EXPORT-IMPORT BANK OF THE UNITED STATES + + + + + ADVISORY COMMITTEE + + + + + MEETING + + + + + THURSDAY DECEMBER 9, 2021 + + + + + The Advisory Committee convened via Video Teleconference at 2:00 p.m. EST, Heidi Heitkamp, Chair, presiding. ADVISORY COMMITTEE MEMBERS: HEIDI HEITKAMP, Chair NAVA AKKINENI BARBARA BUCHNER EUGENE CORNELIUS PHILIPPE DELLEVILLE BOB DREISEWERD RODNEY FERGUSON SALLY GILLIGAN DENNY HECK WEI SHIN LAI KATHIE LEONARD BRAD MARKELL DANIEL PINHO T.J. RAGUSO VENKEE SHARMA DAVID WHITE STAFF PRESENT: HAZEEN ASHBY, Senior Vice President, Congressional and Intergovernmental Affairs and White House Liaison ADAM FROST, Senior Vice President, China and Transformational Exports Program DAN TOBIN, Managing Director, Power & Environmental Exports CHRIS VAN ES, Senior Vice President, Communications and External Engagement ALSO PRESENT JENNIFER HARRIS, Special Assistant to the President and NSC and NEC Senior Director for International Economics and Labor PAT KIRWAN, Director, Trade Promotion Coordinating Committee, Department of Commerce CONTENTS Opening Remarks 4 Advisory Committee Update and the New Office of Global Finance Development 7 EXIM's Support for Climate Finance 11 Congressional and Administration Update 29 Whole of Government Support of U.S. Exports 34 EXIM's China and Transformational Exports Program 49 Build Back Better World (B3W) 60 Open Committee Discussion 69 Public Comment 88 Adjournment 91 P-R-O-C-E-E-D-I-N-G-S 2:00 p.m. CHAIR HEITKAMP: Terrific. So the least important part of this meeting are my opening comments. We'll keep that at 30 seconds so we don't waste any time. A particular welcome to the Vice Chair Denny Heck who is a great guy, now Lieutenant Governor. He has forgotten more about trade than most politicians ever knew. That's the good news. Number one, I want to thank everybody for their really pretty active participation in the Advisory Committee. I think we all know what we're up against in the United States of America in terms of our trade challenges. We stalled out when we refused to fully authorize the EXIM Bank and we are playing catch up because this is such a critical and significant part of our trade infrastructure. We talk about build back better. Well, we're going to build back the EXIM Bank better as well so I'm thrilled you're all here. I look forward -- you know, my email is available to anybody who wants to email ideas. What a great diverse group. What a group that has varied levels of experience with the EXIM Bank but committed to the mission of making America the number one exporter in the world and making sure that we are as competitive as we need to be for American businesses. That competitiveness is a huge initiative of this administration and I think that gets lost in the translation, the commitment that they have made. I think you see how rapidly they've moved to get the bank up and running again and I think we're a huge part of that. We're going -- I've heard from other subcommittee chairs, whether it's Sub-Sahara, whether it's Climate. At some point here I think it would be valuable, Chris, for all of the subcommittees to join together and maybe just spend an hour talking about what those agendas are and questions back and forth. There's cross-population on these boards. Many of our Board members also serve on other subcommittees so I think it would be really valuable for all of the subcommittees along with the Advisory Committee to know what is being done in each one of those categories. With that I'm going to turn it over to Chris to make his comments about where we are right now. Chris, if you could just work us through the agenda until we get back to the open committee discussion, that would be great. I have to say, you know, we've been pretty brutal about time. If I cut you off, it's not because I don't want to hear what you're saying. It's that we have speakers who have commitments in other directions and we want to make sure that we're participating fully with all our speakers. We don't want to short any of them. This is an important agenda. I may ask you rudely by interrupting you to hold your comments until we get to open committee discussion. With that, Chris, I'll turn it back to you. MR. VAN ES: Thank you, Senator. On your question about getting some integration with the subcommittees, I think absolutely we can do that. I think maybe what we can do is add to the agenda for the group's next meeting, the springtime meeting, a report and some dialogue on the subcommittee recommendations that are coming together. I think we are happy to take that on our plate on the staff side. A few updates from me from kind of what's been happening at the Bank recently. In no particular order, first, coming out of the first committee meeting, one of the items that we had promised to move forward on was organizing a couple temporary subcommittees. As Senator Heitkamp mentioned, we have our statutory Subcommittee on Sub-Saharan Africa. Then standing subcommittees on Climate and China. Those groups have all held their first meetings for the fall and have set out their own work plans. In addition to that, we talked about standing up a temporary subcommittee on Global Competitiveness with the primary responsibility being offering this group's statement, letter, for the Congressional Competitiveness Report in June. Then the second temporary group, the Whole of Government Collaboration Subcommittee with the primary responsibility of that group being to provide recommendations about how we at EXIM can coordinate with other USG agencies on deal transactions, broader financing strategy, and related topics. I think on that second point we'll be hearing more about that today. One of our speakers is Special Assistant to the President for International Economics Jen Harris. Jen is quarter backing the Build Back a Better World initiative. I think she will have a lot to say on what's happening at a White-House-led level about getting agencies to work together on financing transactions around the world. The finalization for those committees will happen in the next few days. If you are interested in serving on one of those subcommittees, be sure to let me, Lee, and India from my team know as quickly as possible. That is my update on subcommittees. The other update I wanted to flag is our recent launch of a new global development team. This has been, I think, a very regular piece of feedback that we have gotten from exporters and from several of our stakeholders. We have launched a new global business development team that we are hiring for today. The role is going to be primarily to lead outreach on our medium and long-term programs in places like Sub-Saharan Africa and in sectors like clean and renewable energy. So more to come on that but I think it's exciting for the bank to, I think, we restarting our footprint in terms of business outreach. That is all that I have but any questions for me? CHAIR HEITKAMP: Chris, I just attended an Aspen Institute Environment -- well, it's actually Energy and the Environment talking about balancing these two competing concerns. There was a huge section on financing for clean energy. I think just to look for, especially the subcommittee chair, on Energy, or on Climate, to look for opportunities for her to participate, listen in, engage. I think that would be really valuable. If somebody could give a call over to Aspen, just visit with them about how could the Bank engage with private/public partners in a more meaningful way because I thought it would have been great for the Bank to have been there and represented in this financing discussion. MR. VAN ES: Yeah, absolutely. Happy to call over there and run point on that. CHAIR HEITKAMP: Yeah, give Greg a call and just say, you know, Heidi said you guys should have a long discussion about this. We obviously think we can help export great American technology but we need to understand kind of what the geo-political landscape is in that world. MR. VAN ES: Absolutely. Any other questions or comments at the outset? Go ahead, Kathie. MEMBER LEONARD: Kathie Leonard. I thought I heard you say that there was already a subcommittee meeting for the China Committee, Subcommittee? MR. VAN ES: You're right, I did say that but, now that you mention that, I misspoke. It's next week. Sorry about that. Good catch. CHAIR HEITKAMP: The calendar was wrong and that happens a lot. Good. MR. VAN ES: You're right. That's next week. The other two have met and China is next week. MEMBER LEONARD: Excellent. Okay, thanks. MR. VAN ES: All right. If there's no other questions for me, Hazeen is next on the agenda but she just shot me a message and she's running a few minutes late so why don't we go to Dan who is going to talk through EXIM's Clean and Renewable Energy Financing, and then we'll come back to Hazeen. Dan, are you there? MR. TOBIN: Yes, I'm here. Hey, Chris. I'm just going to pull this presentation up. Hopefully everyone can see it. Just give me a thumbs up if you can see it. Okay, awesome. Great. Hello, everyone. My name is Dan Tobin. I'm the managing director in the Power and Environmental Exports group which is within -- it's embedded within the Structured and Project Finance Division here in the Office of Board Authorized Finance. Today I'm just going to talk very briefly about EXIM's Climate Program and talk about the authorities that we have under this program in order to make financing for clean energy and renewable energy power projects. Just to give you a little bit of an overview, under the OECD regs we are able to offer wind, geothermal, tidal, solar, ocean, biogas, and hydro power projects repayment tenors of up to 18 years. For waste to energy, district heating, combined heating we are able to offer repayment tenors of up to 15 years. For all other power projects we can go to 14 years. This is a little bit more than we would typically be able to provide so there is some benefit for the projects falling within the renewable energy bucket. In the past decade we've authorized $2 billion plus in renewable energy and conventional power exports and billions more in commodity exports. We have three different types of structures that we evaluate in our group. We, of course, are always looking for reasonable assurance of repayment for our projects. Depending on the project either finance it as a corporate finance structure where we rely on the balance sheet of the company that's going to be borrowing, or we could structure it as a limited recourse project finance structure where we rely on the contractual natures of the contracts. We look at revenue-generating agreements such as the off takes. We evaluate the engineering, procurement, and construction contracts. We look at the O&M contracts. All of this builds into the overall credit of the project. For projects that don't really kind of fit in either the corporate finance or the limited recourse project financing bucket, we can also structure it as a structured financing which is a