Welcome to ECA Watch

Export credit agences provide government-backed loans, guarantees and insurance to corporations working internationally in some of the most volatile, controversial and damaging industries on the planet.

Shrouded in mystery, ECAs provide financial backing for risky projects that might never otherwise get off the ground. They are a major source of national debt in developing countries.

ECA Watch is a network of NGOs from around the world. We come together to campaign for ECA reform - better transparency, accountability, and respect for environmental standards and human rights.

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What's New June 2018

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

ECA Watch applaudes European Ombudsman demand for greater EU ECA transparency on human rights and environmental impacts

(ECA Watch, Amsterdam, 28 June, 2018) ECA-watch applauds the European Ombudsman’s ruling on maladministration of the European Commission in checking compliance of European Export Credit Agencies with EU law In a landmark ruling1, the European Ombudsman has found that the European Commission failed to fulfil its legal obligation to assess the compliance of EU-based official Export Credit Agencies (ECAs) with EU laws and human rights obligations. The Ombudsman has recommended that changes be introduced to the EC’s reporting procedures. If implemented, the ruling could mean that EU-based ECAs – national bodies that give financial support to companies doing business overseas, including in ‘risky’ markets – are to be named and shamed where their activities fail to meet EU human rights and environmental obligations.

http://www.eca-watch.org/publications/eca-watch-applaudes-european-ombudsman-dem...


Turkey Halts Filling Tigris Dam After Iraq Complains of Water Shortages

(Reuters, Ankara/Baghdad, 7 June 2018) Turkey has temporarily stopped filling a huge dam on the Tigris River after complaints from neighboring Iraq, which is suffering water shortages, officials said on Thursday. Turkey's ambassador to Baghdad and Iraq's water minister also said that the two countries had agreed that when Ankara resumes filling the Ilisu dam in July it will still allow sufficient water to flow into Iraq. The dam, more than 20 years in the making, will generate electricity for a large area of southeast Turkey. But it has been heavily criticized over its impact on the environment and on the tens of thousands of villagers who will be displaced. Its waters will also submerge a 12,000-year-old town.

https://www.usnews.com/news/world/articles/2018-06-07/turkey-halts-filling-of-il...


U.S. embassy warns Americans to leave northeastern Mozambique due to imminent attacks

(AfricaNews/Reuters, Maputo, 12 June 2018) The U.S. embassy in Mozambique said Americans should consider leaving a northeastern district close to a major gas field as imminent attacks are likely after suspected Islamist militants beheaded 10 people and killed seven others since May. Anadarko Petroleum is seeking to raise a record $14-15 billion from banks and export credit agencies for its huge liquefied natural gas (LNG) project there, sources close to the matter said in May. The company declined to comment on reports it had suspended work on its massive LNG project in the war-scarred southeastern African country. Environmental NGOs and Mozambicans have raised serious concerns about multiple negative impacts of this project. French bank Societe Generale, the financial adviser on the $20 billion Mozambique LNG project, has already received interest for a combined $12 billion in cover and direct lending from export credit agencies (ECAs) in China, South Africa, Italy and Japan.

http://www.africanews.com/2018/06/12/us-embassy-warns-americans-to-leave-northea...


Trump taps nominee to lead Export-Import Bank

(The Hill, Washington, 20 June 201) President Trump on Wednesday nominated Kimberly Reed to lead the Export-Import Bank, taking a step toward getting the agency running back at full lending strength. The 84-year-old bank has been in financial limbo over the past three years, short of enough members on its board of directors to make loans above $10 million. During her November confirmation hearing, Reed said that she looked "forward to bringing two decades of bipartisan experience to my work at the Bank, which has more than 400 dedicated career professionals." A Wall Street Journal commentator noted that "By turning to Ms. Reed, a former Treasury Department staffer during the George W. Bush administration, the White House is backing a nominee for the bank who thinks the Ex-Im Bank’s role is essential for the U.S. to counter foreign governments that operate their own export-finance agencies. At her nomination hearing late last year for a less-senior post at the bank, she said not having a functional export-finance agency amounted to “unilateral disarmament.”

http://thehill.com/policy/finance/393383-trump-taps-nominee-to-lead-export-impor...


