Accessing cheaper project debt with government-backed institutions

Once your climate company starts to scale, reducing your cost of capital becomes critical. If your company imports or exports goods, government-backed programs – both locally and abroad – provide one avenue for significantly cheaper financing. These institutions are risk-averse and process-driven, but if you have the time and foresight, they can offer you debt at a dramatically lower cost.

Brandon Moffatt is the Co-Founder and Chief Development Officer for StormFisher Hydrogen. In the fifth of our series in partnership with Unreasonable Impact, we sat down with him to discuss how these institutions work, what they offer, and how to navigate deals with entities in other countries.

Who are the players? 

These entities are quasi-governmental banks, export credit agencies, and government-backed programs designed to support the export or import of goods. 

For example, say you're sourcing electrolyzers from Germany for a project in Canada. A German export credit agency can provide credit support tied to that equipment, as a way to incentivize you to buy from German suppliers.

That support often comes in the form of a guarantee from a quasi‑governmental group like Euler Hermes. Part of the German government, they provide financial cover for banks like Commerzbank, enabling them to lend to your project.

On the flip side, if a country is trying to procure a strategic resource, equipment, or technology, they're often willing to extend support. In the Netherlands, for example, the government has mandated Atradius, a private institution, to provide financial cover for infrastructure abroad that exports low‑carbon fuels into the Dutch market.

In Canada, groups like Export Development Canada or Canada Infrastructure Bank offer direct loans. In the US, the Export-Import Bank operates similarly – it supports exports through credit and some project finance. Then there's the SBA, which guarantees loans from commercial banks to small businesses, meaning businesses that would have either paid higher‑cost capital or been left out of the credit ecosystem entirely now have access.

What instruments are available? 

These institutions offer a range of financial tools, designed to help companies build infrastructure or sell goods while managing risk.

Project finance
If you're building something at scale, these institutions can provide the debt for that project.

Bank credit
Credit for prioritized industries, or credit through private institutions backed by government guarantees.

Accounts receivable cover
If you're selling equipment into a new or emerging market and worried about getting paid, they'll protect you against someone stiffing you on the bill.

Security and bonding instruments
For smaller companies to meet requirements that might otherwise be out of reach.

What this looks like in practice

Say you have a $100M project. These institutions might provide $50–60M in debt, but only if you bring the remaining capital as equity. Without that, there’s no deal. 

Depending on the structure, the debt can come with significant security requirements, such as collateral or personal guarantees. They will typically provide 60–90% coverage on that debt. With less security – such as in non-recourse structures without corporate guarantees – coverage tends to fall toward the lower end of the range.

Step by step

1. Lay the groundwork 
You need to know exactly what markets you're trying to penetrate and who your customers are. 

This is not early-stage capital where you can show up with just a pitch deck – your project will need to be scoped, designed, and contracted before you engage these institutions.

2. Understand your target institutions
You’ll then need to do your research to ensure you’re reaching out to the right group with the right mandate. 

Debt is incredibly process-oriented, so you need to have a strong grasp on how these organizations function – for instance, will you need to bring a local bank to the table? Understand their criteria and how things are run before you start to make sure things go smoothly and avoid wasting time. 

3. Make contact
Getting in touch with the organization can be as simple as going on the website and filling out a form. Other times, you’ll need to do some digging to figure out who to speak to, and build familiarity first rather than going in cold. Banks tend to be responsive, as guaranteed capital is an easier way for them to get money out the door. 

4. Get the details right
Any credit process is unlike venture fundraising. With VCs, the goal is to show up and tell the most exciting story. With credit, the goal is to tell the tightest, most documented, data‑driven narrative of your business. If anything is incomplete or incoherent, you’ll lose all credibility. 

Tips for making the deal happen 

1. Come with contracts that lenders can trust 
To access these programs, these institutions need to see contracts that can withstand scrutiny, i.e. a strong offtake agreement of 10+ years. Handwaving won’t work here. 

And on the other side, if you’re a project developer who’s going to buy gear from another country, the lender is effectively hitching their wagon to that technology vendor. It’s a tri-party deal, so the vendor must also be completely creditworthy.

2. Be mindful of cultural differences 
While these institutions are process driven, there’s still a complex human element at play, with cultural dynamics you won’t be accustomed to. If you’re not tuned in to the way red flags are raised and feedback is given, you could miss the mark even if everything looks great on paper.

To understand how an export group in another country actually operates, you’ll need to spend time with them – physically, in an office in Hamburg or Amsterdam. This will also help you build the long-term relationships that you’ll need with these stakeholders. These are not the kind of deals that are done over Zoom. 

3. Be prepared for the long haul
Accessing this capital involves a lengthy, diligence-heavy process, often taking six months to a year. But the tradeoff in terms of time for money is completely worth it. Using VC cash at this point is like buying a house on a credit card, whereas these facilities are like a mortgage – or better.

The slow turnaround means that it’s not the right fit if you need to build a project in three months. But if you’re two years out from breaking ground, you can spend the time, and you’re sufficiently capitalized as a corporate entity, it will be worth the effort. 

This guidance applies primarily to large‑scale infrastructure deals, which can run into the hundreds of millions. If you’re selling clean tech widgets rather than building projects, and you’re looking at credit support that will allow you to get cash sooner, the timeline is shorter. 

Brandon is an industry thought leader with extensive technical and development experience in the environmental, waste and renewable energy sectors. He has experience developing regulatory and industry policy in waste diversion and renewable energy. He has led the development, design and construction of several complex organics processing and anaerobic digestion sites across North America and has a detailed understanding of the commercial and operational aspects of power to hydrogen and power to gas projects. Brandon is a board member of the Ontario Environment Industry Association (ONEIA), has an MBA from the Odette School of Business and holds a B.A.Sc. in Environmental Engineering from the University of Waterloo.