bit of a hybrid approach. MR. VAN ES: Dan, just to pause real quick. I just got a message they are not able to see. Does anybody -- can other folks see the chart? PARTICIPANT: Yes. MR. VAN ES: Okay. PARTICIPANT: Yes. MR. VAN ES: Gene, let me see if I can -- I'll try to email it to you. MEMBER CORNELIUS: Okay. MR. TOBIN: Sounds good. Okay, I'll continue here. So in terms of the standard structured and project financing, we are typically looking for projects that can provide significant skin in the game. That is, that the project sponsors are able to provide a significant quantum of equity of their own cash into the project. That allows us to get comfort that if there are problems with the project, that they will actually come in and help and ensure that the project is going to either fix those issues or make sure that the project meets its completion requirements. Depending on the structure of the project, when there's significant commodity risk and significant market risk, we typically look at leverages of 60/40, 65/35. When we have very firm off-take agreements where we can rely on the long-term power purchase, we can definitely bring the leverage up. Maybe sometimes it's not unusual to see an 80/20 or 75/25 debt equity structure. A lot of these projects in the climate finance arena we're looking for significant liquidity and debt service reserve accounts. Minimum of six months for service reserve accounts. We typically for projects that have a lot of market risk we may need to increase that reserve account from up to 12 to 18 months. It really does depend on the project and the risks associated with the project. We are always looking for credit enhancements from the sponsor. Completion guarantees are very important from our perspective to ensure that the project gets built. We also are looking for credit worthy EPC contractors so that we can look for and find ways to mitigate construction risk. In standard structured and project finance we are looking at market risk for sure. If there is market risk, we're looking for ways to mitigate that market risk either through floor price guarantees, through hedging agreements, something that helps show us a reasonable assurance of repayment to our Board of Directors. Obviously the stronger the project sponsor, the more successful we believe that the project will be so we do look for capitalization of the project sponsor. We evaluate regulatory risk, we look at operating risk and, of course, financial risk. I won't get into the details because I know I only have a few minutes here to give you a presentation. What I would like to do is really focus my discussions on the types of technologies that we've been trying to focus our financing on in the future. Right now with renewable energy there's this significant push to deploy utility-scale energy storage so that it can help provide electricity to the grid when the wind is not blowing and the run is not shining. That's why we feel that energy storage technologies are going to be the future and over the next decade there's going to be significant investment in this space. Right now in the U.S. we have three big players; Tesla Energy which is now manufacturing a Megapack which can be used for utility-scale storage. We also have ESS, Inc. which is manufacturing iron flow battery systems. And we have a new player in the game, Eos Energy Storage. They are a new company right outside of Pittsburgh, Pennsylvania, and they are looking to deploy zinc hybrid cathode technologies overseas. So in the past we've worked on projects around the world. We've done many, many solar-power projects in India. We've used primarily our main exporter which is First Solar. They manufacture cadmium telluride thin film panels out of their manufacturing facility just outside of Toledo, Ohio. For this project we provided financing. This project, or series of projects, provided up to over $200 million in debt financing to build solar power projects; Azure Power, Solar field, and Dahanu Solar as well. In the past we've also worked and financed wind power projects. In Costa Rico we provided a $61 million Direct Loan for a 17-year facility for Orosi Wind Power. We've also provided debt financing for a 32-megawatt wind power project in Peru using Gamesa and Siemens wind energy turbans. So, in summary, EXIM's support really has been the catalyst that helps bring in equity and crowd-in hundreds of millions of dollars in investments to these projects. It helps our exporters also find buyers who are willing to, and able to, borrow to finance projects. We found that EXIM financing is usually the most cost effective source of financing for international customers to purchase US-made technologies and services. What we discussed with our EXIM's Council on Climate just this past month, we talked about some of the challenges we face in this space. Ultimately we are looking for this new EXIM's Council on Climate to help EXIM figure out ways to source and facilitate the submission of bankable deals. One of our challenges is finding credit-worthy counter parties that are able to provide debt finance or provide the projects that can provide a reasonable assurance of repayment and that's what we are ultimately looking for. We have found in the past that many of the sponsors have identified issues such as OECD pricing, local cost coverage issues, and content requirements as some of the barriers that have made them unable or unwilling to move forward with EXIM financing. So, with that, we have challenged and asked the Council on Climate to kind of evaluate those issues and propose solutions to us and propose solutions to help overcome some of these specific challenges to make EXIM more competitive in the global clean energy market. With that, that concludes my presentation on some of our climate work here at EXIM and I welcome any questions. Thank you. CHAIR HEITKAMP: Does anybody have any questions? We've got some hands up here, sorry to say. Dan, can you get rid of your screen share? MR. TOBIN: Yes, absolutely. CHAIR HEITKAMP: Thank you. Then we can see. Questions? Denny, you have a question? MEMBER HECK: I do, Madam Chair. Thank you. Dan, is nuclear in your portfolio? MR. TOBIN: Yes, nuclear is in our portfolio. We do finance nuclear power projects and we are looking to provide financing for many projects in Eastern Europe. We are looking at projects all over Eastern Europe and also in Latin America as well. MEMBER HECK: Thank you. CHAIR HEITKAMP: Do you have a particular reason for asking that question? MEMBER HECK: Well, we were talking about clean and renewable energy financing and he did not mention nuclear. There's obviously a growing body of literature and research that is full of optimism, I don't know how realistic it is, about this being an important part of our efforts to deal with climate change and I was just wondering what their level of activity was. CHAIR HEITKAMP: To add to that, Denny, I've asked the Chair. We have on the Climate Subcommittee nuclear represented but we don't have carbon capture and sequestration represented and so I've asked them to add that factor in. I would encourage everyone on the Advisory Board to look at the membership, look at kind of the direction. If there's a clean energy course, by that I mean carbon neutral source that you can recommend, I think it's important that we do that. There we go. For some reason my banner is up and I can't see names. If you can just jump in, that would be great. CHAIR HEITKAMP: Venkee Sharma. There you go. MEMBER SHARMA: I wanted to understand, you know, on the climate side. You touch on it through waste energy but, you know, water and waste water is part of the transformational export. You know, it intersects, for example, on the international market. Many projects are both part of energy migration of solar plus things like desalination. I just want to understand where water and waste water facilities that may be on a concession type basis finance projects fall. Does it fall within your portfolio? Because that always seems to be sort of a gray area. MR. TOBIN: That's a great question. Yes, absolutely we can finance both, water and waste water. It does typically fall within our Global Infrastructure Division because many of those projects are structured with sovereign guarantees from the Ministry of Finance. But for those projects that don't have that, which I'm not aware of any, it really does fall within our Global Infrastructure Division so we can finance that. CHAIR HEITKAMP: Brad, you're up next. MEMBER MARKELL: Thank you. I was just looking a little bit on the domestic content stuff around Tesla and wind and how -- you know, where we stand on information all the way back to cathodes in this country. Cathodes for Tesla power actually coming from probably South Korea, or Japan given their partner. I think if you dig back in the Siemens Gamesa and Tesla supply chains, you'll find out that there's a fair amount of stuff coming from overseas in terms of the gensets and so on so if you could tell us a little bit about that. I think we have a great opportunity given the legislation that's in front of Congress right now to change the supply chain situation. It's a pretty hefty incentive for establishing supply chains in the U.S. so I thought I would just toss that open and see what you have to say about that. MR. TOBIN: Yeah, that's a very good point. I mean, it's really hard. I mean, we can finance the U.S. content piece so whatever U.S. content does exist. We are aware for the Tesla Megapacks that there is significant U.S. content, over 50 percent. For Eos and for ESS, which are the different iron-flow and medium-flow batteries, those projects have significantly more U.S. content. Yes, I mean, we're always aware that there's other supply chains coming in, and Koreans and others are also participating as well. Thanks for that point. CHAIR HEITKAMP: Anybody else? MEMBER FERGUSON: This is Rodney Ferguson. I have a quick question for Dan. What is the Bank doing to market the renewed or heightened interest in clean energy exports. I know in some of my conversations with folks far away from the beltway in clean energy manufacturing, they very often are unaware of the Bank's interest. Now with renewed interest what is the plan to try to spread the word, if you will, about the new opportunities? MR. TOBIN: Great question. Yeah, I mean, our group is very active in working with project sponsors and exporters to kind of identify new technologies that are coming onto the market place where we can actually finance them. One of our challenges really has been finding manufacturers that have significant U.S. content such that we are able to finance it. We are certainly looking for new opportunities with the project developers. We are reaching out at conferences and we do believe that this new international business development group that is being set up will certainly have an opportunity to help assist us in building up this pipeline. With