Europe says U.S. Threat of Sanctions Imperils Bid to Save Iran Deal

(Wall Street Journal, Washington, 6 JUne 2018) Senior European officials conceded in a letter to the Trump administration that their efforts to save the Iranian nuclear accord by maintaining major trade, investment and export credits with Tehran are buckling in the face of planned U.S. sanctions. European countries have vowed to keep commerce with Iran flowing in order to persuade Tehran to remain in the accord and restrict its nuclear activity. An effort to persuade central banks to make one-off payments to Iran to pay for future oil imports has so far borne little fruit, officials say. The EU is still working on giving Iran fuller access to European Investment Bank loans. Officials are also considering extending credit lines, like the €5 billion ($5.85 billion) program set up by the Italian government, or providing export credit guarantees to companies. However, even these programs could be vulnerable to U.S. sanctions.

https://www.wsj.com/articles/european-officials-say-u-s-threat-of-sanctions-impe...


Germany Sets Up Iran Advice Office for Companies

(Financial Tribune, Tehran, 17 June 2018) The German government has set up a special office to advise companies worried about their business dealings with Iran amid fears they will be targeted for US sanctions. The European signatories to a 2015 nuclear agreement with Iran—Germany, France and Britain—have vowed to keep the deal alive after US President Donald Trump withdrew from it last month. Germany’s Economy Ministry said on Friday it has established an “Iran contact point” for companies to pose their questions by email.  The ministry stressed that European sanctions relief for Iran, one of the terms of the nuclear agreement, remain in place, and that government-backed export credit guarantees are still available, AP reported.

https://financialtribune.com/articles/economy-domestic-economy/88079/germany-set...


UK signs £1.5BILLION trade deal as Brexit Britain expands on world stage

(Express, London, 9 June 2018) Trade Secretary Liam Fox has announced the UK has secured a £1.5 billion trade deal and signed off £75 million in other trade agreements in a major boost for the UK economy after Brexit. Dr Fox is expected to release a new Export Strategy which will set out the Government’s plan to get businesses of all sizes exporting their products to boost the economy after Brexit. The lucrative trade deals come as Britain’s exit from the EU looms. Dr Fox announced today a deal worth more than £1.5 billion had been secured by a UK company to deliver natural gas project in Cameroon. Additional deals have also be secured in Panama, Turkey, India and Qatar worth £75 million for British businesses. Capitalising on recent foreign visits by Cameroon’s Minister Secretary General, the Presidents of Panama and Turkey and the Prime Minister of India, UK businesses have been exploring exporting opportunities with some of the fastest-growing economies.

https://www.express.co.uk/news/uk/971445/brexit-news-eu-uk-trade-deals-liam-fox-...


UKEF provides £2.5bn in support for UK exports

(Bridging & Commercial, London, 21 June 2018) UK Export Finance (UKEF) has revealed that it helped UK exporters – 77% of which were smaller businesses – secure sales to over 75 countries during the financial year 2017/18. In its annual report and accounts, the UK’s export credit agency reported that it provided £2.5bn in support for UK exports during the same period. It also stated that since 2011, it had supported £4.1bn in export contracts through its trade finance products, which were introduced to give smaller businesses an exporting edge. The annual report and accounts are availalable here.

https://bridgingandcommercial.co.uk/article-desc-13661_UKEF%20provides%202.5bn%2...


Intra-Africa trade boosted by launch of $1 bln promotion programme

(African Independent, Cape Town, 27 June 2018) The African Export-Import Bank and the Export Credit Insurance Corporation of South Africa have launched a  $1 billion trade and investment programme expected to boost business between South Africa and the rest of the continent. The programme will help address the need for African countries to work closely together in addressing the challenges of fragmented markets, under-developed production structures and inadequate economic diversification, the deputy director general of trade at the department of trade and investment Lerato Mataboge said at the launch on Tuesday. "Our aim as a government is to increase the levels of South African investments in the rest of the continent through targeted support measures," Mataboge said. "We have targeted $100 billion of investments to be reached in the next five years and we want to ensure a sizable amount of investments into South Africa that are of African origin."

https://www.africanindy.com/news/intra-africa-trade-boosted-by-launch-of-1-bln-p...


Gazprom signs $1.2bn Bolivia deal

(Energy Reporters, Istanbul, 20 June 2018) Russian state-run gas monopoly Gazprom has committed to invest US$1.2 billion in exploration and production at the Vitiacua onshore field in southern Bolivia.  “This contract will mean an investment by Gazprom of US$1.2 billion, the drilling of two exploratory wells, six development wells, adding a total of eight wells, with a maximum production of 400 million cubic feet in coming years,” Bolivia’s state-owned oil and gas company YPFB chief executive Oscar Barriga said. The Viticua block in the Chaco oil and gas basin has potential reserves of 2.17 trillion cubic feet, Barriga told the media. The Russian agency for export credit and investment insurance, Exiar, and Bolivia’s energy ministry signed a deal to secure financing for supplies of gas-fuelled machinery and equipment produced in Russia. Around 20,000 Russian public transport vehicles will be shipped to Bolivia as part of the Bolivian government’s efforts to boost natural gas as a transport fuel instead of oil.

