EFIC insures lenders providing loans for overseas investments or projects. EFIC’s Political Risk Insurance – Lender Policy insures the lenders against financial loss incurred as a result of non-payment by the borrower of principal and/or interest amounts due under a loan facility where the sole and direct cause of non-payment arises from any of the insured political events.
Insured
Financial institutions/banks carrying on business in Australia or a subsidiary of such financial institutions/banks providing financing for an investment/project outside of Australia.
Sponsor
Any company undertaking the investment/project outside of Australia. The Sponsor need not necessarily be an Australian company.
Borrower
The entity to which the Insured is providing finance. This may be a special purpose company, the Sponsor, or some other entity acceptable to EFIC.
Insured Political Events
EFIC will provide insurance against the Borrower defaulting on a scheduled or accelerated loan payment where the sole and direct cause of the default is one of the following political events:
- expropriation
- war damage
- political violence
- currency inconvertibility and exchange transfer blockage
Cover can also be provided for other political events such as deprivation, forced abandonment, selective discrimination and default by the host government of an arbitral award following a breach of a contract.
EFIC’s Maximum Liability
This is the maximum amount which EFIC will insure. Typically this will be based on the principal and/or interest due on a loan.
Level of Indemnity
An Insured’s loss may be indemnified to a level of up to 100%.
Term of Policy
A policy’s term will be for a duration equal to or less than the term of the loan inclusive of the loan drawdown and repayment periods, with the latter period not to exceed 10 years.
Currency of Policy
Policies will be issued in the same currency as the loan funds. This must be a freely available and convertible currency.
Costs
EFIC’s premium will vary depending on factors including the country for which cover is sought, the region where the investment or project is located, the period of insurance, the political risks being insured and the type of investment or project being financed.
DISCLAIMER This document is provided to give you an indication of the terms and conditions upon which EFIC may be willing to provide insurance. In connection with a particular transaction, EFIC reserves the right to make any changes or additions to the final terms and conditions that it believes are necessary or desirable. All requests for insurance are considered on a case by case basis.