Under officially supported export credit programs, SACE specializes in providing export credit guarantees and insurances for buyers credit, suppliers credit and structured and project finance.
Beyond export credit support, SACE also has a range of non-export credit products such as Political Risk Insurance, Surety Bonds, Working Capital Facilities and Financial Guarantees.
In the last few years SACE has primarily been supporting large-scale infrastructure projects and operations in the energy, refinery, steel and petrochemical sectors. SACE increasingly uses financial guarantees covering sets of loans given by Italian and foreign banks to different Italian exporters.
Since its transformation into a joint stock company in 2003, SACE neither falls under public law nor under the supervision of the Italian Parliament. Access to information regarding SACE's specific operations and companies covered is still problematic.
In 2007 SACE’s stature was revised, allowing it to play a more active role in supporting foreign business operating overseas, without the involvement of Italian exporters or banks, if the operations are supporting Italian strategic interests abroad such as infrastructure for energy supply.
The financial and economic crises unfolding since 2008 have let the Italian government, in an unprecedented move, to task SACE with covering risks associated with operationswithin Italy, primarily by guaranteeing framework loans given by the State to Italian private banks which on-lend to small and medium enterprises facing a credit crunch. Also in this case very little information is publicly available about specific ultimate beneficiaries and operations backed by SACE.
Who is involved
SACE is a Joint Stock Company, 100% owned by the Italian Ministry of Economy and Finance. Therefore this Ministry, as well as the Economic Development and Foreign Affairs Ministries, sit on its board. The chair of the board and the CEO is appointed by the government. At the end of 2012 SACE was acquired by Cassa Depositi e Prestiti, the giant public-private investment bank, 70% owned by the Italian Ministry of Economy and Finance and 30% owned by 66 Italian banking foundations (which have equity participations in all Italian private banks). It is still unclear how this change will affect the governance of SACE in practice , which should be regarded now as a part of the CDP Group.
SACE itself is actually a group, given that SACE controls 100% of SACE BT (“Breve Termine”, that is ‘short term’) and SACE Factoring (for credit recovery). SACE BT was supposed to be partially privatised in favour of some Italian banks, but this transformation stalled as SACE BT suffered significant losses through the economic crisis. The European Commission has been investigating SACE’s total control of the short term business, which might result in violation of EU law and WTO rules.
Dodgy deals associated with SACE
In the last fifteen years SACE has been involved in the financing of the Lesotho Highlands Water Project, the Bonny Island LNG project in Nigeria, the Cernavoda nuclear power plant in Romania, the Baku-Tbilisi-Ceyhan oil pipeline project in the Caspian region, the Blue stream gas pipeline from Russia to Turkey and more recently the South Stream gas pipeline connecting the same two countries under the Black Sea.
SACE has been recently active in covering risks associated with Italian exporters to Belarus, despite the difficult human rights situation in the country and EU sanctions consequently applied to it.