https://www.energy-reporters.com/consumption/gazprom-signs-1-2bn-bolivia-deal/


Uzbekistan and Rosatom to build joint nuclear power plant

(Vestnik Kavkaza, Tashkent?, 4 June 018) Uzbekistan will be the first country in Central Asia to have a nuclear power plant. Rosatom proposes to build a station consisting of two modern VVER-1200 units of 3+ generation. A similar project is being implemented by Rosatom in Bangladesh. It is estimated at about $13 billion, of which $11.3 billion provided by Russia as a state export credit. The cost of the Belarus NPP was $10 billion. The cost of the Uzbek nuclear power plant is unknown yet. Expert Kubat Rakhimov believes that the Uzbek nuclear power plant will be more expensive, since it will be difficult to solve the issue of a cooling system in Navoiy without sufficient quantity of running water and / or large water bodies. Russia is ready to offer Uzbekistan several options for financing the project, including on the terms of a state loan, a scheme of borrowed money from the market, investing its own funds, as well as the BOO scheme (build-own-operate). In addition, the possibility of allocating borrowed funds for the construction of the station from the Russian Export Center is being discussed.

http://vestnikkavkaza.net/analysis/Uzbekistan-and-Rosatom-to-build-joint-nuclear...


Vietnam's Long Phu coal plant delayed due to US embargo on Russian Contractor

(Vietnam Investment Review, Hanoi, 17 June 2018) On January 26, Power Machines, the EPC contractor of Long Phu 1 thermal power plant, was put on the US Department of Treasury’s extended list of Russian individuals and companies subject to sanctions imposed on Moscow over the Ukraine crisis. The move may delay the construction of Long Phu 1 project by 36 months. After the sanctions were imposed on Power Machines, General Electric announced cancelling the contract of supplying turbines and generators, which are two important segments of the project.

http://www.vir.com.vn/three-billion-dollar-thermal-power-plants-running-behind-s...


Anti-Adani NSW protest outside Australian ECA office

(The Australian, Sydney, 29 June 2018)  Protesters worried about potential taxpayer funding of Adani's mega-mine in central Queensland have picketed the Sydney offices of Australia's export credit agency. About 40 Frontline Action on Coal activists on Friday demanded to meet with the boss of the Export Finance and Investment Corporation. They chanted "money for health and education, not for mining corporations" and unfurled a large banner reading "No Future In Coal #NoNewCoal" before being moved on by NSW Police after an hour. The group claim federal Trade Minister Steven Ciobo has directed EFIC to assess "putting public money" behind the Indian mining giant's proposed thermal coalmine.

https://www.theaustralian.com.au/news/latest-news/antiadani-nsw-protest-outside-...


What's New May 2018

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Auditor general finds ‘deficiencies’ at Export Development Canada
  • EDC requests public input during policy review
  • Papua New Guinea prime minister ridicules report on EFIC gas project
  • Europeans push last bid to salvage Iran deal, but work on plan B(s)
  • Anadarko seeks to raise $14-$15 billion for Mozambique LNG project
  • Democrats Want A Permanent Fix For Hobbled Ex-Im Bank
  • US Military Export Sales Support Grows by 950% from 2007 to 2017
  • South Korea braces for trade with North
  • Lowy Asia Power Index: EFIC pulls Australia down in regional power game
  • Saudis Trying to Influence Iraq’s Political Landscape With Export Credit
  • World Bank Group’s MIGA to share risk with Japan’s NEXI through reinsurance

Auditor general finds ‘deficiencies’ at Export Development Canada

(National Observer, Ottawa, 30 April 20188)Canada’s federal auditor general says there are “significant deficiencies” at Export Development Canada when it comes to risk management.The Office of the Auditor General of Canada announced the results of an audit into Export Development Canada (EDC), which facilitates international business deals as Canada's export credit agency, on April 30, that “found a number of weaknesses."The warning comes on the heels of a report by Ottawa-based watchdog Above Ground that found EDC did not have effective screening for corruption.

https://www.nationalobserver.com/2018/04/30/news/auditor-general-finds-deficienc...


EDC requests public input during policy review

(Canada News Wire, Ottawa, 16 May 2018) EDC is now inviting stakeholders from across the Canadian trade and business ecosystems to offer input and constructive feedback on the following key policies under its environmental and social risk management framework on: Environmental and Social Risk Management (ESRM); Climate Change policy; Environmental and Social Review Directive (ERD); Human Rights Statement; and Disclosure Policy. A discussion paper has been published, and a dedicated webpage has been created to further explain the review process. Submissions are welcome during a 90-day comment period from May 14 – Aug 17, 2018.

https://www.newswire.ca/news-releases/edc-requests-public-input-during-a-review-...


