Export promotion with a new approach – trade facilitators seek access for Finnish companies to international public infrastructure projects

In its traditional role as an export financier and guarantor, Finnvera has acted in a demand- and exporter-customer-driven manner: when our exporter has an export transaction in sight, we think of a suitable financing solution to the transaction. However, as global competition intensifies, new methods are needed. Finnvera is looking for a new angle to the traditional style and is now actively looking for new trade opportunities for Finnish export companies through financing solutions. The deal doesn't always come to the exporter, so it's appropriate to look for potential buyers around the world. In cooperation with Business Finland, Finnvera seeks access for Finnish companies to international public infrastructure projects.

Finnvera established a new trade facilitator position to enable export transactions, to which two experienced export finance and export market experts from Finnvera were appointed, Senior Advisers Erno Ihto and Mika Relander. Erno has been working for a long time as a Finance Manager especially to speed up the exports of SMEs and to increase their financial expertise. Mika, on the other hand, as a Country Risk Adviser, has for a long time followed the development of political and commercial risks especially in the Latin American, African, and Chinese markets, the export opportunities of Finnish companies and Finnvera's opportunities to guarantee exports in these markets. In the new role, the focus is now on potential buyers alongside the exporters.

Aiming at international EPC financing projects

When a state wants to improve its infrastructure, it often tenders an international EPC company (Engineering, Procurement and Construction) to handle the construction work on a turnkey basis. The EPC company looks for and tenders subcontractors and organises the project. The term EPCF refers to a project, where the offer must also include a financing package, which can include development financiers, private financing and financing guaranteed by Export Credit Agencies (ECAs). In the financing package, the borrower is a sovereign entity (usually the Ministry of Finance of the target country), and the associated credit risk is borne by Finnvera and other ECAs in the arrangement.

The ECAs of many other countries have already participated in EPC financing. Finnvera was also encouraged in this direction in the report evaluating the competitiveness of export financing, which was carried out in 2023.

"In the EPCF project, financing is usually arranged by an international bank. These banks are interested in cooperation with Finnvera. Several ECAs can be involved in the projects, each guaranteeing their national exports. As the Finnish state's ECA, Finnvera can guarantee Finnish export deliveries to the EPCF project. This gives Finnish exporters the opportunity to offer their products and services to the EPC company," Erno Ihto says.

These EPC infrastructure projects are carried through around the world on different markets with different models of financing packages.

“Finnvera's support to promote Finnish supply is primarily needed in areas where access to international capital markets is more limited, i.e., mainly in Africa and Southeast Asia, but also in other developing markets. Infrastructure projects implemented using the EPC model are implemented everywhere, and Finnvera is ready to respond to demand where there is a need”, Mika Relander says.

At the moment we are working on a number of pilot projects in African and Southeast Asian markets - it is typical for an EPC project to take a while before all the pieces of the puzzle are in place.

Finnvera and Business Finland are intensifying their cooperation – next stop Türkiye

With the new operating model, the goal is to involve Finnish exporters in EPC infrastructure projects in cooperation with Business Finland's network. The next target is Türkiye, where Business Finland and Finnvera will organise trade mission trip from April 24 to 26, 2024.

Turkish contractors have played very important roles in global construction industry during the last decades. In the period of 1972-2022 they have successfully undertaken projects with a total value of USD 472 billion. Turkish contractors are looking for suppliers of high technology for projects in the Middle East, Africa, Eastern Europe and Southeast Asia in the sectors of airport, railway and ports.

“Participating in this trade mission will give a unique opportunity to meet with leading Turkish contractors in the above mentioned sectors and to discuss in details of four potential projects: Railway projects in Africa and Turkey, waste to energy project in UK and airport project in Southeast Asia.  All these projects will be implemented by Turkish contractors”, says Senior Advisor Grace Wang at Business Finland.

“We connect global EPCs seeking advanced technology solutions with Finnish suppliers and offer Finnish Export Credit Financing solutions. We focus on major global projects aligned with Finnish expertise in airport, railway, port and renewable energy”, Grace Wang continues.

The leading global EPCs are our Foreign Strategic Accounts with whom we build long term strategic business partnership.  By better leveraging financing from Finnvera and funding from other Team Finland stakeholders, we aim to help Finnish exporters to participate and win infrastructure projects in global markets. 

Additional information:

Erno Ihto, Senior Adviser, Finnvera, erno.ihto (at) Finnvera.fi, tel. +358 29 460 2529

Mika Relander, Senior Adviser, Finnvera, mika.relander (at) Finnvera.fi, tel. +358 29 460 2725

Grace Wang, Senior Advisor, Business Finland, grace.wang (at) businessfinland.fi, tel. +358 50 342 4740