that, let me pass that to Chris and see if Chris has more to say on that front. MR. VAN ES: Yeah, I think the end of your point hit the point on the head, Dan; starting a new division focused on business outreach. The hope is to solve exactly that problem, Rodney. A key part of that team's work is going to be on clean and renewal energy. We see the same problem that you outlined. MEMBER FERGUSON: I would just encourage as the new group is set up to think about ways that the Advisory Committee and the subcommittees can be used. Just as an example, I'm in Arkansas all the time and, you know, it happens occasionally I'm in front of business groups. To be able to arm us with information, or even to -- I would be more than happy to go talk to some of the folks at the Arkansas chamber about trying to use that and other business venues in Arkansas to get the word out. I know there are clean energy manufacturers in the state that are completely unaware of EXIM and its support for clean energy manufacturing. Please deploy as you see fit. I would be delighted to help but I'm sure many others on the committee would be delighted to help as well. MR. VAN ES: That's a terrific point. I think there are a couple tactical things that we can do very easily in terms of getting you materials. Then I think maybe there are a couple broader questions that I would love to talk more offline about how we take that on in a holistic way. MEMBER FERGUSON: Yeah. MR. VAN ES: But, yes, we can at least in the short term make sure that you have a distilled version of our financing offerings in this space and would love to keep that dialogue going with you, Rodney. CHAIR HEITKAMP: Kathie. MEMBER LEONARD: Yeah. Just to add on to that, I don't know if you are familiar with the International District Energy Association. We belong to that -- well, we're not members exactly right now but we are going to be exhibiting at their conference in Boston in February. That's where a lot of the manufacturers of the equipment for these are, and it's a campus energy form. I don't know if you are familiar with that but I would be glad to pass that along to you because it would be great to have information there. We have a booth there so we could pass along information that you give us on that. MR. VAN ES: Yeah, that would great. I think to the extent that there are opportunities like that, and speaking opportunities, we are happy -- whether it's me or Dan or a member of our Board -- happy to try to say yes to as much as we can. MEMBER LEONARD: Great. CHAIR HEITKAMP: Chris, just to close out this discussion, I think maybe a packet, kind of an advocacy packet that could go out to every one of the Advisory Board members so that you say, okay, you know, you're going to go talk to -- get yourself in front of the Rotary, whatever, or the export agency, and then just kind of push out way in because we all know people in our state. Have the staff think about an advocacy package and maybe put that on the agenda and we can go through it. We want to make sure that we're adequately representing, but we're value added for you getting the word out for business expansion and development. MR. VAN ES: Absolutely. We can definitely get an advocacy pack together. That should be easy for us to do. CHAIR HEITKAMP: Okay. MEMBER MARKELL: Madam Chair, if I might just add, over the next year or so, we're going to have a fair number of announcements for the Loan Program Office about standing up clean manufacturing energy site here. That's going to be a real source for us. CHAIR HEITKAMP: Okay, great. We're going to have to move on. Chris, what is next given we jump line here? MR. VAN ES: We did jump the line and I see Hazeen is on so we're going to go back to her. I will mention to the group there will be time for open discussion towards the end. We have a couple of speakers that are very time limited so we are at least going to try to keep the presentations very focused and on time. Hazeen, are you there? MS. ASHBY: I am, I am. I apologize for being late. I am sorry about that. There's a lot going on. I'm Hazeen. I think you guys might remember me from before. I run our Office of Congressional and Intergovernmental Affairs and am our White House liaison. I'm here to give you guys an update on what's happening with our nominations. I know it's upper-mind for most folks. The Senate is extremely busy -- extremely, extremely busy right now. There's a lot they need to do. Time is not our friend right now. I think as every day kind of ticks by I might be losing a little bit of hope that we will see our nominees come in before the end of the year. I do know -- I just got off the phone actually with some friends over there -- that they are thinking about -- the Senate was suppose to go on recess starting tomorrow. That is not happening. They are also thinking about adding some more days but where do we stand right now in the Senate? A deal has just come through to raise the debt limit which needs to be done by November 15th and they are doing that by using basically a loophole in the Senate rules to be able to do that. Then they need -- Majority Leader Schumer also needs to pass the National Defense Authorization Act, NDAA. Then there is also hope that the Build Back Better Bill will get passed around Christmas, or before the New Year. With those things looming, that means it will take quite a few days of floor time. Right now our nominees, our EXIM nominees, will require a floor vote. I don't believe that they will be able to go by unanimous consent so it is going to be interesting to see what can be -- what nominees, or which nominees I guess, can actually make it to the floor because that also takes time. In speaking with the folks that we know and how things are playing out, I am starting to be -- I was more hopeful that we were going to get in before the end of the year, but right now I'm thinking that we will probably get in sometime more like mid-January because we do have -- because one of our nominees is the head of an agency. I just don't think that we will probably have the time. Right now sadly the administration has the least amount of folks who are being confirmed and there are like over 250 folks who are still waiting for confirmation in the Senate and the schedule is just jammed packed. CHAIR HEITKAMP: Hazeen, could you tell us all these nominees have been moved favorably out of the Committee, though, right? MS. ASHBY: Yes. We have four nominees pending right now in the Senate -- three. Ms. Reta Jo Lewis for our Chair, Judith Pryor for Board Member, and Owen Herrnstadt for Board Member. We are marked up and moved out of Banking Committee the beginning of November on a voice vote with only three people asking to be recorded as no; Ranking Member Toomey obviously, Senator Lummis, and Senator Hagerty. They have been awaiting a floor vote for a while. Then we have an IG nominee. We have the longest opening for needing an IG in the USG of six years. She actually just had a hearing on Tuesday. I expect for her to be marked up next week and then she'll be available to go out. I think there is more support on the Republican side to pass her, but I do not believe that the Dems will allow her to go without bringing any of our Board nominees along. I think she will also have to wait until we see our Board nominees going forward. CHAIR HEITKAMP: My point is these aren't controversial, at least at this point, unless somebody gets a bee in their bonnet. It's just timing. MS. ASHBY: So I'd like to make -- it's timing. They are controversial in the sense of, as you know, Senator, at the end right before every recess, and usually right before the end of the year, there will be a whole big list of nominees that have been able to clear their committees by unanimous consent. I don't think that we'll be on that list because they are controversial in that there are Republicans who are insisting that they have a floor vote. In that way they are not uncontroversial. CHAIR HEITKAMP: Right. But my point is they want a floor vote because they don't like the EXIM Bank. It's not your nominees, it's, you know, too many would just as soon drive a stake through the heart of the EXIM Bank. MS. ASHBY: Exactly, exactly. That is true. Sorry, I misunderstood. CHAIR HEITKAMP: Okay. Thank you, Hazeen. MS. ASHBY: You're welcome. You're welcome. CHAIR HEITKAMP: You bet. Whole of Government. Pat, are you with us? MR. KIRWAN: That I am. Hang on. That I am. Let me share my screen here. MR. VAN ES: While he's doing that, Pat Kirwan is a good friend of the EXIM Bank at the Commerce Department, works on commercial advocacy, and one of our closest working partners. So I'm very happy to have him here today. Pat, I can see your screen. MR. KIRWAN: Okay, excellent, good. I got some weird things below. Hopefully, that won't be a problem. But yeah, thank you for inviting me to be here today. And I'll talk a little bit more sort of -- and a number of you, by the way, I do know. And so it's great to see everybody here and to reconnect again and in particular Gene Cornelius. Worked with him both when he was at SBA and he's been very supportive of us at Milken out in LA as well. So I'm going to talk a little bit about the Trade Promotion Coordinating Committee about mechanisms to coordination. But most important, I'm going to spend my time on the upcoming National Export Strategy. So just to make sure everybody here is aware of sort of where we're headed in terms of the administration's priorities and how that relates to EXIM Bank and your advice today. So the TPCC itself was established under the Bush Administration originally through a presidential memorandum. But then Congress liked the memorandum and established it in law in '92, and really focusing on coordination, customer service. We're supposed to a report each year. We actually have not done a report in the last administration. So we haven't done a report since 2016. So we are going to have one this year, and I'll talk about those priorities in just a bit. And just moving forward here, the TPCC itself, the structure is a classic interagency structure. So we've got a set of principals at the top. And I would say EXIM Bank has had a long history of working closely with us on that. And the original TPCC -- and probably Jim Cruse and I are the only two who remember this. But Ken Brody was the deputy with Ron Brown back then in the very creation of the TPCC. But there's a set of agencies. The way they (audio interference) here is you've got a set of oversight agencies which include OMB, the NSC, NEC, all of those. You've got the sectorial focus agencies that are members. So you have the, like, energy and transportation. All have international arms that work very closely with. So for example, right now we're in an ongoing discussion with the Department of Energy over the Brazilians want to do a rail project across Brazil over to Chile, over to the west coast there, to the Pacific Ocean to be able to transport