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 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


What's New March 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.

  • Bombardier-Gupta affair provokes timely public debate on accountability of EDC
  • Report finds major banks ramped up fossil fuel financing to $115 billion in 2017
  • Judge Demands Explanation in Pipeline Lawsuit
  • UKEF seeks new markets at Brexit looms
  • Hermes as a factor in German Turkish relations?
  • Turkish Bridge Attracts $2.8 Billion From Banks & KEXIM
  • Saudi Arabia’s use of ECA finance in Iraq is making Iran nervous
  • Australia moves up defence exporter list
  • Canadian business optimistic about potential in China: EDC
  • New ICC report confirms trade & export finance are not risky business
  • Banking on Energy: The Determinants of Export Credit Agency Energy Financing from China and Japan
  • Italy's SACE plans to back nearly $5bn in UAE projects

Bombardier-Gupta affair provokes timely public debate on accountability of EDC

http://aboveground.ngo/bombardier-gupta-accountability-edc/

(Above Ground, Ottawa, 26 March 20188) Ongoing media coverage regarding the sale of a Bombardier jet to the Gupta family in South Africa has triggered an important public debate about the accountability and transparency of Canada’s export credit agency, Export Development Canada (EDC). With Parliament set to review the agency’s governing legislation this year, the timing for such a discussion could not be better. In response to a Globe and Mail op-ed asserting that public oversight of EDC “is not just scant, it’s non-existent,” EDC recently published a statement in which it defends its “exceptional track record,” arguing that it operates transparently, that it is subject to “multiple levels of government and public oversight” and that it welcomes public scrutiny of its operations.

We offer several observations to further this important debate.




Report finds major banks ramped up fossil fuel financing to $115 billion in 2017

(BankTrack, Amsterdam, 28 March 2018) A report released today by Rainforest Action Network, BankTrack, Indigenous Environmental Network, Oil Change International, Sierra Club, and Honor The Earth, endorsed by over 50 organisations around the world, reveals that in spite of the urgent climate crisis, 2017 was a year of backsliding by private banks. Despite 2017 being the costliest year on record for weather disasters, the new report reveals that banks increased extreme fossil fuel financing last year [US$115 billion], led by a more than doubling in lending to tar sands companies and pipelines.The report provides invaluable data on specific banks and sectoral investments. In our November 2017 What's New, ECA Watch noted that export credit agencies fund almost $40 billion worth of fossil fuel projects each year. (Some of that overlapping as guarantees for private banks.) That is a whopping 12 times more than what they spend on clean energy projects.

http://mailchi.mp/banktrack/report-finds-major-banks-ramped-up-fossil-fuel-finan...


Judge Demands Explanation in Pipeline Lawsuit

(WTOP, Washington, 30 March 2018) Texas-based pipeline developer Energy Transfer Partners in August sued Earth First, Greenpeace and BankTrack for up to $1 billion, alleging they disseminated false and misleading information about the $3.8 billion pipeline that’s now moving oil from North Dakota to Illinois, and instigated violent protests while the pipeline was under construction. Greenpeace and BankTrack maintain the lawsuit is meritless and an attack on free speech. The Center for Constitutional Rights maintains Earth First is an unstructured social movement or philosophy, similar to Black Lives Matter, and can’t be sued. However, U.S. District Judge Billy Roy Wilson says Earth First has been a listed plaintiff in three federal lawsuits in the 1980s and 1990s, involving a water project in Arizona, a wilderness area in Oregon and a New Mexico canyon important to American Indians. “If Earth First can sue, it seems to me that it is subject to being sued,” Wilson said in a March 22 order.

https://wtop.com/national/2018/03/judge-demands-explanation-in-dakota-access-law...


UKEF seeks new markets at Brexit looms

(Arabian Business, Dubai, 30 March 201) As the spectre of Brexit looms, speculation has swirled that the European Union’s loss will be the Gulf Cooperation Council’s (GCC) gain. British firms have been eyeing international expansion ahead of the country’s departure from the economic and political bloc for some time, and these closer economic ties are now rapidly becoming a reality. The opening of a permanent UK Export Finance office in Dubai is a clear sign of a booming post-Brexit relationship between the UK and the Middle East. In addition to the GCC, UKEF is looking to African infrastructure projects. The UK’s Trade Commissioner for Africa Emma Wade-Smith recently noted that the decision for the UK to move away from the European Union provides an opportunity to re-engage and refresh the way we operate across Africa. “For example, the UKEF has the ability to support infrastructure projects in South Africa (up to £4bn), Kenya (up to £1bn) and Nigeria (up to £750m). British home secretary Amber Rudd recently celebrated the strength and depth of the UK and Pakistan's "shared history" in announcing that UKEF would double its support, allowing Pakistan’s buyers to access finance to source high-quality UK goods and services.

http://www.arabianbusiness.com/politics-economics/393226-how-the-uk-is-doubling-...