Papua New Guinea prime minister ridicules report on EFIC gas project

(Australian Associated Press, Sydney, 1 May 2018) Papua New Guinea’s prime minister has dismissed as “fake news” a report that claims a partially Australian-funded liquefied natural gas project is failing to deliver a promised economic boom to his people. Peter O’Neill was in Brisbane for the Australian-PNG business forum and used a keynote speech to attack a damning report by Jubilee Australia, which questioned whether projected economic benefits were flowing from the ExxonMobil-led project. Australia’s export credit agency, Efic, made its largest ever loan of $500m to ExxonMobil, OilSearch, Santos and the PNG government in 2009. “The people of PNG would have been better off had the project not happened at all,” said report co-author Paul Flanagan, a former Australian Treasury official. OilSearch chief executive Peter Botten said the report would be subject to "rigorous analysis" to find out where Jubilee was right and where it could be challenged. The Guardian Australia reported that despite company celebrations of gas flowing since 2014 and  the 300th shipment of LNG from the project’s export terminal, the landowners in Hela hadn’t been paid any royalties. Santos chairman Keith Spence has stated that "We have met every obligation... the moneys that were promised to the landholders have been paid to the government" Predictably, this was raising tensions in the area and there were – and are – very real fears that the project could end up triggering an armed insurgency. One news agency noted that undelivered infrastructure projects which resource companies promised landowners, including roads, airports, hospitals, housing and sewerage projects, could even lead to civil war. Between 1987-1997, 20,000 people died in a civil war between PNG and its Bougainville province. Panguna, one of the world's largest copper and gold mines, sparked that conflict.

https://www.theguardian.com/world/2018/may/01/fake-news-papua-new-guinea-prime-m...


Europeans push last bid to salvage Iran deal, but work on plan B(s)

(Reuters, Paris/Brussels, 3 May 2018) France, Britain and Germany all say they will stay in the deal even if the United States withdraws, and try to protect and foster European trade and ECA support with Iran, which has soared since the European Union lifted most of its economic sanctions. Iran’s exports of mainly fuel and other energy products to the EU in 2016 jumped 344% to 5.5 billion euros ($6.58 billion) compared to the previous year, while investment in Iran jumped to more than 20 billion euros. The Europeans aim to present a separate political agreement to the White House that commits to taking a tougher stance on Iran, if they can agree it in time with the U.S. France’s President Emmanuel Macron and German Chancellor Angela Merkel are continuing to lobby Trump, but with the prospect of him changing his mind remote, the focus has shifted to managing the fallout and avoiding a dangerous vacuum. The German Economy Ministry said it was waiting for a formal U.S. decision on the Iran deal before deciding whether to stop offering German firms export guarantees for business deals with Tehran. Such guarantees provide state protection for companies doing business abroad when foreign debtors fail to pay. The EU may also be considering switching to euros instead of U.S. dollars in the oil trade with Iran The prospect of trade with Europe would provide the Europeans with a chance to assuage the Iranians, and dissuade them from rash decisions such as leaving the deal or reviving the nuclear activities they agreed to give up. The Financial Times notes that even as European leaders prepared their pleas for exemptions from US president Donald Trump’s sanctions on Iran, advisers were warning of a deepening chill on multinationals’ willingness to do business with the Islamic republic.

https://www.reuters.com/article/us-iran-nuclear-europe/europeans-push-last-bid-t...


Anadarko seeks to raise $14-$15 billion for Mozambique LNG project

(Reuters, London, 18 May 2018) - Anadarko Petroleum is seeking to raise a record $14-$15 billion from banks and export credit agencies for its huge liquefied natural gas (LNG) project in Mozambique, sources close to the matter said. Fast-growing gas demand from China and Southeast Asia is reassuring export project developers sitting on huge untapped gas discoveries in Mozambique and elsewhere that the market cycle is turning after three years of low prices. The full amount would be the largest loan ever in the LNG sector. French bank Societe Generale, the financial adviser on the $20 billion Mozambique LNG project, has already received interest for a combined $12 billion in cover and direct lending from export credit agencies (ECAs) in China, South Africa, Italy and Japan. Environmental NGOs and Mozambican have raised serious concerns about multiple negative impacts of this project.

https://www.reuters.com/article/us-anadarko-petroleum-mozambique-lng-exc/exclusi...


