International financing with Dutch Good Growth Fund (DGGF)
Exporting capital goods to developing countries can be challenging, especially if financing is difficult for the buyers.
Through DGGF, there are still possibilities.
DGGF for whom
For Dutch entrepreneurs who want to export capital goods to developing countries, it is sometimes difficult to insure a transaction through regular export credit insurance. Especially when it comes to relatively small buyers. This is because it can be a challenge to attract private finance.
That is why the Ministry of Foreign Affairs has started to offer international financing aimed at developing countries through the Dutch Good Growth Fund (DGGF). For DGGF, the combination of aid and trade is central. On the one hand, the fund focuses on Dutch exports and investments (primarily of SMEs) to developing countries. On the other hand, the fund focuses on local activities in the developing countries themselves. There are currently around 70 countries where projects are eligible for financing through the DGGF.
An important element for this international funding is the development relevance of the individual projects. We ask you to elaborate on the potential positive effects in terms of the selected Sustainable Development Goals (SDG’s; see below). The fund is additional to the market and is therefore particularly applicable to a higher risk segment where private funding is not possible.
How does it work and how can you apply for it?
The Dutch Good Growth Fund covers payment risks up to EUR 30 million. Guarantees can also be covered against the risk that your buyer wrongfully calls them in. Our cover is also available for banks that finance or pre-finance your exports. This allows you to offer your buyer longer payment terms so that it can pay in instalments over several years. At the same time, you free up credit with your bank.
Under certain conditions, the fund can also provide financing of up to €5 million to your buyer. The conclusion of such a financing contract is based on supplier credit and goes together with an export credit insurance policy. Atradius can factor in bills of exchange after the goods have been delivered on the spot. You can find out exactly how this works in the 'advance payments' flyer below. It is also possible for Atradius to provide working capital.
This is subject to a number of additional conditions in addition to our standard conditions. Upon acceptance, you will receive the same insurance documentation as under our regular Export Credit Insurance. You are therefore insured by the Dutch State. The premium is calculated in the same way as for regular export credit insurance.
What are the conditions?
If your export transaction for capital goods does not fit under our regular Export Credit Insurance, you can still make use of Atradius' export credit insurance and export financing options. In this case, a number of additional conditions must be met, in addition to our regular conditions:
- it concerns a transaction of capital goods or contracting on a country that is on the DGGF country list. You can find this list here - link to the list on the DGGF countries
- it must be a development-relevant transaction. Our assessment of development relevance focuses on the expected impact in terms of the SDGs (see below) in your buyer's country;
- the fund is primarily intended for Dutch SMEs, or for larger companies if they can demonstrate that the transaction will have a positive effect on Dutch SMEs;
- the risks of the transaction are acceptable and do not exceed EUR 30 million.
- our buyer's transaction and business operations do not involve activities listed on the FMO Exclusion List.
- You and your buyer agree to have the development relevance evaluated after issuance of the policy. We require the cooperation of both you as exporter and your buyer for this purpose.
Sustainable Development Goals (SDG's)
The SDGs are used internationally and provide an internationally acknowledged framework to indicate development impact. In consultation with the Dutch Ministry of Foreign Affairs we selected 11 out of the total 17 SDGs to assess DGGF applications (see below). For each of the selected SDGs we determined a focus area using Key Performing Indicators (KPIs) and a suggested benchmark to further specify and quantify the expected impact as much as possible. In case these KPIs and benchmarks do not match the characteristics of your project we ask you to elaborate on the expected positive impact differently.
To qualify for DGGF-support your transaction should in principle have a direct positive effect on at least two of the selected SDGs. We kindly ask you to only specify in case of an expected direct effect per SDG.
For example: a construction project resulting in an improved infrastructure (SDG 9) is a direct effect but could in turn also improve the access to healthcare (SDG 3), education (SDG 4) or drinking water (SDG 6) for local communities. While this is worth mentioning and considering, these potential side-effects would not count as direct impact.
| SDG | KPI | BENCHMARK |
|---|---|---|
| 2 | Agricultural projects | #supported farms, #supported food products |
| 3 | Health care facilities | #supported patients |
| 4 | Educational facilities | #supported students |
| 5 | Gender equality | % female related to the newly created jobs, (or specify otherwise) |
| 6 | Drinking water projects , Waste processing and sewerage | #benefitting water consumers, #benefitting users (companies) |
| 7 | Renewable Energy | #Installed capacity in MW #Total annual production in Gwh, #people with enhanced access to energy |
| 8 | Employemt and economic growth | #created jobs (specified in FTE, or indicate otherwise) #(EUR/USD or in %) Increase in turn-over as a result of the investment |
| 9 | Infrastructure | #km constructed rail / road (or specify otherwise) #constructed bridges |
| 11 | Housing | #constructed houses (or specify otherwise) |
| 12 | Responsible and efficient production | Specify depending on the characteristics of the transaction |
| 13 | Climate Action | # Reduction of greenhouse gas (GHG) emissions as well as carbon removals. (Or specify otherwise depending on characteristics of the transaction) |
Technical Assistance
Through the DGGF it is also possible to make use of so-called Technical Assistance. Technical Assistance provides support prior to your transaction. This might include support for the exporter when applying to supply the necessary information, or support for the buyer when this contributes to increasing the development relevance or improving CSR aspects of the transaction.
The success of the Dutch Good Growth Fund limits the number of new promises of cover in 2022
Due to the large number of transactions underwritten by Atradius as part of the DGGF, the maximum limit of this facility has almost been reached. As a result, as of today, we can no longer issue promises of cover, but only advice of cover for DGGF. For exporters who have received an advice of cover and wish to request a policy, the ‘first-come, first-served’ principle applies. As long as there is still capacity under the maximum limit, policies can be issued.
Since a substantial part of our commitments consists of promises of cover (i.e. not policies), we do not expect that we have to disappoint exporters any time soon.
Anti-bribery declaration and anti-bribery policy
In the Netherlands, all forms of bribery are prohibited and punishable by law. The Dutch State and Atradius DSB do not under any circumstances wish to become involved in transactions involving bribery. It is therefore important that we want to ensure as far as possible that eca-covered transactions are free of bribery. We will therefore ask you to sign an anti-bribery statement at the time we issue a policy to you. You can view a sample of such a statement under downloads.
Atradius DSB and the state have jointly drafted an anti-bribery policy. You can download the document below.
Exclusion list eci
In the Exclusion list export credit insurance (eci), available below, you can find which activities are excluded from insurance by Atradius DSB. As per January 1st 2023 there are new limitations in place for fossil fuel-related transactions resulting from the implementation of the COP26-declaration.