Hermes as a factor in German Turkish relations?

(Handelsblatt, Berlin, 7 March 201) Turkey and Germany recently agreed to try to “normalize” their fraught relationship. Turkey had adopted hostage-taking as an instrument of foreign policy, with Germany being a target. Germany’s response was to reconsider economic aid and export credit guarantees, to advise German tourists against travel to Turkey, and to put weapons deliveries to Turkey on hold. Between 2006 and 2011 Germany had delivered 354 Leopard 2 tanks to Turkey... Nevertheless, there is every sign that Germany is intent on going back to business as usual as soon as possible. One German-Turkish joint venture, for instance, is helping Turkey to construct its own battle tank, the Altay. The German partner, Rheinmetall, will produce the first 100-200 tanks of the 1,000 planned.

https://global.handelsblatt.com/opinion/germany-must-not-sell-soul-turkey-restor...


Turkish Bridge Attracts $2.8 Billion From Banks & KEXIM

(Bloomberg, London, 1 March 2018) A consortium of South Korean and Turkish construction firms are raising 2.3 billion euros ($2.8 b) from a group of about 20 banks and South Korea's export credit agency to build a 3.1 billion euro suspension bridge and toll roads in western Turkey.

https://www.bloomberg.com/news/articles/2018-03-01/turkey-south-korea-jv-is-said...


Saudi Arabia’s use of ECA finance in Iraq is making Iran nervous

(Economist, London, 8 March 2018) At a conference in Kuwait last month, the Saudi foreign minister, Adel al-Jubeir, pledged $1bn in loans and $500m in export credit to support Iraq’s reconstruction after the war with Islamic State (IS). Saudi interest in Iraq was initially pricked by America, which has been marshalling Gulf support to help stem Iran’s push west. Iraq, under Saddam, threatened to invade Saudi Arabia. More recently, it has allowed Shia militias backed by Iran to set up camp on the Saudi border. In response the kingdom, which considers itself the region’s Sunni champion, is accused of bankrolling Sunni jihadists in Iraq. In 2015 Muhammad bin Salman was central to restoring diplomatic relations with Iraq and last year reopened the kingdom’s borders. He has shifted money from Sunni politicians to more effective Shia ones. Diplomats note the disparity in help offered by Saudi Arabia and Iran, which pledged nothing at the February conference in Kuwait. “Having failed to outfight Iran, the Saudis now want to outspend it,” says a delighted Iraqi official. Meanwhile, EU officials are trying to think of mechanisms to counter potential future sanctions against European companies and banks, the more important challenge is how to entice Iran to remain committed to the nuclear deal, even if Washington withdraws. Iranian officials have been clear that Tehran would only stay committed if it receives enough benefits from staying in the deal.

https://www.economist.com/news/middle-east-and-africa/21738405-kingdom-eyeing-so...


Australia moves up defence exporter list

(Defence Connect, North Sydney, 13 March 2018) The latest Stockholm International Peace Research Institute (SIPRI) report looking at trends in international arms transfers has seen Australia move up to 19th place among the top 25 largest exporters of major arms. News of the move to 19th place comes just weeks after the federal government unveiled its Defence Export Strategy, which outlined its ambitions to become a top 10 major arms exporter. A $3.8 billion Defence Export Facility will be administered by Australia's export credit agency, Efic.

https://www.defenceconnect.com.au/key-enablers/2029-australia-moves-up-defence-e...


Canadian business optimistic about potential in China: EDC

(Xinhua, Ottawa, 21 March 2018) There are currently over 1,000 Canadian companies doing business in China, more then 600 of them supported by the EDC, the country's export credit agency which offers trade finance, export credit insurance, bonding services and foreign market expertise, EDC's Liew told Xinhua in a phone interview from Hong Kong. China and Canada plan to double their bilateral trade volumes during the decade from 2015 to 2025. China remains Canada's second largest trade partner, second largest export destination and second largest import source for years.

http://www.xinhuanet.com/english/2018-03/21/c_137053585.htm


New ICC report confirms trade & export finance are not risky business

(International Chamber of Commerce, Paris, 6 March 2018) The 2017 ICC report draws on information from 22 member banks to present a global view of the credit risk profiles of trade and export finance transactions. It is based on over US$10.5 trillion of exposures and more than 20 million trade finance transactions from 2008 to 2016—constituting approximately 40% of global traditional trade finance flows. The trade finance products in the register are import letters of credit, export letters of credit, loans for import/export, and performance guarantees.

https://iccwbo.org/media-wall/news-speeches/new-icc-report-confirms-trade-export...


