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The Export-Import Bank of the United States (Ex-Im Bank) is helping United Summit Power Company Ltd. (USPCL) of Dhaka, Bangladesh, build three small scale power plants in the first transaction under Ex-Im Bank's initiative to provide limited recourse financing for projects of under $30 million. (Limited recourse project financing is a type of private financing where debt repayment comes from project revenues.) Ex-Im Bank approved a total $8 million for three medium-term direct loans to support the sale of equipment and services by Caterpillar Inc., Peoria, IL for use in the Comilla, Narsingdi, and Dhaka projects.

This transaction represents a breakthrough in Ex-Im Bank's ability to help with small infrastructure and development projects, especially in emerging markets where access to financing is limited, said Ex-Im Bank Chairman James A. Harmon. Ex-Im Bank's support for this transaction provides a financing structure that will help place U.S. exporters in a more competitive position for these types of sales.

Caterpillar Chief Executive Officer Glen Barton said he sees more such projects coming in the future: These distributed power plants offer environmentally friendly power, provide power to developing rural areas and utilize U.S. exports. With this basic project finance framework in place, Caterpillar is well positioned to realize future opportunities.

Caterpillar will provide 12 gas reciprocating engines and related equipment, capable of generating 11 megawatts of power for each of the three Bangladesh plants. The plants will sell the electricity to rural cooperatives located in areas where access to electricity is limited. USPCL, the project company on this transaction, will develop, own and operate the projects. The main project sponsors are United Enterprises & Co. Ltd. and Summit Industrial and Mercantile Corp. (Pvt.) Ltd., both of Dhaka.

Under its new policy, aimed at streamlining procedures and reducing costs to the buyers on small projects, Ex-Im Bank does not require outside legal and financial advisors for project finance transactions of under $30 million. The structure developed for the Bangladesh transactions can be replicated in similar deals in the Bangladesh rural power sector.

Distributed power generation has major advantages over centralized power plants including lower system loss because of installation close to the consumer, and lower capital cost because of construction times measured in months instead of years.

Ex-Im Bank is an independent U.S. government agency that assists in financing the export of U.S. goods and services to emerging markets throughout the world by providing loans, loan guarantees, and export credit insurance. During fiscal year 2000, Ex-Im Bank supported $15.5 billion in U.S. exports.

Caterpillar is the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines and industrial gas turbines. Headquartered in Peoria, Illinois, the company posted 1999 sales and revenues of $19.7 billion.