What is the Letter of Guarantee Program for Overseas Contractors’ Service?
The purpose of the guarantee letter is to support the sustainability of our companies, which are performing on the construction sector, on the current markets, in order to enable them to enter new markets with guarantee letters for the undertaken projects abroad.
In the scope of the foreign construction service guarantee letter program, we are providing guarantee letters for construction companies, whose creditability undertaken/will undertake projects are being ranked as appropriate, to enable them to participate to tenders abroad and/or give commitments in return of counter guarantees from Turkish banks to the Türk Eximbank, on behalf of the Turkish construction companies to hand out to the contracting authority purchaser abroad or the bank of the purchaser;
- temporary guarantee letter,
- in the case, that the construction company win the tender, a performance guarantee,
- Pre-financing guarantee for repayments of advances from the purchaser to the construction company.
Who can apply?
Construction companies, which have undertaken construction projects abroad, can apply for this program.
What does it cost?
The Türk Eximbank charges 0,5% commission fee per year for issuing guarantee letters to be hand out to the purchaser contracting authority or the bank of the purchaser.
The commission amount will be collected in each quarter from the Turkish banks of the constructor.
What is the company limit?
- In the course of the program the total guaranteed amount on behalf of the company is USD 25 Million in return of the counter guarantee of the Turkish banks. If company risks will be determined at a certain time, the project shares of the undertaken project in the scope of the consortium, which will be constituted by the construction companies, will be taken into consideration.
- The guarantee letter will guarantee maximum up to 25% of the contract value, signed with the contracting authority or the tender value, the project limit, company limit will not be topped.
- The guarantee letter issue will not exceed 20% of the program limit on country basis.
What is the threshold?
There is no threshold in the course of the foreign construction service guarantee letter program on transaction basis.
How long is the term?
The term and amount of the guarantee letter to be issued will be determined by our bank, to be limited to the company, project and country limits and in consideration of the requested guarantee letter type, the tender specification or the contract content.
The amount of the guarantee letter issued for any project by our bank within the limits mentioned above cannot exceed the counter guarantee amount given by the Turkish banks to our bank.
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