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General conditions for investment guarantees
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Investment guarantee
The investment guarantee covers the risk of loss due to political events associated with investment or investment loans abroad.
The guarantee can be used by investors or financiers of investment loans.
Protect your foreign investment
The investment guarantee can be used by investors or financiers of investment loans. It offers protection against events that occur as from the date of the full or partial completion of the investment or the disbursement of the loan.
With an EKN guarantee, you know that you will be compensated if, due to government intervention in the country of investment, you cannot dispose of the investment or if the investment loan you have extended is not repaid.
Investments that can be guaranteed
You can apply for a guarantee for investments and investment loans that promote Swedish interest. They should be sound investments that contribute to economic development in the country of investment. EKN offers guarantees for investments both in goods and in service production.
Examples of investments are share acquisition through capital or in kind, licenses or franchises. EKN can also guarantee the risk that you will be unable to collect the return on the investment.
Conditions
Investment currency
The investment currency determines in which currency EKN will issue the guarantee. When your investment currency is Swedish Kronor, Euro, US Dollars, Swiss Francs or Japanese Yen, EKN issues the guarantee, invoices the premium and pays compensation in this currency. For other contract currencies, EKN issues the guarantee, the premium invoice and disburses the claims payment in Swedish kronor.
Collateral for payment
EKN has no general requirement that there must be collateral for the repayment of investment loans. But in some cases it is a prerequisite for being able to issue our guarantee for a transaction. Examples of such collateral are payment guarantees and mortgages in equipment.
Responsible business in the provision of guarantees
EKN wants to promote responsible business. We assess the risk of negative environmental impact in our guarantee decisions. We also consider social issues and that there is no corruption in the transaction. Some of the questions in the application pertain to this.
Application
Review the following steps to apply for an investment guarantee.
Apply in good time before you have committed to your investment. EKN conducts a risk assessment. If it is acceptable, an offer is submitted.
Request guarantee
You send us a request for guarantee to be issued encompassing the value of your completed investment. You can also choose to report the expected return on the investment.
1. Value of the investment
When the investment has been fully or partially completed or the loan has been disbursed, request to EKN that you want to have the guarantee issued within 30 days.
2. Return on the investment
Report the return to EKN once a year, at the latest 30 days after the end of the investment company’s financial year. In the report, make an assessment of the expected return in the year ahead.
Pay the premium
EKN sends the guarantee and a premium invoice to you. The premium must be paid within 30 days from the date of invoice.
Frequently asked questions about the investment guarantee
What risks does the investment guarantee cover?
The investment guarantee protects against the risk of government intervention in the country of investment that would lead to you not being able to dispose of the investment or if the investment loan you have extended is not repaid.
Examples of such risks include: nationalisation, expropriation, broken agreements, war, natural disaster, currency barriers and events associated with economic change.
How does the investment guarantee work?
Companies operating in Sweden can apply for a guarantee to cover an investment. Banks and other financial institutions, in and outside Sweden, who finance Swedish investments can apply for a guarantee for investment loans.
The investment guarantee covers risk in loans that are not linked to agreements and deliveries. For loans linked to agreements and deliveries, EKN’s loss on claim guarantee for lenders can be used.
The guarantee usually covers 90 per cent of your invested amount or claim, that is, you have an excess of ten per cent. You can also choose to take a higher excess and thus lower your premium for the guarantee.
The excess need not be a definite loss for you in the case of default. If EKN recovers a claim, these amounts are distributed proportionally between you and EKN.
What does the investment guarantee cost?
The premium is paid annually in advance and is expressed as a percentage of invested capital or disbursed loan amount. Premiums for returns are paid separately in the event that the return is to be guaranteed. Premiums are set on a case-by-case basis depending on the country and the assessed risk profile of the individual investment.
There is no fee for applying for a guarantee and receiving an offer. Our offer is valid for six months. After this period, you can extend the offer for periods of three months.
When will I receive compensation from EKN?
- In case of transfer hindrance, EKN pays compensation after four months from the date of loss.
If the investment has been completely lost, compensation will be paid without a waiting period. If the investment has been partially lost, the value should have decreased for a period of at least six months. In case of war or natural disaster, compensation is paid without a waiting period. - For investment loans, the following applies. EKN pays compensation if repayment has not been made for a continuous period of four months. In case of transfer hindrance, the waiting period applies from the date of deposit.
Documents
Application
You can find the documents required to apply for a guarantee here.
Published
Application for Investment guarantee on behalf of the lender
1.15e
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