goods over there. And they're very interested in U.S. rail technology, for example. So we're in discussions with them and Department of Transportation experts on sort of setting up a regulatory regime. What are some -- the rule of law, contracts, sort of the enabling environment to be able to do those transactions. And then the Brazilians are interested in coming up and actually talking to U.S. companies and see who would be interested in potentially participating in those. As sort of an example where transportation gets involved, we have the same thing going on with energy and a number of the other agencies listed there. And then the middle section there, or really the core TPCC agencies which include, of course, EXIM Bank, SBA, you know most of these agencies that all have programs that help U.S. exporters in some way, that directly interface with U.S. exporters. And then the last over on the left-hand side is the policy focused agencies like USTR, Department of State, and Commerce. Commerce and State are a little bit in both the services as well as the policy focused area in kind of what we do. And I'd be glad to take any questions if anybody has any questions about specifically tools that any of those agencies have. I want to spend a brief section talking about -- a brief moment talking about the National Export Strategy. So we had a TPCC principals meeting last Tuesday. And we had a number of the cabinet officials on that call or on the Zoom meeting that we held and really went through a set of priorities for this coming -- for the next couple of years for the administration. You've already talked about a couple of them. Clean technology is obviously one. There's -- across the agencies, there's really a desire to think about clean technology and to how we can use U.S. technology to help solve the climate crisis or climate issues that are going on around the world. And a lot of this, you've already discussed, wind, solar. There are areas out there where we're not as competitive as we should be. And so working a lot with the Department of Energy, working a lot of with John Kerry -- Ambassador Kerry and the SPEC team over at State to try to help make sure that U.S. companies and technologies that are coming out of the DOE labs, for example, that we make those companies aware of opportunities overseas and try to help them. A lot of it, you've already discussed about the battery storage. We're seeing all kinds of opportunities overseas for companies in the battery storage area. The other one is hydrogen. We're seeing an awful lot of hydrogen projects overseas. But really we want to use this, develop a strategy to more systematically reach out to these companies and also be able to identify some of the emerging technologies that's coming out and making sure those companies are up to speed and are thinking about going international. The post-pandemic recovery, here we're really talking about a couple of sectors that have really been hard hit by the pandemic. Travel and tourism, education are two that just leap to everyone's mind. So we are going to do work around projects specifically in those to help those two sectors. Advanced manufacturing is another one we're very interested in and really trying to help those U.S. companies in the manufacturing sector that have been hit by the pandemic and helping them to go overseas. But in particular, again, you spoke about the big focus on innovation and U.S. technology. And there, we bring in things like the manufacturing extension, the NIST and the manufacturing section partnership in some of the other agencies. And then the middle group is small business and undersized communities. Most of you know that there's a big focus we have on reaching out to communities that before haven't really been engaged by the export by our exporting programs and trying to reach in and develop partnerships with a number of institutions in those communities. Try to reach down to get more of those companies involved and going international or at least getting government assistance to go international. The next piece is the innovation ecosystem. There's a lot of -- I've already talked about it on the clean tech side. But nationally, we've been a bit frustrated that there's a couple of programs out there, the Small Business Innovation Research program and a few of those programs that are using taxpayer dollars. And I've been on panels with these companies, and they're amazing with the technology and the things that they're doing. And we need to really do a much better job of getting them international and getting them exposed to international opportunities and helping them to go overseas. So that's a bit of what we're focusing on there. And the last piece is, again, it's kind of related to the pandemic. But certainly farmers and fishermen and ranchers have been extremely hard hit during the pandemic and also with the current supply chain issues. And sort of how do we help increase focus on those communities as well to help them getting into exporting. And then the last thing is just the TPCC secretariat itself which I'm charge of. We do have a number of programs that we do too, a couple that I'm just going to quickly highlight. One is Startup Global. We are making a concerted effort to reach down into, like, incubators, into the earlier stage companies to try to help them to think about exporting. And this is something we've had a bit of success on is early on getting companies to think about how they can grow because they're all wanting to scale quickly. And one of the ways a lot of them do that is they're thinking internationally from the get-go and how do we help provide them kind of assistance in that area. And then the DC Central Deal Team, and so we do have a deal team. We've now with the State Department are running deal teams in 150 embassies around the world. In about 70 of them, we're having -- there's 78 of them Commerce leads on and the rest of the State leads on. It's really to help make sure the embassies are keeping track of what opportunities there are on projects overseas. And then how do we make U.S. companies more aware of those projects at the right time because many of them aren't really right for business yet. And then helping them to bring them into the system. And so with that, I'll stop and take any questions that folks have. CHAIR HEITKAMP: Thanks so much, Pat. Denny, you have a question? MEMBER HECK: I do, Senator. Thank you, Pat. Thank you so much for your presentation. Obviously, the National Export Strategy is predicated on the furtherance of a bunch of our priority values which set forth. I'm wondering if furtherance of democratic values is ever at least a talking point or a consideration in this, asking that in an era of a rampant increase in authoritarianism around the world. MR. KIRWAN: Yeah, that's a great question. And so the short answer is yes. So there's two areas. I didn't -- I think in my previous slide, I was very quick on covering. But we do have an area in here that we're going to be really focusing on that deals with overseas infrastructure projects. So I talked about the deal teams. But even underneath that piece and some of you've heard a little bit about B3W, really wanting to do certain technologies like 5G and other areas, really focusing on trying to promote rule of law, promote good governance, promote sort of anti-corruption practices, all those sort of values that we adhere to here as part of our ability to offer developers in countries access to assistance. So certainly that is a factor that's coming up more and more often interagency about how we choose, how we use our resources. MEMBER HECK: Thank you. CHAIR HEITKAMP: Other questions? I have one if no one else does. I'm curious about how your National Export Strategy, the engagement with state-level organizations, whether it's state export-related organizations, governor's offices, kind of sub-national groups. MR. KIRWAN: Yes, so I'm smiling because we just -- we do a monthly call with all 50 states. So we just did one yesterday where we had all -- and EXIM has been a great participant in all those with your reach program. But really engaging them because they can be great multipliers for us. You talked about, I think, earlier, the conversation was about what's going on in Arkansas. And the Arkansas economic development folks that do international trade have been just a great asset for us as well as those in other states. So we really do want to take advantage of those. And we're going to talk a little bit about that in that supporting small business in underserved communities portion of it. We are going to have a bit there. The all 50 states are supposed to export plans with the export assistance centers around the U.S. And those plans are supposed to be delivered to me in February. So we do try to organize ourselves and try to force conversations between the USEACs and the states on how they're going to approach international over the coming year and how they're going to work together to help U.S. exporters. And so that's an important piece here. And Chris, I do think that we need to bring in your new business development people. If they have a domestic focus at all, they should be a part of those conversations as we move forward. So thank you. CHAIR HEITKAMP: You bet. Other questions? Comments? We have just a few minutes left in this segment. So, Pat, I would just ask you, if you have four years where no one did an export strategy for the county. Obviously, you're playing catchup. What can we do to assist you in implementation of that strategy once this is moved forward? MR. KIRWAN: Yeah, I do think your earlier conversation about the outreach and sort of your connections in the local business community, I think that's the kind of thing that could be very helpful is to be multipliers with our expert assistance centers as well as the EXIM Bank of new business development folks. I think you could be a great way to sort of communicate to other businesses about the resources that are available to them -- CHAIR HEITKAMP: Terrific. MR. KIRWAN: -- to get assistance. So thank you. CHAIR HEITKAMP: Terrific. Barbara, do you have a question? MEMBER BUCHNER: Yes, thank you so much. And thanks so much, Patrick, for the presentation. Very helpful. I think just one comment on connecting to innovation ecosystem, to the export ecosystem. I do feel it will be also good just like to then connecting it back to the finance system. So EXIM obviously being an extremely important part that. But I think having kind of a better understanding of how the different types of investors, financial institutions link to the innovation ecosystem and the export ecosystem I think will be good. So I'd be curious just to hear whether you've been thinking about that. And again, I think also following up, Senator, on comments, like, how we can help on the outreach and the connections. MR. KIRWAN: Yeah, that's great, yes. Yeah, certainly the financing