Israel and China signed a new Financial Protocol in the field of Clean-Tech, worth $ 300 million, which will enable the parties to expend economic activity between the two countries to other environmentally friendly technologies.
Applications for projects under the Protocol would be launched in the second quarter of 2018. For the detailed requirements and processes, please consult the local NDRC and the Finance Bureau.
On September 11, 2007, Finance Minister Moshe Kahlon and his Chinese counterpart, Jie Xiao, signed a new financial protocol in the field of Clean-Tech, worth $300 million, which will enable the parties to expand economic activity Between the two countries to other environmentally friendly technologies, including advanced agricultural technologies and smart green energy technologies, which the Chinese government is interested in implementing, using Israeli experience and expertise.
The threshold conditions of the new protocol have been lowered in such a way as to enable the integration of medium-sized companies that will be able to expand their operations under the protocol. In addition, Israeli companies wishing to take part in the protocol are not required to have representation in China.
Each province in China has different needs, and a different specialization is required in the fields in which it wishes to promote the above-mentioned needs, as part of the protocol.
During the second quarter of the year, the Chinese Ministry of Finance is expected to publish the Chinese inquiries under the current Financial Protocol- Chinese Companies will be able to receive the relevant information either via MOF website, local bureau or local NDRC and then apply accordingly.
Here are the main terms and preconditions under the Clean-Tech Financial Protocol:
- A minimal level of Israeli made products, including but not limited to equipment, technology, services and etc.. in protocol transactions will be required. In agriculture projects, the required minimal level of Israeli made products shall be 50%. In other projects, the minimal level of Israeli made products shall be 30%.
- The minimal registered capital required for a bidder shall be lower of (a) 15% of the project’s total value, (b) 2 million USD.
- The bidder must be continuously in business during the last three years, and has financial, technical or production capability necessary to perform the contract.
- The minimal annual turnover required for the bidder over the past two years shall not exceed 50% of the total value of the project.
- The experience required from the bidder will be proportionate to the scope of the project. The bidder should have completed at least two similar projects with a minimum contract amount no less than 50% of the project’s total value under this protocol. Previous experience required from the bidder shall not be constrained to experience in China alone and /or to experience in Financial Protocols, however, relevant experience in other countries shall be favorably viewed.
- The tender might condition the execution of the project with the opening of a local office in china, however, bidders without local offices in China shall not be disqualified from bidding.
- The Chinese Party will provide the same preferential taxation policy for all projects approved within the facility of this Financial Protocol as similar loan projects under the financial cooperation between China and other foreign governments.
- The Long Term Financing (85% of the project amount) shall be repaid by an Individual loan agreement in all the following terms: (1) Maturity period of 12 years, (2) Grace period of 3 years, (3) Fixed interest rate of 3.3% per annum.
- The Down Payment (a minimum of 15% of the project amount) may be financed by a down payment loan- the Down loan will be paid within 18 months in three semiannual installments. The Fixed Interest rate for the down payment loan will be 1.5% per annum.
- The Insurance premium paid for transactions under this Financial Protocol will be reduced by 35% in the comparison to similar projects.