Banking on Energy: The Determinants of Export Credit Agency Energy Financing from China and Japan

(Global Development Policy Cente, Boston, 28 February 2018) ABSTRACT  In a very short period, Export-Import Bank of China (CHEXIM) and China Development Bank (CDB) have become some of the largest Export Credit Agencies in the world. This paper examines the extent to which CHEXIM and CDB behave similarly to Japan Bank for International Cooperation (JBIC), their Japanese counterpart in energy loans approval. Utilizing a new database on publicized overseas loans for energy from the two banks, this paper econometrically analyses the determinants of CHEXIM and JBIC’s overseas energy loans in a comparative perspective. Like their Japanese counterparts, the Chinese banks exhibit a certain degree of concern for the recipient’s domestic economy but exhibits risk seeking tendencies as well. Unlike current JBIC energy loans, Chinese energy loans have a significant correlation to China’s growing energy dependence. Contrary to c,laims that China’s ECA is a tool to gain geopolitical advantage; geopolitical concerns do not appear to be a determinant of CHEXIM’s overseas finance. (PDF file)

http://www.bu.edu/gdp/files/2018/03/Economy-in-Command_Ye_Draft_26.01.pdf


Italy's SACE plans to back nearly $5bn in UAE projects

(Arabian Business, Dubai, 3 March 2018) Italy's SACE says evaluating nearly $5bn of UAE projects Export credit agency sees its exposure in the Middle East almost triple to $14.7bn since opening offices in Dubai. It said growth is expected to continue in the region as it is currently evaluating new projects in the MENA region worth €12 billion ($14.7 billion) – nearly $5 billion of which is dedicated to the UAE.

http://www.arabianbusiness.com/politics-economics/390486-italys-sace-says-evalua...


What's New February 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.

  • Export credit agencies lurk in the shadows of responsible financing
  • G20 Countries' Public Coal Financing Reaches 5 Year High
  • Vietnam Pulls Request for U.S. Ex-Im Help to Build a Coal-Fired Power Plant
  • Standard Chartered & ECAs ‘breaching climate policy’ with Vietnam coal plant investment
  • Attorney calls for sanctions against Energy Transfer Partners in Dakota Access pipeline suit
  • Airbus executives get swept away by a corruption investigation
  • BAE proposes UKEF financing to Malaysia for Typhoon jet deal
  • No job estimates on arms export plan
  • Western banks rush to gain deals on China's Belt and Road Initiative
  • U.S. Treasury official slams China's 'non-market behavior'
  • US leads the way on protectionism in 2017 with tarifs and export credit
  • Bipartisan group of House lawmakers urge action on Export-Import Bank nominees
  • U.S. urges help for Iraq, extends $3 billion Ex-Im credit line
  • South Africa joins Afreximbank as a shareholder
  • South Africa’s Guptas hid Bombardier jet, EDC says in court repossession efforts
  • Armenian NGO challenges controversial ECA supported gold mine
  • Brazil grants US$2 billion ECA credit line to Angola
  • Anadarko agrees Mozambique LNG sale, banks/ECAs discuss finance terms