is such an important component to every time we do one of these outreach sessions with the ecosystem. The SBIR program is nice because that does provide some financing. But the exporting finance piece, it's a bit tougher on the federal side because there's -- you have to be in business so many years, both for SBA and EXIM. So that is something that going to have to potentially address or figure out how we help these companies navigate that. CHAIR HEITKAMP: Terrific. Thanks so much, Pat. And we look forward -- MR. KIRWAN: Thank you. CHAIR HEITKAMP: -- to seeing more of you. Obviously, everyone on this Advisory Board would love to see the end product. And we're glad that EXIM is participating in an export strategy. You're talking to the governors, talking to the states. We look forward to that strategy and then helping implement that strategy. MR. KIRWAN: Yes, thank you so much. I appreciate your help and then your service on this Advisory Committee as well. CHAIR HEITKAMP: Okay. Thanks so much. MR. KIRWAN: Thank you. CHAIR HEITKAMP: Yeah, Chris, you want to go ahead and introduce China Transformational Exports Program. MR. VAN ES: Yeah. So our next speaker is our head of China -- the China Transformational Exports Program, Adam Frost. Adam is going to give us an overview of his team's work. They're a newer group, incredibly important mandate for the Bank. I will offer one caveat that Adam's presentation is running into our remarks from Jen Harris. So if Jen pops on kind of mid-presentation, Adam, we may have a little intermission in the China discussion to hear from Jen on B3W. (Simultaneous speaking.) MR. VAN ES: Adam, over to you. MR. FROST: Chris, I won't complain if you give me the hook. MR. VAN ES: I hope that won't be necessary. MR. FROST: Senator, Advisory Committee members, it's a real pleasure to speak with you all today and give you a short update. I will try to keep this immensely short to prevent getting the hook myself. Last time I had the pleasure to speak with the Advisory Committee, I was thinking it had been maybe a month into the job. And there was a question of the C4 team had sent the chair of the Advisory Committee some recommendations about where the China Transformational Exports Program office should focus its time and attention. So what I thought would be good to do is just give you sort of a sense of where we are almost a year in for the team, right? I'll explain to that on the next slide. And if I could leave you with two thoughts, it's really, number one, I think we are making serious progress at EXIM in operationalizing the program. Taking the mandate from Congress and turning it into a living, breathing thing that EXIM does on a day-to-day basis. But the other critical part I want to make sure I leave you with is that this is absolutely 100 percent a team effort across all of EXIM. I may be the accountable official for making sure that the program is on track and moving. But I have to say it would not be possible without the immense support from literally every division in the Bank. And I'll show a slide and give you a sense of some of the accomplishments made in recent history. But I want to make sure that it's clear that we here at EXIM, the program is and the mandate is for all of the bank, not just a tiny little program office. So oops, forgive me. I now am showing my email. That was not the intent. So is my slide coming through? I'll take that as a yes, I hope. MR. VAN ES: Yes. MR. FROST: Great. CHAIR HEITKAMP: Yes. MR. FROST: So I did spend some of my formative life in the Pentagon. Thus, I must create PowerPoint slides. It is a sort of genetic requirement of me. But at the end of the day, the measured effect of this for the CTEP Program is transactions, right? So on the left side of the board, you'll see a sense of what we are reporting up to Congress was accomplished in the fiscal year '21. As you can see, the volume of transactions to be done in the transformational export areas mostly had to do with the short term which you should expect, right, high volume but not necessarily high dollar value. But high volume transactions and the OSB team has been absolutely tremendous in sort of how they moved out in implementing the mandate. But I'll draw your attention that we've had a few preliminary commitments of the high dollar value, right, which have to do with activities with Ukraine which fall in the high performance competing category. Our deal of the year was a solar deal which falls into the renewable energy portion of the TEA mandate. And I know that there's a lot of discussion about the Senegal transaction Weldy Lamont which I'm happy to give some more details on if folks are interested. But I show those small stats on the left-hand side to say we are making progress. The Bank is not sitting still. We are moving in the transformational export and China competition domains. A lot more has to be done. But I'd say it's not too bad for a first few months. And the reason I saw that is because of a lot of what has to happen when you do program development is you have to do institutional upgrades to make sure that the organization can implement. So myself, I joined the team at the end of January of this year, so at the beginning of Q2. And the two other vice presidents on the team moved over to -- one joined at the same time I did and the other moved over at the end of Q2. So by the end of Q2, we sort of figured out where the elevators were and delivered our implementation plan to the acting chair. And so in about over the last six months, everything you're seeing we did was accomplished over the last six months. So we defined what a transformational export area actually was. We invented the business processes necessary to help move CTEP transactions into the DNA of the organization. And that includes both working on policy agreement with OBAF on how we develop interest but also doing CTEP determinations through the TRC process and up to board level decision making. I'd say a huge lift which often gets unsung is we developed the requirements and actually upgraded internal EXIM software which for those who've been in government IT before knows that is no easy lift. And I have to seriously thank my CIO colleagues for moving out with such alacrity to see the kind of institutional upgrades and allow us to scale this over time because if our system don't do this, then we're basing everything on Outlook and PowerPoint. And it's really not an effective way to run a railroad. I'd say our integration with the interagency is improving, particularly on the China competition elements of this. I think we could give some examples. So my colleagues can talk about some examples with Lithuania and a few other ways. Pat Kirwan is a great partner as well as our friends at the NSC, State Department, Defense Department, and some other places. And I was very proud of this last one. Of course, we did a complete website overhaul which was no easy thing as well. We had to come up with a design. And obviously, that is not our specialty. So I share these few data points, and then I'll try to get off the stage quickly to say that we are working very hard to operationalize and institutionalize this program. We're very excited and it's a function of the partnership across the Bank. So I will pause there as I did not get the hook and either answer any questions or be happy to discuss anything we're doing. CHAIR HEITKAMP: Questions? Pretty important stuff. Anyone? MR. FROST: It's nice to go at the end of a long meeting. (Laughter.) CHAIR HEITKAMP: Well, obviously, the focus in Congress has been on this competitiveness and been on as we look at China more in the lane of national security. The trade/competition piece is going to be critical. I'm wondering what the initiatives that are coming out of Congress, how that will affect the work you do. MR. FROST: That's a very good question. I think the shortest thing to say is we'll have to keep an eye on it. I mean, Hazeen leads the OCIA team, I get maybe three emails a week from her team about, hey, did you hear about this, hey, did you hear about that. But I know that we're on top of it. But I think it's an evolving landscape at the end of the day. And so we have to invest in an immense amount of human capital talking to our colleagues at NSC, State, DoD, IC, and Commerce and USDR to make sure that EXIM stays in sync. CHAIR HEITKAMP: Yeah, if there's a place where we need to keep focused on whole of government, it's here. The interest people have of accessing markets, I mean, it's a huge market. But it also is a dangerous market to access given what we're seeing now with supply chains, pharmaceuticals, just the aggressiveness of the Chinese right now economically. So -- MR. FROST: Yes, ma'am. CHAIR HEITKAMP: -- other questions? (Simultaneous speaking.) MR. FROST: I suppose I'll say -- MR. VAN ES: Adam, do you want to share a bit more on the Weldy Lamont deal as I think it's kind of emblematic of a greater issue taking place in Sub-Saharan Africa. And I think in our view I think can be a testament to the role that EXIM can play and the role that the U.S. federal government broadly can play in helping American companies compete and win in some of these key markets. MR. FROST: Absolutely. Glad to do it, Chris. So for those who maybe remember this from last year, but it sort of came to a head over the last fiscal. The short version is a 20-person company out of Chicago named Weldy Lamont had won a rural electrification project in Senegal fair and square back in about 2019. The competitor consortium Hertz which was also a Chinese-led consortium with a few other people involved never stopped bidding. In typical practice which I know some of you are aware of, the ambassador never stopped the pressure. The company kept coming back and pressuring the Senegalese government. Our ambassador obviously did a hell of a great job trying to keep things on track. But when COVID hit, tax receipts started drying up. And the Senegalese government looked around and said, listen, we'd rather stick with what we've chosen, but that financing package is starting to look a little more attractive. Is there anything you can do? And so because of the authorities that we can use under the CTEP program, EXIM didn't match. That's a very important point. We did not match the Chinese financing offer. We offset it simply by extending the tender of the loan by about three years. And that allowed the American company to keep -- the Senegalese looked at us and said, hey, you're working with us. We appreciate it. The great heroic work of the underwriter team that pulled this off cannot be understated. And the American company kept the bid. It actually expanded it from about an 87 million dollar contract to a little over 100 million. It increased the volume of exports. It supported by our estimates about 500 jobs across 14 states in the States. And then it's going to provide rural electrification somewhere between 160 to 300,000 