CANADA MAY CLAIM ONLY A SMALL SHARE OF THE world's high-profile power developers, but that hasn't stopped its financial institutions from becoming big players. These public and private lenders have made available billions of dollars to nearly any project willing to use Canadian consultants or equipment.
Furthermore, the government is willing to back its country's products with political risk insurance as part of the package. In a world where power projects are becoming expensive and pose greater market and political risk, Canadian involvement is welcomed.
The linchpin of Canada's policy starts with its Export Development Corp., which boasts an asset base of about $8 billion (all denominations in U.S. dollars). Its capital and surplus base (including allowances) totals about $2.4 billion. EDC is part of the Export Credit Agency of Canada, which is controlled by a 15-member board of directors drawn predominantly from the private sector. That makeup gives the ECA an appetite for taking on risk.
Other countries also have similar agencies, but Canada's is different. The U.S. Export-Import Bank, for example, operates as a lender of last resort, using funds appropriated annually by Congress. If the bank runs out of money midyear, it shuts down.
Canada's EDC, though government owned, is financially self-sustaining, operating on a user-pay basis. In fact, during its 53 years, the agency has never lost money, according to Eric Siegel, EDC executive vice president. Last year, its volume increased 30 percent, reaching $18.6 billion. Siegel reports the EDC continues to evolve. About 70 percent of its business last year came from commercial transactions, up from 25 percent and 50 percent of its loan portfolio as recently as 1994 and 1997.