Democrats Want A Permanent Fix For Hobbled Ex-Im Bank

(Law360, New York, 30 April 30 2018) On the heels of President Donald Trump’s decision to tap one of his top trade advisers as the interim head of the U.S. Export-Import Bank, a throng of Democratic senators on Friday pressed the White House to move ahead with a permanent leader for the beleaguered export credit agency. In a letter spearheaded by Sens. Maria Cantwell, D.-Wash., and Heidi Heitkamp, D.-N.D., the senators once again noted that the bank has been unable to finance high-value export projects since December 2015 due to the lack of a sufficient quota on its board of directors and that the appointment of a new bank president would go a long way to remedying that dynamic. “Since December 2015, Ex-Im has not had a fully operational board that is able to review and approve the types of deals that would expand U.S. exports,” they said. “As a result, foreign export credit agencies have been and will continue to rush to fill the void. In turn, more U.S. jobs will be sent overseas, and both American workers and companies will be at a serious disadvantage.” Trump’s first nominee for the job, former congressman Scott Garrett, was eventually withdrawn after stern backlash that focused on Garrett’s past as staunch advocate for shuttering the bank. Since then, movement on Ex-Im has remained mostly quiet as Trump’s board nominees have earned the blessing of the Senate Banking Committee but are still awaiting a full vote.

https://www.law360.com/articles/1038568/dems-want-a-permanent-fix-for-hobbled-ex...


US Military Export Sales Support Grows by 950% from 2007 to 2017

(GAO, Washington, 10 May 2018) The US Foreign Military Sales (FMS) administrative account balance grew by over 950 percent from fiscal years 2007 to 2017—from $391 million to $4.1 billion—due in part to insufficient management controls, including the lack of timely rate reviews. The Defense Security Cooperation Agency (DSCA) has some controls to manage the account balance. By not performing timely rate reviews or setting an upper bound, DSCA has limited its ability to prevent excessive balance growth.  U.S. foreign partners buy billions of dollars of defense equipment and services each year through the U.S. Foreign Military Sales program. The program charges fees to purchasers to cover the U.S. government's cost of operating the program. As the value of these sales has increased, the balances in the 2 main fee accounts have grown in excess of 950% and now top $5 billion. GAO found that the substantial growth in these accounts was due to insufficient management controls.

https://www.gao.gov/products/GAO-18-401?mobile_opt_out=1#summary_recommend


South Korea braces for trade with North

(Korea JoongAng Daily, Seoul, 3 May 2018) As relations between the two Koreas warm, Seoul is gearing up to create new economic ties with Pyongyang, according to the South’s top economic official. According to Kim Dong-yeon, South Korea’s minister of strategy and finance, the so-called inter-Korean cooperation fund, a government fund established in 1991 that is devoted to projects that promote ties and exchanges between the two Koreas, has about 1 trillion won in its budget for 2018, with about 350 billion won (US$324 million) assigned specifically for economic projects. The fund is sourced from the government budget and public sector funds and is under the supervision of the Export-Import Bank of Korea, a state-run export credit agency.

http://koreajoongangdaily.joins.com/news/article/article.aspx?aid=3047641


Lowy Asia Power Index: EFIC pulls Australia down in regional power game

(Australia Financial Review, Melbourne, 8 May 2018) In the overall rankings, Australia is defined as an over-performer, or a country that punches above its economic and military strength. Indeed, we are ranked third in the over-performer stakes behind Japan and Singapore, coming in one place ahead of South Korea. This is primarily due to the strength of Canberra's military connections into the region and the cultural power associated with the university sector. But when it comes to business, Australia has shown itself to be sub-scale and insular. Seoul's export credit agencies, a mark of economic integration and regional influence, have extended $US82 billion of credit (third in the region) compared to Australia's $US2.7 billion (11th in the region).

http://www.afr.com/news/world/asia/lowy-asia-power-index-australia-down-in-regio...


Saudis Trying to Influence Iraq’s Political Landscape With Export Credit

(Financial Tribune, Tehran, 12 May 2018) At a recent conference in Kuwait, the Saudi kingdom pledged $1 billion in loans and $500 million in export credit to support Iraq's reconstruction after the war with IS, also known as Daesh. Saudi Arabia's rapprochement with Iraq in the run-up to its parliamentary elections appears to take place in the context of a new policy designed to expand its sphere of influence in the oil-exporting country, says a former diplomat.  The May 12 ballot will decide Iraq's leader for the next four years, when the government will face the monumental task of rebuilding entire cities and towns after decades of wars, internal strife and the massive harm inflicted by the self-styled Islamic State terrorist group.

https://financialtribune.com/articles/national/86222/saudis-trying-to-influence-...


