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US Ex-Im Bank has given the final administrative go-ahead for a loan guarantee of up to US$200mn to support US exports to build the Nanhai Petrochemical Complex in Guangdong Province in China.

“This is the first major private financing by US Ex-Im in China. It opens up a new avenue for Ex-Im Bank to help US companies export their products and services to the important China market,” says Ex-Im chairman Philip Merrill.

Ex-Im’s action came after a recent ceremony in Beijing to celebrate the execution of agreements for US$2.45bn in debt financing by a consortium of lenders, including Chinese and international commercial banks, and Ex-Im and four other export credit agencies, for the US$4.4bn Nanhai project. Ex-Im Bank’s loan guarantee will support up to US$180mn of equipment and services by Bechtel Corp and other US suppliers, as well as interest and financing fees.

This transaction marks the first time that Ex-Im has supported US exports to China through limited recourse project financing, in which repayment is based on project revenues, rather than a guarantee of the debt by the host country government.

The Nanhai Petrochemical Complex is expected to meet increasing petrochemical demands primarily in southern China. The project will consist of an 800,000 ton per year ethylene cracker, intermediate and final petrochemical product processing units, utilities and supporting infrastructure.

Bechtel will provide project management, engineering, procurement and construction services. Other potential US suppliers on the export sale include Stone & Webster Consultants; Kellogg, Brown & Root; and Triconex Corp.

Ex-Im Bank’s guarantee will cover both the construction and post-construction phases of the project. A consortium of lenders will provide the guaranteed financing, with CreditAgricole Indosuez acting as Ex-Im Bank’s agent.