Senegalese villages, none of which are on the grid. Some of them are very small with a decent amount of renewable energy solar based activity happening. So across a number of activities from China competition, Sub-Saharan Africa, supporting American workers, small business. It's a very nice story for the kind of role that EXIM can play. CHAIR HEITKAMP: Well, and just reminding the folks who would do business with the Chinese that they're trying to repossess the Ugandan airport. So just saying. MR. FROST: Yes, ma'am. Yes, ma'am. CHAIR HEITKAMP: Yeah. MR. FROST: And the last plug I'll make before I think I have to depart you is to say that we also have our inaugural meeting of the Chair's Council on China Competition on the 14th. So Senator, the Chair will be Admiral Roughead. And I'm sure there'll be points where you and he have to have conversations in the near future about the Advisory Committee and the subcommittees and ways we can all work together. CHAIR HEITKAMP: Terrific. Thanks so much, Adam. MR. FROST: It's my pleasure. I'll stay on for a few minutes but then I'll drop off and let the important work continue. CHAIR HEITKAMP: Yeah. Is Jen here? MR. VAN ES: I think -- MS. HARRIS: Yeah. MR. VAN ES: -- so. Jen, are you there? MS. HARRIS: I am. Can you hear me okay? MR. VAN ES: We can hear you. And thank you for taking time out of your afternoon to join us. I know that you have a hard stop at 3:15. So I will just give the floor to you. Have prepped everybody for conversation on Build Back Better World. MS. HARRIS: Wonderful. And apologies. I assume that you all are -- at least looking at each other through a screen if not in person. And I apologize that I can't say the same. But I'm so glad that I can just give you a little bit of insight into all the work that we've been doing to build out Build Back Better World or B3W as it's called. And just a few highlights and happy to take any questions after. I don't need a full ten minutes to say what I want to say which is briefly on the what. This is a global infrastructure partnership launched by President Biden and G7 partners at the June G7. And it is designed to meet the climate, digital, health, and gender infrastructure needs of the low and middle income countries through transparent high standards infrastructure. I would say that this is all with implicit contrast to China's Belt and Road Initiative which often focuses on some of those priorities and does so in a fairly non-transparent manner. But we want to be quite affirmative in that way that we talk about this. So the implicit part of the contrast I think is also important. Now onto the how. This is really about developing new muscles of coordination and habits of coordination internally within the U.S. government as well as across the G7. Not too, like, long here, I would hope beyond the G7, bringing in countries like Norway and Australia that have tend to offer around infrastructure financing, especially in their regions, even if they're not G7 members. So this kind of how this relates to the President's domestic infrastructure focus. We really do see G3W as the kind of expert competitiveness arm of both of the infrastructure bills that we have passes and we are trying to pass. And we do think that kind of our domestic investment in infrastructure, especially around clean technology, will develop U.S. expertise that we should really be thinking hard in B3W about how we can capitalize on for export competitiveness purposes. We are obviously -- whatever else it means, it certainly means creating new opportunities for U.S. companies and goods, both in existing sectors and in things like hydrogen where we need to figure out what export competitiveness looks like there and not just with respect to hydrogen infrastructure but for the kind of supply chain, the electrolyzers upstream as well. And I think EXIM's role in this aspect in particular will be critical around the nexus of improving the competitiveness of American companies and increasing the use of U.S. equipment and service in international infrastructure development. I just wanted to make sure if you heard nothing else, you hear that piece, that you're really sitting I think at a critical nexus between our domestic aims and our global competitiveness aims of how all this fits together. Two further points and then I'll stop talking. One, I think we really do want to take the -- use all available tools across the U.S. government to really take a risk-based approach that promotes innovation and really supports the timely delivery of infrastructure development. And in some cases, this is going to mean asking departments and agencies and other tools to take on more risk than they traditionally have or go about their approaches slightly differently, thinking about things like how you structure contracts to make use of more demand pull type mechanisms, especially around clean technology and the newer technology that we really do see scale happen around. So I think the point of this, there's as much work to do on the how of how we structure contracts and our investments as on the kind of dollar figures and sectors themselves. And finally, I think it'll be really crucial to just rely on new sources of expertise across different departments and agencies as we go about building these new muscles. And just to take one, I think, concrete example relevant to EXIM and all the good work that the Chair's Council on Climate is doing. I would certainly hope to see EXIM sort of make full use of that in advising on its internal policies and programs to ensure that we are doing everything we can to better support U.S. exporters and drive forward sort of our climate priorities, both domestically and internationally. And with that, I will stop talking. Happy to field any questions. MR. VAN ES: All right. Thank you, Jen. Questions from the group? MEMBER CORNELIUS: Yeah, Jen, thank you for that presentation because that really was comprehensive. Can you tell me a little bit more about what you would be looking at when you talk about internal policies and new expertise? MS. HARRIS: I cannot -- sorry, I have a childcare emergency. And now you know that because you can hear my car beeping. I don't -- I'm not well versed enough in the particulars to answer that specifically with respect to EXIM on kind of if there are certain policies that we're hoping to see changed. But I do think just to take one example from my week this week, looking at a nuclear deal in Eastern Europe that there is certain thinking that we'd benefit from direct equity. I think -- I know that DFC has done direct equity in the nuclear space before. And I think one argument against doing so on any kind of urgent timeline, we just don't have expertise which is fair enough. But I think my reminder was why does it need to be in house. We have an army of the world's finest nuclear experts at DOE and dispersed across our national labs. So that's the kind of connectivity that I would hope to build, at least eliminate one excuse for not sharpening a tool in the form of direct equity that we have recently made available in DFC's kind of arsenal. There may be other reasons that we could (audio interference). So I don't know if that's responsive. I'm sorry. I can't think any specific class on EXIM right now. CHAIR HEITKAMP: Other questions? MEMBER CORNELIUS: Thank you. MR. VAN ES: And Gene from EXIM. I think part of that is on us. That's our responsibility to take on the direction that the NSC is providing and figure out how that applies to the agency. And what policies do we need to be looking at to be competitive and solve these real world challenges that American exporters are facing. CHAIR HEITKAMP: Yeah, Barbara? MR. VAN ES: Barbara? MEMBER BUCHNER: Thanks so much, Jennifer. I think just to -- I think maybe, Chris, you actually have already answered my question. But I very much welcome this approach, to take all tools, to take more risk-based approach. I think it's really if you want to promote innovation really needed. I'd just be curious and I think, Eugene, a little bit from your point, not only the tools that we have the types of the capital but also kind of the mandates on some of the U.S. agencies, including EXIM, whether there's discussions around that, whether that's part of the initiative more broadly. So just love to hear that. And probably then also Chris, maybe back to you as well to get your views on that. And thanks so much. MS. HARRIS: Sure. I can just say a brief word on that. And apologies. I didn't catch if it was directed to me. But no, just look, I think that we are to be as ambitious as I think the President wants us to be. We need both new resources and in certain cases tweaks to mandates in existing authorities. And so this is absolutely part of the process that we're trying to move out on. And I think part of that is just going to have to kind of come in sequencing. And I think because -- it's safe to say there like the jenga politics of reconciliation right now has kind of created a single file line on at least those issues that I think the (audio interference) that we are in a position to go for a kind of broad set of resources and legislative tweaks for agencies as part of reconciliation. And so we are really looking to other vehicles that I think it's certainly I would say among the top two or three priorities of our (audio interference) are optimistic that we'll be able to get to is in the first half of next year. CHAIR HEITKAMP: Other questions? MR. VAN ES: Last call. CHAIR HEITKAMP: Well, Jen -- yeah, there. What a great presentation. No one wants to follow up. But we're going to continue to monitor and watch and make sure that the work that's being done on Build Back Better has full implementation and that we can be value added to the work that's already started in the infrastructure package and undoubtedly will continue once this additional legislation is passed. MS. HARRIS: Wonderful. Thank you. And feel free to reach out with any further questions you do have. And I don't know if I mentioned it at the top, but we are sort of looking at January, probably late January kind of White House hosted official launch -- a formal launch of B3W that we will look to feature a few illustrative projects that get as much conversation from G7 countries as well as probably feature as part of whatever projects we're kind of spotlighting, the very kind of close partnerships that we want to have, a kind of dialogue that we hope to have and tone we want to strike with the host countries as well. So look for that party to happen, like, late January. And pretty soon, not quite yet, but pretty soon, my job will turn into full-time party planner -- (Simultaneous speaking.) MR. VAN ES: Well, Jen, consider this group -- MS. HARRIS: Thank you all. MR. VAN ES: Jen, consider this group at your disposal to be ambassadors and to help amplify around the launch and obviously the important work that carries after the launch. MS. HARRIS: