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Home > Facilities > Banking > Conventional Financing > EXIM Overseas Guarantee Facility (EOGF)

Objective of EOGF

The objective of EOGF is to assist Malaysian Companies that are bidding for / have secured overseas contracts to obtain credit facilities from financial institutions (FIs).

EXIM Overseas Guarantee Facility (EOGF)

EOGF is aimed to encourage FIs to provide financing and / or issue Bank Guarantees in respect of Malaysian companies undertaking / intending to undertake overseas contracts / projects with Guarantee provided by EXIM.

Financing will be made available by Participating FIs (PFIs) and supported by EXIM through the provision of EOGF to secure the credit facilities granted for the performance of the contract.

The PFIs would be the domestic banks, merchant banks, locally-incorporated foreign banks and Development Financial Institutions including their subsidiaries in Labuan.

Financing will be offered to borrowers who are contractors or sub-contractors, either involved in Construction, Supply of capital or semi capital goods or services or pure services contracts so long as they are Malaysian owned or controlled companies.

However, certain companies are not eligible for financing and they are, solely trading companies, Government Linked Companies (GLCs) as well as its subsidiaries.

With EOGF, the PFIs are able to provide financing to the borrowers for up to 90% of the contract value in major currencies such as the US Dollar, Pound Sterling, EURO, Japanese Yen for up to a tenor not exceeding 10 years.

The EOGF offers attractive financing costs to the borrower inclusive of the guarantee fee. For an additional premium, the borrowers are able to insure non-payment risks arising from political and/or commercial losses.

Salient features of EOGF

1.	Eligibility
	i	Borrower / Contractor ie. PFI’s Clients

Must fulfill ALL of the following:
	Malaysian owned or controlled companies as per Exchange Control Act 1953 / ECM Guidelines or any other guidelines or Acts issued from time to time (including overseas subsidiaries owned or controlled by Malaysian(s).
	Companies negotiating / bidding to secure or have already secured contracts or projects overseas.
	Main and sub contractors are eligible.

Type of contracts

Contracts including but not limited to:

Construction

Supply of capital or semi capital goods, which include elements of services and commissioning.

Services

Note:

Privatisation and Concession types of Contracts are not currently eligible.

Economic Sectors

All economic sectors.

Purpose of financing

	To provide financial guarantee for overseas contracts, i.e. for tender, advance payment, performance and defect liability (retention) purposes.
	To finance the purchase of raw material, equipment and machinery as well as overheads pertaining to the production, construction, fabrication, installation and commissioning of overseas contracts / projects.
	To finance the guarantee fee and / or insurance premium.

Facility Type

All types of credit facilities including but not limited to:
	Trade finance facilities including Bank Guarantees (Contract Bonds).
	Revolving Credit (except OD), and
	Term Financing

Amount of Financing

Up to RM100 million, or its equivalent in Foreign Currency per project / contract.

Tenure

Up to 10 years, inclusive of grace period, if any.

Currency of Financing / Guarantee / Insurance

Ringgit Malaysia, US Dollar, Pound Sterling, EURO, Japanese Yen

Pricing

	Fund-based, i.e. Revolving Credit, Trust Receipts etc. : Effective Cost Of Funds (e-COF) plus maximum spread of 1.0% p.a.
	Bank Guarantees and Bonds: Maximum commission of 0.5% p.a.
	Other non-Fund-based as per ABM / BNM Guidelines.

Collateral / Security / Credit Support to be provided by the borrower to PFI

Any or not limited to the following:
	Assignment of contract proceeds, as well as Insurance Policies, SBLC, Bank Guarantees / Bonds, if any.
	Sovereign Guarantee
	FDR & build up of sinking funds
	Debenture
	Directors’ Joint & Several Guarantee
	Holding / Associated company Guarantee and / or 3 rd party Corporate Guarantee
	Other tangible assets, if required

Guarantee fee for EOGF

1.5% p.a.

10.

Other terms and conditions

	Compliance with the prevailing foreign exchange administration requirements.
	When required, the exporter would have to take up EXIM’s Insurance Policies to cover non-payment due to political and/ or commercial risks for an additional premium cost.

Note: The terms and conditions stated above are subject to review from time to time.

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