BEIJING, CHINA – Australian companies stand to benefit from a Reciprocal Risk Participation Agreement signed last week between the Export Finance and Insurance Corporation (EFIC) and the Export-Import Bank of China (EXIM China).

The agreement is a framework for financing goods and services exported from Australia or China and overseas investment from the two countries. It follows a multi-lateral framework agreement endorsed by the Asian EXIM Banks Forum at its 16th Annual Meeting on October 2010 in Busan, South Korea.

Under the Agreement, eligible Australian exporters can benefit from financing jointly provided by EFIC and EXIM China particularly when Australian and Chinese companies are working together in a third country.

“With this agreement we will broaden the ways our organisations work together to help exports and investments to continue to grow between our two countries, to the benefit of Australian and Chinese companies" said Angus Armour, CEO and Managing Director of EFIC.

The agreement also could be used to facilitate the financing of resource projects in Australia where the resources are to be exported to China.

“Risk-sharing agreements allow us to pool resources to meet the financing needs for projects which we wish to support. Recent projects in the resources sector in Australia, where EXIM banks and ECAs play a crucial role in the financing, are examples of situations where both Australia and China can mutually benefit,” Mr Armour said.

“With EFIC‟s support Australian companies can win sub-contracting work to these projects either as „tier-one‟ suppliers, supplying directly to the project, or as „tier-two‟ sub-contractors to these suppliers.”

Download the attachment to read the entire media release