Wonderful. I'll absolutely take you up on it. And get back with the rest of your conversation. Bye-bye. MR. VAN ES: Thanks, Jen. CHAIR HEITKAMP: Okay. I think, Chris, we're at the part where committee discussion -- I guess this is pretty open ended. You've already heard some great presentations. But we're kind of in the new stage. Reiterating and building on what Chris said, there's subcommittees out there. We need volunteers and participants. I think the more you guys can offer up a few more hours of your time will help coordinate the overall kind of advisory structure of the EXIM Bank. So I'm just going to open it up for any questions anyone has. Any comments? Do we -- yeah, Kathie. MEMBER LEONARD: Kathie, yes. I just want to comment. I think I said this the last time we had a meeting is that there's a good energy in this group having been on EXIM Boards the last two years. What I'd like to see is that we're pivoting to playing our own game instead of competing with China. We're just -- competing with China doesn't have to be we do what they do or we have to be on defense. We're playing offense. We're doing -- we have a lot to be proud of here in this country. We have a lot of capabilities, and I think we've kind of lost some of our confidence. Being a manufacturer -- a U.S. manufacturer, we've been beaten down for so long that we kind of forgot that we're good at it and that we're good a business. And I think we're starting to -- I see that energy here. And it's really encouraging because we do need to get that confidence up and play our game. And Adam Frost's story is a perfect example of doing that project, winning on our terms. So I just want to say that because I know I've struggled in my business to try and find ways to compete while being a U.S. made product. And it's not easy but it's doable. We've been here 42 years, so I know you can do it. MEMBER CORNELIUS: Kathie, you're right. I'd like to highlight what Adam gave us as an example and then say given what Jen just said about looking at our underwriting and our contracts. Can we take more risk? Can we -- how can we look at that? Going to three years in a term duration of a loan that accelerated from 87 million to 100 million and competed with China was awesome. I mean, that idea and what she just said was, listen, we are going to go all government-wide to say we need to be taking more risk. We need to be looking at our underwriting and looking at our contracts, not only our internal policies, which I think our internal policies is connected to our agency mandates. And I was trying to get her to say that without going to congressional. But anyway, I did the best I could to get that out. CHAIR HEITKAMP: Denny? MEMBER HECK: Thank you. I really appreciate Kathie's observations and remarks. Thank you for those. Thank you for what you do every day in your business as a matter of fact. That said, I do think it's important to remind ourselves that China has multiple export credit authorities. In the aggregate, I think it was a year or two, and Chris can correct me if I'm wrong, they financed more deals than the Export-Import Bank had in its entire history of existence. And to me, that's not depressing. But it does serve to underscore our work is important. The EXIM Bank is really important. It's critically important that we rebuild the infrastructure of deal flow coming off the suppressed years and put ourselves in a position to scale up because truthfully in order for us to integrate with a national export strategy, we need to be a lot bigger than we are, something for which Heidi and I fought for tooth and nail with the reauthorization legislation. But I think it's important to keep those things in mind too. We've got to do this right and we got to get a lot bigger because of what's happening out there in the global stage. CHAIR HEITKAMP: Other comments? Just pop on in. I want to make a point about risk. I think one of the things that you hear, oh, you lost this, you lost that. Some of you may not know this, but North Dakota owns a bank. It was developed in the turn of the century as part of our populist movement because we didn't think that the Minnesota bankers were financing our projects. So it was very innovative at the time and still exists today. And I was on the Board of that bank. And when the bank came to us and would brag about how they didn't lose any money as a development bank, I would say, well, then you're not taking enough risk. And so we need to build a culture -- political culture that accepts risk. I mean, I'm not saying unreasonable risk. I'm saying we need to do due diligence. We need to do the things that we need to do to protect the fisc. But we know that the bank returns money to the federal Treasury. We don't cost money to the federal Treasury. And so we continue to make this argument that the economic growth that we can encourage is not even counted in that. It's the assets and the profitability of the bank. But we also need to be warriors for the concept that it's okay occasionally to finance a project that doesn't work. It's okay to take some risk on behalf of American business or to agree to a work out when things get a little tough. And so I would just say that on top of becoming bigger, we need to be less risk adverse politically about financing projects from the EXIM Bank. MR. VAN ES: I think all very good comments. And I think, as always, we're taking these on and making sure that they get incorporated to the recommendations and the readouts. The one comment that I'll make in terms of kind of top line risk for the agency, the key -- not the key, a key driver for the agency's risk tolerance is our 2 percent default rate cap. And that drives a lot of decision making and a lot of underwriting decision. And so I think there are a lot of discussions to be had at the White House level as well as the agency level of what we should do and how do we navigate within the parameters that exist today. But risk tolerance, risk aversion is, I think, a key issue and hear these comments loud and clear. Dr. Buchner? MEMBER BUCHNER: Thanks so much. And again, I said it before already. But I think the risk bond is so important. And I think we can learn a lot from other experts and agencies globally. We discussed it in the last advisory council meeting. But I really would encourage us to look at some of the other examples that we have in the world and just to understand and come back basically asking, Chris, what you just said. I think we need to take a very fresh look at the overarching policies and mandate that EXIM has in order to really enable us to kind of take more risk. And really in this way, really drive more of the needed innovation from this country. So I think for me that's just, like, really fundamental. Maybe having a quick kind of self-revelation, what are some of the key barriers that hold EXIM back at the moment to take on more risk for specific sectors, for specific countries. And then really kind of try to understand how other EXIM Banks have been dealing with that and really kind of understanding how can we accept more risk and how can we take on more risk. The similar discussions are going on in other forum and talking to Development Finance Corporation as well. I mean, it's not only there. Development finance more generally is kind of having a big kind of moment of reflection at the moment on how to think about the overhauling the development finance system. So I think it's a very good moment at the moment just to do that. CHAIR HEITKAMP: Brad, do you have a comment? MEMBER MARKELL: I do. I just want to buttress what was just said by asking whether we can have a process to talk about and to possibly interject into the Bank's decision making. Or whether we need to be thinking about how the legislation that is the foundation here, how to consider other kinds of risk, geopolitical risk. Maybe take more financial risk because we're addressing a geopolitical situation. The strategic risk of not developing our sectors and not being able to be out there in clean energy. Then I would ask the labor guy here to talk about what is going on with just transition around the world and the social risk for us. I work very hard on just transition and the international scene, right? The social risk of not getting it right in other countries, there's a lot of different risk that we face. And I think a little extra financial risk if we're addressing those other risks should be tolerable. And we just need to find a way to put that all together. CHAIR HEITKAMP: Yeah. Brad, I think when you look at soft power, our greatest soft power asset is our economic and business acumen as Kathie said, that we know how to do this. We know how to deploy technology. We know how to create technology. But yet that soft power piece of it doesn't get acknowledged. We talk about diplomacy, but economics is the huge soft power driver and creating those relationships. And we've really let other entities like China kind of move into that space as we have retreated from globalization. And we can do globalization right, and it can be part of geopolitical kind of goals and aspirations and promoting democracy worldwide. MEMBER MARKELL: We have a very strong advantage in some research areas like solar, like storage. And we should be able to turn that into many kinds of business and geopolitical advantage as well. CHAIR HEITKAMP: Yeah. MR. VAN ES: So I think perhaps I'll try to bridge these very good comments to operationalizing them. I think perhaps what we do is the role of this committee is to provide and guidance to the agency, right? And so I think perhaps as part of the competitiveness subcommittee that that group takes on risk as a stop and a subsection -- CHAIR HEITKAMP: You froze, Chris. Chris is frozen. (Simultaneous speaking.) CHAIR HEITKAMP: Here you go. MR. VAN ES: Sorry, did I cut out? MS. ASHBY: Right after -- (Simultaneous speaking.) MR. VAN ES: Okay. Well, I don't know what you caught. But the point was the competitiveness subcommittee taking on risk as a topic to put forward recommendations in the competitiveness report. CHAIR HEITKAMP: Okay. Hazeen? MS. ASHBY: Yes. CHAIR HEITKAMP: Do you have a comment? MS. ASHBY: I do. I do. And as you guys -- and I was actually going to say the same thing about what Chris said about taking it to the competitiveness subcommittee for your recommendations to us. But also I think as you guys take a look at it, I want to underscore something that Jen said too. As we're doing this work and we're looking at this work and you guys are giving us here at EXIM feedback and recommendations, I really want you to also take a look at what is currently possible underneath our mandates and what is not currently possible. So not only looking at legislative fixes but things that we can do -- that we can currently do because as Jen said, the legislative calendar is pretty full. And so it's really kind of figuring out, like, what is possible right now knowing that legislative