Restored ExIm Bank Can Be Step Toward National Credit Facility
March 5, 2020 (EIRNS)—The seven-year reauthorization of the Export-Import Bank which was part of the budget authorization President Donald Trump signed Dec. 20, is playing a role in U.S. space cooperation with developing countries. In the past the ExIm Bank, founded by President Franklin Roosevelt’s executive order of 1934, has provided the credit for major multinational infrastructure projects such as the Pan-American Highway and, after its lending capacity expansion in 1946, for aiding Marshall Plan reconstruction. It could be used again in that role. The seven-year authorization is the longest one the Bank has ever had.
In its past, the ExIm Bank’s activity has demonstrated the major role of foreign infrastructure “great projects” and joint third-country projects as the use of U.S. federal credit to develop other national economies and foster its own capital exports at the same time. In its present condition, it will need to be greatly expanded to do that again.
The bank’s capital goods export credit outstanding has gone as high as $35 billion, in 2012, but at that point more than 80% of its loans and insurance were funding Boeing aircraft orders, and it had a loan to the ill-fated Solyndra solar power company. That, in part, led to its de-chartering, and lack of board members, from 2015 until December 2019. Now rechartered, there are currently few Boeing orders for it to consider; its first large credit was $5 billion to Indonesia for an LNG project. It could quickly get back up to $40 billion in loans from projects in its pipeline.
More important, at this capacity level, than the project loans to foreign country importers, are the ExIm Bank’s working capital loans, made or guaranteed, to U.S. manufacturers of export products. According to American Banker magazine in March, it will either participate in regional banks’ long-term manufacturing loans, or guarantee working capital lines of credit.
Space satellite exports could become an important credit target, according to a Space News report on its reauthorization. The satellite industry—Aerospace Industries Association—strongly pushed for ExIm reauthorization in order to export large and complex U.S.-made satellites to countries such as Indonesia and Singapore.