World Bank Group’s MIGA to share risk with Japan’s NEXI through reinsurance

(Reinsurance News, Brighton, 9 May 2018) MIGA (Multilateral Investment Guarantee Agency), the political risk insurance arm of the World Bank Group, and NEXI, Japan’s state-owned export credit agency, have entered an official agreement to share risk, through reinsurance, on investments made by Japanese firms in developing countries.

https://www.reinsurancene.ws/world-bank-groups-miga-to-share-risk-with-japans-ne...


What's New April 2018

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Above Ground's Recommendations on Anti-Corruption Policies in EDC
  • Jubilee Australia: EFIC-funded PNG LNG Has Hurt PNG's Economy
  • Brexit Britain's UKEF looks to Commonwealth 2.0
  • UKEF support for arms sales under fire
  • Australian defence industry export plan release imminent
  • Russia to start shipping ECA funded arms to Armenia
  • Export Credit Agencies and a changing climate
  • JBIC & Kexim among lenders of $2.45 billion for Vietnam coal power plant
  • China-Africa summit preparations in high gear
  • Indian company defrauds banks despite Indian ECA caution list
  • EU may offer credit for Iranian trade if Trump pulls out of nuclear deal
  • Financial Times: President Erdoğan responds to pressure
  • German Bank, Norwegan ECA Join Responsible Ship Recycling Initiative
  • Airbus gets first European export credit since probes started
  • Russian ECA may finance construction of nuclear plant in Uzbekistan

Above Ground's Recommendations on Anti-Corruption Policies in EDC

(Above Ground, Ottawa, 30 April 2018) In this report, ECA Watch member Above Ground examines reforms needed to raise Export Development Canada’s anti-corruption client screening to a more robust standard. The recommendations are informed by leading anti-corruption policies and guidance documents from other export credit agencies, international financial organizations and the private sector. A Bombardier jet, the subject of an EDC loan to South Africa's Gupta family amid multiple corruption claims, has reportedly returned to South Africa, although Gupta familiy members have still effectively disappeared. Since 2016 the British, French and German export credit agencies have blocked support for Airbus on the basis of bribery concerns. The Above Ground report notes that in the second half of 2017, EDC provided Airbus with between $750 million and $1.5 billion in financing, as well as citing examples of questionable support for SNC-Lavalin and Kinross Gold. Canada's Auditor General today released a hard hitting report noting that EDC is mishandling loan risks and keeping board members in the dark about key financing arrangements.

http://aboveground.ngo/anti-corruption-and-export-development-canada/


Jubilee Australia: EFIC-funded PNG LNG Has Hurt PNG's Economy

(Jubilee Australia, Sydney, 29 April 2018) A new report on the economy of Papua New Guinea will reopen the case for the Australian government to be held accountable for the negligent decision to lend AU$500 million (US$376.5 million) of taxpayers' money to the PNG-LNG project. Jubilee Australia’s new report,‘Double or Nothing: The Broken Economic Promises of PNG LNG’, notes that “In 2008 Australian economics consultants, ACIL-Tasman provided inflated projections of growth in employment, essential services, household income and the broader economy if the PNG LNG project went ahead. This new analysis proves just how misleading these promises were and how PNG has slipped back into the poor policies associated with the resource curse. Currently, on almost all economic indicators, the people of PNG would have been better off had the project not happened at all." An Australian Broadcasting Corporation business report notes that the immense benefits predicted to flow from Papua New Guinea's liquified natural gas project have not been realised, and the country's economy has even gone backwards on some indicators.

http://www.jubileeaustralia.org/latest-news/new-jubilee-report-shows-that-efic-f...


Brexit Britain's UKEF looks to Commonwealth 2.0

(EURACTV, Brussels, 6 April 201) It used to be a Eurosceptic fantasy for the Commonwealth to replace the EU as the UK’s main trading partner. That may still be a fantasy, but Theresa May’s government sees the organisation, which includes Australia, Canada, Ghana, India, Nigeria, Pakistan and Singapore, as a launch pad for negotiating bilateral trade agreements and has earmarked six Commonwealth members as priorities for renewed incentives to promote trade and investment. Britain has already promised to double the current export credit finance for trade and investment with South Africa to £3.5 billion. South Africa is critical of the EU’s Economic Partnership Agreements (EPAs) with African regional blocs and expects Britain, once outside the EU, to offer better terms. In economic terms the Commonwealth is a fraction of the size of the EU market. Forty-two percent of the UK’s exports went to the EU in 2017, compared to around 7% for the ten largest Commonwealth markets.

https://www.euractiv.com/section/uk-europe/news/brexit-britain-looks-to-commonwe...