fixes might not happen. Our 2 percent default rate is a legislative mandate. So that means in many ways the risks that we take are legislatively mandated. And also, like, making sure that we are responsible stewards of taxpayer money is also legislatively mandated. Our financing authority is finite and that is also legislatively mandated. So there are a lot of -- there are things that I think that as we -- we know that some of these fights are changes -- I should say some of these changes would take much longer. So really would -- I would urge that the recommendations come in two buckets, things that can happen now that maybe we should be looking at in ways that we can expand the work that we do underneath our current mandated authorities and things that we would like to see. (Simultaneous speaking.) MEMBER CORNELIUS: Yeah, that's exactly where I was going when I asked her the question because I knew that we had legislative restrictions. But my question to you then is would we be able draw what we can do now which is a great idea, and then what we can do in a short term and long term with legislation and what's politically feasible given that we have some hostility towards the Bank? MS. ASHBY: I think that we can -- I think we take all recommendations obviously. And then the Board will have to make the decision. The reason that Jen was not going to answer that is because EXIM is an independent agency, and the White House can also just recommend things to us. And then our Board is the only one that make that decision and vote on those decisions for us. So that was why she would not -- I would've been surprised if she would've given you an answer. So she's probably waiting for one of us here at EXIM to jump in and say that. MEMBER HECK: Hazeen or Chris, I have a question about the default rate. My recollection we haven't hit that 2 percent in I don't know how long. We're statutorily mandated to manage to that ceiling. But in fact, we're managing to a figure below, are we not? MR. VAN ES: Correct. It's we're managing to 1.99999. (Simultaneous speaking.) MR. VAN ES: And you're right. We haven't hit it in a long time. And I think the pandemic has indeed stresses the portfolio for the same reasons that the global economy has been stressed. But yes, we're managing to sub 2. MEMBER HECK: But my question is what's the experience been? It's not been 1.999. MS. ASHBY: No. But so right now, there is currently in the President's FY '22 budget request, there is a legislative request for us to have a temporary increase to our default rate to 4 percent because as Chris said, COVID-19 has stressed our portfolio, especially in the transportation arena. We were -- I think traditionally EXIM usually has a very, very low default rate of, like, 0.1. But we have crept up to, like, 1.55. That is obviously not optimal and it has been become a concern for many of our detractors -- I mean, for all of us, period. But it's something that many of our detractors on the Hill are also paying attention to right now. But we know that it's occurred because of COVID. So no one should be surprised that in the transportation arena, especially around airplanes that you would see that some of those companies are stressed right now. It's COVID. And global travel has not picked up even in the same way that domestic travel has. But yes, we are working to manage it. But if I'm going to be completely honest, I don't think it'd be politically feasible for there to be a permanent change right now in our default rate. MEMBER HECK: Of course what members care about is the arbitrariness of 2 percent versus 1.5 versus 2.5. It's that they not have to subsidize it. And we haven't transferred money from the Treasury to the EXIM I think since the early '90s or late '80s or perhaps before since the last -- (Simultaneous speaking.) CHAIR HEITKAMP: Yeah, and Denny, it's gone the other way. MS. ASHBY: Yeah. MEMBER HECK: Right. MS. ASHBY: Yeah. MEMBER HECK: The EXIM has been a considerable spigot of money to the federal government. And so when we talk about, Hazeen, good point, that which we can do legislatively, that which we can do administratively, excepting for the spike in experience associated with the pandemic, the issue is, could the Bank take on some more risk since historically they've been below that 2 percent in normal times. So they have capacity to be, as the Senator suggests, maybe a little riskier. CHAIR HEITKAMP: So let me suggest this, Chris. In that advocacy package, we talk about the things that we're talking about here that look -- I forget who here -- maybe it was Brad talking about the amount of credit and the amount of work that China is doing and why the EXIM works or why an export finance agency works in China and how we've been limited in terms of what we do by these caps and by a risk factor that's not realistic. And if we put that in our advocacy package and we talk to the chambers and we talk to the rotaries or whoever it is that we're getting in front of, we're building a case state to state to state along with these state export agencies who are very supportive of the EXIM Bank. We just -- we aren't going to convince Pat Toomey, right? But Pat Toomey can stand in our way. We're not going to -- I mean, he's gone. So that would be one gone. Shelby is gone. So we aren't going to convince the people who hate the Bank to begin with. We just need to convince people how critical and get people to understand how critical this infrastructure of the Bank -- of the EXIM Bank is to American competitiveness. And so we just keep say what -- if they say what can we do to promote exports, we're out there saying, look, we've got this bank. We want all of you to use the Bank. But we want the Bank to function much more aggressively against our competitors like China. And so I think we can do a pretty good job making the case at that level. And hopefully when we get to the next reauthorization, we can get you the tools that you need to have the folks show up who are then ready to -- whether it's the state chambers or whoever who are ready to kind of march with us. MR. VAN ES: Yeah, all very good comments. And I think you're exactly right, that there is general bipartisan support for the EXIM Bank. And part of our challenge is lifting up the people who want to see this place succeed and what to see American exporters succeed. And so I think, Senator, happy to include in the advocacy pack top line message points on some of these issues and other key issues that we're working on. CHAIR HEITKAMP: Okay. Yeah, Kathie? MEMBER LEONARD: How about expert insurance, export credit insurance? We're experiencing issues now with these long shipping times to get products shipped out. And our exports are up 50 percent over last year because everybody is coming back. The rest of the world is coming back. And we just experienced what used to take two months took four months to get the shipment there and through customs. In fact, it still hasn't gone through. And so our credit insurance has now run out. I'm just wondering -- it's not end of the world for us. It was just a shipment. But I'm just wondering could EXIM look at those issues and try and extend them a little bit for businesses that are trying to export more and more U.S. product. I don't know if that's set in -- it's always been the same number of days since we started using that insurance. And I just wonder if it's something that could be considered by the committee -- the subcommittee that's looking at all these things. Just put it in there from that standpoint. (Simultaneous speaking.) MEMBER LEONARD: Does that make sense? MR. VAN ES: I think definitely, and I think practical items like this are incredibly important. So yes, I think -- MEMBER LEONARD: They're just small things, but they're sort of speaking to where we are today. MR. VAN ES: Yes. (Simultaneous speaking.) MEMBER LEONARD: -- are ridiculous. So maybe with better -- with a little bit more room temporarily, it might help us continue our same export programs because what we're starting to do as exporters is to be we're getting risk adverse. And if we get risk adverse, we're not going to be exporting. So we need that backup. CHAIR HEITKAMP: Other comments? Anything else for the good of the order? I think at this point, I don't know if we have anyone, Chris, who is on who wants to make public comment at this time? MR. VAN ES: Yeah, let's open up for any public comments. India is monitoring the incoming chat and requests. We'll give any members of the public an opportunity to speak up before we close. All right. CHAIR HEITKAMP: Okay. MR. VAN ES: If there are no public comments, then we can wrap this up. Thank you all for your time today. Next steps are a few-fold. The subcommittees will kick off in the new year. And then for the next meeting in addition to those, we'll try to have reports from our other committees and have some dialogue about the work that's coming out of all of our subcommittees. CHAIR HEITKAMP: So Chris, the question is, are we going to meet virtually or are we going to meet in person? MR. VAN ES: That's a good question. And we will try to answer that as quickly as possible. I think -- I as much as anybody am ready to get out from working from my house and would love to meet in person. So I will at least aspirationally say that we will hope to do that. But I think hard to say. I think the agency is working through our own return to work schedule right now. But I promise that whatever decision happens, it will be given with due time to make any kind of appropriate planning. CHAIR HEITKAMP: I think Hazeen looks like she's in some kind of closet. So we want her out of the closet. MS. ASHBY: I'm in my office. But the way that the federal government has lighting. That's the reason. We can only have so much light. So I have to hold my computer and I'm dark skinned. I have to hold my computer at a certain angle to get enough light so that you can actually see me. But I'm in my office because -- (Simultaneous speaking.) CHAIR HEITKAMP: You're playing this all wrong. You should say, oh, it's been terrible. I need a much bigger place to work. MS. ASHBY: I like that, one, that we're back. And I like that GSA is very environmentally conscious and wants to make sure that we're conserving energy appropriately, so -- (Laughter.) CHAIR HEITKAMP: Okay. Well, listen, thank you so much everybody who joined us. I'm looking forward to interaction with our other subcommittees. And please volunteer to participate on one of the additional subcommittees that quite honestly you guys asked for. So EXIM is accommodating the comments from our first meeting. And I think it's only right that we should step up and offer our services. So thanks so much, Chris, and your whole staff for the great work and look forward to our spring meeting. MR. VAN ES: All right. Thank you all. Happy holidays. Stay safe and we'll talk again soon. (Whereupon, the above-entitled matter went off the record at 3:38 p.m.)