WB, Embassy, Belgian interest etc.)
[Timing: 2 - 4 weeks]
15

Presentation of the project before the Finexpo committee. Basically the Finexpo
Committee can:
- advice positively (either unconditionally or conditionally upon minor
changes in the project or limited extra information )
- advice negatively
- delay a project if e.g. the committee thinks the project might be
qualified but that too much elements are still unclear.
The applicant will be informed of Finexpo’s decision.
[Timing: one meeting per month]
If Finexpo issues a positive advice the administrative completion can be set in,
according to following steps:
1. Notification at OECD by ONDD (*)
2. The exporter has to obtain a priority letter from the PM or Minister of
Finance from the recipient country (**)
3. FPS Finance prepares a note for the Council of Ministers and submits the
project also to the Inspection of Finance. The inspection can demand
additional studies at all times (e.g. a price study, an analysis of the
development relevance of the project,…) This will be taken care of by and
organized by the SPF Finance. (*) (**)
4. Once the Council of Ministers (**) or the Minister of Foreign Affairs (for all
other programs) has taken a decision, the exporter and the Belgian
Embassy are officially informed of this decision.
5. - Signing of the commercial contract between the contracting parties.
- Signing of the financial convention between the contracting parties for
the interest Bonifications.
- Signing of a loan agreement between the Belgian State and the relevant
counterparty in the recipient country for SSL.
(*) = can be organized at an earlier point in time if the exporter and/or the
Finexpo Secretariat consider it desirable.
(**) Only necessary for SSL, not for interest bonifications
[Timing for SSL: 3 to 4 months]
[Timing for all other applications: 4 to 6 weeks]
16

3 Flow chart of the pre-feasibility study
In the above-mentioned procedures for tied and untied aid, a pre-feasibility study is a
prerequisite. However, a pre-feasibility study is not always sufficient to judge a submitted
project properly. Therefore, the Finexpo Secretariat can always decide to take additional steps in
cooperation with the BTC or another consultant with appropriate expertise before the project is
presented to the Finexpo Committee. The flow chart below is a cascade of steps that can be
undertaken to study a project more in depth. Every step in the flow chart is evaluated by the
Finexpo secretariat, which manages the contacts with the consultant and which decides if
additional study work is needed.
The Finexpo committee can thus issue a well-informed advice, based on the presentation of the
project, including the results of the pre-feasibility study, if necessary extended with a desk
research or a feasibility study.
Pre-feasibility study contains at
least:
- a detailed description of the
project (to be provided by
the exporter.)
- an advice of the World Bank
and embassy, including full
answers to the questions
asked herein. (Taken care
of by the Finexpo
Secretariat.)
IF
SUFFICIENT
ANSWER
End of the procedure
IF NOT
SUFFICIENT
Desk research on the
project by BTC or
another consultant
with appropriate
expertise. This desk
research may, or may
not include a price
study, depending on
the uncertainties and
loop holes in the
project's description.
IF SUFFICIENT
IF NOT
SUFFICIENT
end of the
procedure
Feasibility
study on the
spot by BTC or
another
consultant with
appropriate
expertise
17

4 Monitoring and reporting
Copy of the contract
The exporter has to provide the Finexpo Secretariat with a copy of the commercial contract
immediately after it is signed by the parties. The exporter has the obligation to inform the
Secretariat immediately if the works as described in the commercial contract differ substantially
from the information provided in the Finexpo application form. The exporter also has to explain
the reasons behind the changes made.
Review reports
During the entire implementation or construction period of the project, the exporter has to
provide the Finexpo Secretariat with a yearly report on the progress of the works. This yearly
reporting can be brief, but has to contain at least:
- A clear description of the works achieved: the different activities and sub-activities
undertaken and the risks faced and difficulties encountered;
- A clear timing for the different activities and sub-activities that have to be done yet.
The last reporting should also contain lessons learned and recommendations for the future.
Finexpo will place a template for this reporting on its website.
Quality check and follow-up reports
The Finexpo Secretariat can ask at any point in time to BTC or another consultant and/or the
embassy a quality and reality check of the reports delivered. This will be done for at least 2
projects per year.
The Finexpo Secretariat will organize a follow-up report 3 to 5 years after the completion of the
project: executed by the BTC or another consultant with appropriate expertise. This will be done
for at least 2 projects per year.
The Finexpo Secretariat shall select the projects that are up for quality checks or follow-up
reports on the basis of:
- The information disclosed by the yearly reports provided by the exporter during the
construction period. E.g. if certain information remains unclear or if after oral
consultation with the exporter questions remain unresolved, this could lead to quality
and reality checks and/or follow-up reports.
- Concentrations on exporters and recipient countries, where high concentrations lead to
increased likelihood for quality and reality checks and/or follow-up reports.
The quality checks and the follow-up reports shall be shared with the Finexpo Committee and its
results shall be communicated to the public via the annual activity report of Finexpo.
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5 Calculation of the Belgian Interest
The FPS Economy analyses the Belgian interest for every project that applies for either
concessional or commercial support and presents its conclusions to the Finexpo Committee.
Explanation of the thresholds
50% for the concessional program. The concessional program of Finexpo has a significant
budgetary impact and contains a considerable reputational exposure for the Belgian state, so the
project should consist of at least 50% Belgian interests.
30% for the commercial program. Compared with the concessional program, the commercial
program of Finexpo has less of a budgetary and reputational impact. Nevertheless, one should
prevent relevant but relatively unsubstantial factors (such as profit margin and transport costs)
artificially driving up the Belgian interest. Therefore a minimum of 30% is applied.
Methodology
The analysis of the Belgian interest has a quantitative and a qualitative component.
1) The quantitative component consists of an analysis of the gross value added of the
project, and has to be at least 30 or 50%. The project is broken down in its smallest parts
and the nationality of these separate parts is determined: the different (raw) materials
used, labor costs, profit margin, transport costs, design, etc. With regard to (raw)
materials, it should be specified that “relevant” refers to where the materials come from
and to what degree they are processed in Belgium. A certificate of origin is not sufficient
to Finexpo standards since it merely guarantees the fact that the last processes to
achieve the product took place in Belgium. Royalties that the applying company might
have to pay can never qualify as ‘Belgian interest’.
On a yearly basis and per applying company, the FPS Economy also keeps track of the
proportion between the claimed Belgian interest in the project(s) and the turnover
assignable to production 4 on Belgian territory. If this ratio surpasses the 100% mark,
this means that either the stated facts are wrong or that distribution costs are taking up a
too important a place in the projects.
2) The qualitative analysis checks following issues:
- Does the applying company actually have a production activity on Belgian territory?
- Are there other relevant elements that could contextualize the result of the quantitative
analysis: the quality of the technologies used, the level of R&D involved, etc.?
- Is the export strategy of the applying company sustainable and does it fit the broader
long-term perspective of the company?
- Does the project fit within the export strategy of the company?
The result of this analysis is then presented to the applying company, which has the chance to
react, introduce new information or propose changes in the project to be able to meet the
minimum requirements.
4 Production turnover = gross turnover – turnover assignable to distribution.
19

The result of the analysis and the consultation with the applying company is then presented by
writing to the Finexpo Committee, which will assess the Belgian interest as an important
component of the final advice it delivers. The Finexpo Committee can decide for example that a
small shortfall with regard to this minimum percentage could be compensated by a clearly
demonstrable strategic benefit for the Belgian economy (an R&D-department in Belgium, a
vested interest in the sector in a particular country...).
20