UKEF support for arms sales under fire

(London Review of Books, London, 26 April 2018) Arms exports constitute around 1.6% of total UK exports in value but receive 50% of export credits in the form of loans or guarantees, underwritten by the taxpayer. Almost half of British arms exports go to Saudi Arabia, up fivefold since the kingdom intervened in Yemen’s civil war. In July 2014, in an effort to pre-empt embarrassing revelations that might emerge from the UN’s decommissioning of Syria’s chemical weapons arsenal, the British foreign secretary made a tactical confession. Between 1983 and 1986, Britain had approved sales of chemical weapons precursors to Syria, which was known to be developing a massive weapons programme. William Hague told Parliament that the chemicals were probably ‘used by Syria in their programmes to produce nerve agents, including sarin’. In March 2015, the Committees on Arms Export Controls said that ‘the decision of the present government to give two export licence approvals for dual-use chemicals to Syria in January 2012 after the civil war had started in Syria in 2011 was irresponsible.’

https://www.lrb.co.uk/blog/2018/04/26/lloyd-russell-moyle/priority-markets/


Australian defence industry export plan release imminent

(Defence Connect, Sydney, 18 April 2018) The much-awaited Defence Industrial Capability Plan is set to be released soon, Defence Industry Minister Christopher Pyne has confirmed. The plan, which will aim to give Australian businesses a better idea of how to capitalise on the $200 billion of investment going into the industry, is set to be released before the federal budget on 8 May this year. The soon-to-be-released plan includes a new Australian Defence Export Office, Australia's first Defence Export Advocate, a $3.8 billion Defence Export Facility to be administered by Australia's export credit agency Efic and a $20 million a year commitment to implement the strategy.

https://wwaw.defenceconnect.com.au/key-enablers/2172-industry-plan-release-immin...


Russia to start shipping ECA funded arms to Armenia

(PanARMENIAN.Net, Yerevan, 29 March 2018) Russia will begin supplying arms to Armenia under a new defense loan agreement worth $100 million in 2018. In June 2015, an agreement was signed to provide Armenia with a Russian state export credit worth $200 million to purchase Russian-made military products. 18 contracts were signed within the framework of the loan, Armenia’s defense ministry reportedly said.

http://www.panarmenian.net/eng/news/253625/


Export Credit Agencies and a changing climate

(Observer Research Foundation Online, New Delhi, 19 April 2018) The role of Export Credit Agencies (ECAs) in promoting climate compatible development has been controversial. Despite independent and collaborative efforts from countries ensuring that [environmental degradation] is not an option when their ECAs extend support, fossil fuel financing has overshadowed ECAs energy financing portfolio. Oil Change reports that 88 percent of G20 ECA energy financing went towards fossil fuels. One of the worst performer amongst ECAs of G20 countries is the US EXIM Bank. Anecdotal evidences suggest that [ExIm's] support has enabled American exporters to walk the globe leaving behind green footprints. Yet an inquiry in our paper on the EXIM Bank’s authorisation portfolio paints a relatively different picture. [ExIm] authorisations towards environmentally beneficial exports and renewable energy exports constituted only 1.83% and 0.98% respectively of the Bank’s total authorisation. Evidently, the Bank’s performance has been dismal at best.

https://www.orfonline.org/expert-speak/export-credit-agencies-changing-climate/


JBIC & Kexim among lenders of $2.45 billion for Vietnam coal power plant

(Straits Times, Singaport, 18 April 2018) DBS and OCBC are among a group of banks and lending agencies that have signed off on financing of about US$1.87 billion (S$2.45 billion) for a controversial coal-fired power station in Vietnam. The 1,200MW Nghi Son 2 power station in Tinh Gia district, Thanh Hoa province, is one of a number of large coal-fired power plants planned to meet Vietnam's energy needs. But green groups, the International Energy Agency and the World Bank fear such big coal projects will exacerbate climate change by locking in years of polluting emissions. Burning coal is a major source of local air pollution and carbon emissions blamed for heating up the planet. The loan was signed last Friday (April 13) with export credit agencies Japan Bank for International Cooperation (JBIC) and Export-Import Bank of Korea (Kexim); Japanese banks Sumitomo Mitsui Banking Corp, MUFG, Mizuho and Shinsei Bank; DBS and OCBC; and Maybank of Malaysia. US Ex Im turned down funding in February 2018.

https://www.straitstimes.com/asia/se-asia/dbs-and-ocbc-among-lenders-of-245-bill...


