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With the support of Finexpo, FSE Group exported medical equipment to hospitals in Mongolia (© FSE group)
Did you know that our FPS supports Belgian companies to discover new markets abroad, mainly in developing countries? Meet Finexpo.
Belgian innovative solutions
X-RIS produces X-ray equipment that can easily check for cracks in aircraft, cars or ships, for example. The company's export countries include Peru. Hydrobox is installing small hydroelectricity plants in Kenya that will allow it to provide electricity to remote villages of a few 100 inhabitants. Ecosteryl, in turn, provides innovative solutions for treating and recycling medical waste. These include things like disinfecting used needles. The company's operations include Kenya, Lebanon and Ivory Coast.
The FSE Group specialises in biomedical and laboratory equipment and supplied some Mongolian hospitals, among others. Haemers Technologies made the headlines only last year for succeeding in purifying Vietnamese soils from the toxic defoliant Agent Orange. Among other things, Pepps Engineering develops smart monitoring systems based on artificial intelligence that allow companies to track and improve their facilities. Or how about CEE, which supplied cocoa burners powered by solar panels to the Virunga Park in Congo that Belgian chocolatier Dominique Persoone uses to make sustainable chocolate? As such, polluting fossil fuel powered cocoa burners can be avoided.
Each of these are Belgian companies that provide highly innovative solutions and can add great value to a country. And all the aforementioned examples have at one point received a boost from Finexpo!
Financial benefit for Belgian companies
Finexpo is a collaboration primarily between the FPS Foreign Affairs and the FPS Finance. It acts as an 'inter-ministerial advisory committee' that supports Belgian companies seeking to export equipment goods. In so doing, it seeks to promote the image and reputation of Belgian companies abroad. It is also essential that the exported product contribute to the social and economic development of the beneficiary country.
Finexpo has a range of tools at its disposal for supporting companies which allow to reduce the cost of the project or to give a grant. All Finexpo interventions are done within the framework of an OECD arrangement around credits for export enjoying public support. As a result, each participating country has exactly the same opportunities to support its companies' exports. Incidentally, other countries also have a similar body to Finexpo. With that said, obviously a larger country, like France, can bring in far more money.
Except in the case of untied aid (see below), there must always be a clear Belgian interest. Are the parts for, say, a water pump made in Belgium? Is there a Belgian distributor? Depending on the aid instrument, the Belgian interest must amount to at least 30% to 50%. This is how Finexpo is aiming to generate employment in Belgium. And this is even better if a subcontractor is a company in the social economy or a social enterprise for customized work.
Finexpo has only one purely commercial instrument, namely 'interest stabilisation'. This allows the company to guarantee to the buyer – a private organisation or a public institution – that it can enjoy a fixed interest rate throughout the credit period. A construction company like BESIX was already using it, as was Somati Systems, a player in the firefighting sector.
All other instruments are 'concessional'. This means that public buyers in developing countries do not have to repay the entire loan amount at market conditions. Finexpo grants longer repayment terms to the buyer, or reduced interest rates and/or a grant. Training is also always being funded, in order to use the goods provided in a sustainable manner. In addition, there is also a specific instrument, the technical assistance, which serves specifically to finance the training cost in the event of an interest stabilisation and untied state loan for Belgian companies. All concessional aid qualifies as official development aid or ODA.
Innovation, renewable energy and circular economy
A commonly used instrument is the 'SME Innovation Tool'. This allows first-time innovators to enjoy a grant that covers 80.01% to 100% of the contract value. The client must be a public institution in a low or middle-income country on the OECD-DAC list. An analogous SME tool exists for renewable energy and for the circular economy.
Tied state loans
Concessional instruments also include state loans. This involves a developing country requesting a loan from Belgium to carry out some major infrastructure work. This includes water and electricity supply, water sanitation, medical issues and so on. In the case of a tied state loan, the work must be carried out by Belgian companies.
The loan of up to 12 million euros is to be paid off over 30 years including a grace period of 10 years without reimbursement. The combination of a long reimbursement period and a low interest amounts to a grant element of 35%.
Companies like John Cockerill (water sector) and Soulco (IT sector) already succeeded several projects thanks to this aid instrument.
For the least developed countries (LDCs) and the eight highly indebted poor countries (HIPCs), tied aid is not permitted. A state loan should be untied there. The beneficiary country must then issue an international tender that is open to all countries.
Of course, Belgian companies can also compete and they regularly win the contract. Denys – a specialist in large infrastructure works – often succeeds in this. A bus manufacturer like VDL has also won an allocation to supply buses in Ghana. Televic conducted educational projects there – one of the digitalisation projects was visited by Queen Mathilde several years ago.
State loans are managed by the FPS Finance; all other aid instruments are to be accounted for by the FPS Foreign Affairs. The detailed explanation and all the documents and forms can be found on our website.
Even with limited resources, Finexpo is succeeding in firmly supporting Belgian industry. We give companies just the boost they need to break into foreign markets. At the same time, they gain know-how in specific contexts and can improve their products. Our country particularly excels in the medical and drinking water sectors.
When selecting project proposals, Finexpo does not take an overnight approach. The Finexpo Secretariat of our FPS verifies that the company meets all the criteria. And that also includes aspects such as human rights, sustainable supply chain care, combating corruption and promoting sustainable development.
For each project, Finexpo seeks advice from our embassies and possibly from experts from the Belgian development agency Enabel. Finexpo may then make suggestions to the company to improve the application. An employee from the FPS Economy will carefully weigh the Belgian interest.
Ultimately, the selection is made by consensus by the Finexpo committee. This includes representatives from the Cabinets of Foreign Affairs and Development Cooperation and from the regional trade agencies FIT, AWEX and hub.brussels.
Afterwards, the finance inspector will also give an opinion. The Council of Ministers will make the final decision.