China-Africa summit preparations in high gear

(New Times, Rwanda, 29 April 2018) Preparations for the 2018 Forum on China-Africa Cooperation (FOCAC) that will take place in September in South Africa are in high gear officials have said. In the 2015 summit, China pledged a new round of funding support to Africa’s development, worth $60 billion. The $60 billion pot was divided into $5 billion of free aid and interest-free loans, $35 billion of preferential loans and export credit and $5 billion dollars of additional capital for the China-Africa Development Fund and the Special Loan for the Development of African SMEs, and $10 billion of funding for a China-Africa production capacity cooperation. “Our investments in Africa exceeded 100 billion US Dollars and Chinese enterprises in Africa exceeded more than 3000; and over 70 percent of these are private Chinese companies,” said Dai Bing, the Director General of the Department of African affairs in the Chinese Ministry of Foreign Affairs.

http://www.newtimes.co.rw/news/china-africa-summit-preparations-high-gear-offici...


Indian company defrauds banks despite Indian ECA caution list

(Financial Express, New Delhi, 5 April 2018) The CBI today said it had registered a criminal case against a Vadodara-based company dealing in electric cable and equipment and its directors for allegedly cheating various banks to the tune of Rs 2,654 crore (US$400 million). The company and its directors managed to get the term loans and credit facilities in spite of the fact that they were named in the Reserve Bank of India’s defaulters list and ECGC (Export Credit Guarantee Corporation) caution list at the time of the initial sanction of credit limits by the consortium, the agency alleged.

https://www.financialexpress.com/industry/banking-finance/no-end-to-bank-scams-c...


EU may offer credit for Iranian trade if Trump pulls out of nuclear deal

(Guardian, London, 23 March 2018) The EU is looking to provide European companies trading with Iran access to emergency credit lines and funding support if Donald Trump presses ahead with his plan to withdraw from the Iran nuclear deal. A US pullout, leading to the reimposition of a tough sanctions regime, would expose multinational firms trading with Iran to potentially devastating loss of financial support by commercial banks. The US is due to make a decision on 12 May, and it has the potential to pitch Europe and the US into dispute.

https://www.theguardian.com/world/2018/mar/23/eu-may-offer-credit-to-firms-tradi...


Financial Times: President Erdoğan responds to pressure

(Financial Times, London, 28 April 2018) President Recep Tayyip Erdogan has brought forward by a year and a half elections he intends will crown his quest for one-man rule in Turkey. One reason for the snap early election is that Turkey’s overheating economy is vulnerable. The president needs to provide jobs and services to his base. Despite his xenophobic tub-thumping and absolute intolerance of dissent, Mr Erdogan does respond to pressure and has released some journalists. The German government, although courting Ankara’s help in holding back the flood of Syrian refugees, lost patience with what it saw as hostage-taking. It ordered a travel advisory steering German tourists away from Turkey, a review of export credit guarantees for German companies trading with Turkey, and a freeze on defence contracts.

https://www.ft.com/content/bdacd27e-4a3d-11e8-8ae9-4b5ddcca99b3


German Bank, Norwegan ECA Join Responsible Ship Recycling Initiative

(Maritime Executive, Fort Lauderdale, 25 April 2018) The German bank KfW IPEX-Bank has become the first German bank to join the Responsible Ship Recycling Standards initiative. With a lending volume of EUR 13.9 billion ($17 billion) in 2017, KfW IPEX-Bank is one of the top five ship financiers in the world, and, by joining the initiative, highlights that it is setting high standards for the environmental and social compatibility of its financing. At the end of May 2017, ABN Amro, ING and NIBC established the Responsible Ship Recycling Standards. The initiative now has eight members worldwide, with Nordea, DNB, SEB and Export Credit Norway having joined the three founding banks.

https://maritime-executive.com/article/german-bank-joins-responsible-ship-recycl...


Airbus gets first European export credit since probes started

(Reuters, Paris, 27 April 2018) Airbus has received European export credits for the first time since public funding was suspended in 2016 at the outset of a corruption investigation, the company said on Friday. The credit was granted under enhanced compliance procedures agreed between Airbus and the UK, French and German export credit agencies after the company’s own discovery of misleading applications for the aid triggered the Anglo-French probe.

https://www.reuters.com/article/airbus-results-exports/airbus-gets-first-europea...


Russian ECA may finance construction of nuclear plant in Uzbekistan

(UzDaily, Tashkent, 20 April 201) Uzbekistan plans to sign an agreement with Russia on construction of a nuclear power plant in 2018. Currently, Rosatom is building a similar station in Bangladesh at a cost estimated at about US$13 billion, of which US$11.3 billion is provided by Russia as a state export credit.

https://www.uzdaily.com/articles-id-43588.htm


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