ECAs go to Market

(Finance & Trade Watch and CEE Bankwatch, Dec. 2017) Export credits are big business. Members of the industry’s Berne Union, both state and private, insured approximately USD 1.9 trillion per year between 2012 and 2016, of which USD1 trillion was state ECA insured. That amount far exceeds the total investments of multilateral lenders such as the World Bank and the regional development banks and represents some 11% of world trade Between 2015 and 2017, Finance & Trade Watch and Bankwatch, together with their national partners, researched state export credit agencies (ECAs) in seven countries of the European Union (Austria, Czech Republic, Croatia, Hungary, Poland, Romania and Slovakia). The aim of this research was to assess how the procedures and performance of these institutions comply with the relevant national, European and international regulatory frameworks. These include transparency, accountability, environmental and social standards as reflected in the OECD (Common Approaches), the EU (ECA Regulation) and the UN (Sustainable Development Goals, the Aarhus Convention and the Paris Agreement). Their report finds: a lack of ECA transparency, dubious investements, particularly in fossil fuels, projects contrary to national greenhouse gas commitments under the Paris Agreement, and OECD and EU standards and monitoring which are voluntary and unable to guarantee that prohibited investments are being approved. This has led to their involvement in a number of economically and politically-compromising projects. This first-of-its-kind research examines ECAs in the ‘new’ EU Member States and compares these with an example from the EU 15 – the Austrian ECA OeKB – as well as examples from other EU 15 countries. It shows regulatory gaps and offers a range of policy recommendations. The full report is available here and a summary here.

http://www.intellinews.com/comment-export-credit-agencies-lurk-in-the-shadows-of...


G20 Countries' Public Coal Financing Reaches 5 Year High

(Natural Resources Defense Council, New York, 8 February 2018) In 2017, financing from G20 governments for overseas coal projects reached a 5 year high, totaling at least $13 billion in loans, credits, and guarantees. This financial support for coal projects directly undermines G20 climate commitments and ignores the reality that a rapid coal phase out is needed if the world is to reach the 1.5 degree temperature goal under the Paris Climate Agreement. This is the 2nd year in a row that G20 public financing has increased for coal power projects in foreign countries. G20 public financing here refers to financial backing from government export credit agencies, like Japan Bank for International Cooperation, development banks, like China Development Bank, and government insurance entities, like Korea Trade Insurance Corporation. Public financial support is given to benefit domestic companies who are involved in projects abroad — for example, in 2017, Japan Bank of International Cooperation provided a $730 million dollar loan to enable Marubeni, a Japanese company, to develop the 1000 MW Cirebon 2 Coal Power Station in Indonesia. Public financial support can take the form of loans, guarantees, export and import credits, grants, and equity financing.

https://www.nrdc.org/experts/han-chen/g20-countries-public-coal-financing-reache...


Vietnam Pulls Request for U.S. Ex-Im Help to Build a Coal-Fired Power Plant

(New York Times, Hong Kong, 13 February 2018) A Vietnamese company is no longer seeking American financial support to build a coal-fired power plant in Vietnam, bringing to an abrupt end a closely watched test of whether Washington would back international projects that could potentially contribute to climate change. On Thursday, the Export-Import Bank of the United States, a lender run by the American government, said the Vietnamese state-controlled company, PetroVietnam, had withdrawn its application for financial support. In this case, a green light would have allowed PetroVietnam to purchase millions of dollars’ worth of turbines and other equipment from General Electric, the American manufacturer. The project, which is already under construction, faced intense criticism inside and outside the United States. Environmental and other groups said the project would have had a greater environmental impact than reports submitted by PetroVietnam had suggested. The World Bank and other major institutions have increasingly avoided backing projects supported by developing countries that burn coal and other fossil fuels, which emit greenhouse gases that contribute to climate change. The UK’s version of the Ex-Im Bank had declined to offer financial support for the Long Phu 1 project for similar reasons.

https://www.nytimes.com/2018/02/11/business/us-exim-vietnam-coal.html


Standard Chartered & ECAs ‘breaching climate policy’ with Vietnam coal plant investment

(Climate Home News, London, 14 February 2018) The London-based bank plans to co-finance Nghi Son 2 power plant, which NGOs say uses dirty old technology, against company and OECD guidelines. The proposed financing arrangements also appear to breach the Organisation for Economic Cooperation and Development’s guidelines on coal, which restrict governments from using public export finance for new coal plants. Both Japan's and Korea’s export credit agencies, which help companies to export and win international business, are backing the project. Environmental NGOs Market Forces and Greenpeace analysed data from the project’s environmental impact assessment,  released last week by Japan Bank for International Cooperation (JBIC) — an export credit agency wholly owned by the Japanese government. Vietnam’s expansion of coal-fired power generation to meet booming energy demand has led to major concerns over public health. The number of coal plants in Vietnam is projected to rise from 38 to 133, including all plants currently planned or under construction. Citing a study published in the journal Environmental Science & Technology  last year, Myllyvirta said coal-fired power plants were responsible for an estimated 4,300 premature deaths in Vietnam in 2011 alone. The study forecasts that by 2030 there will be more than 19,220 deaths per year due to coal pollution.

http://www.climatechangenews.com/2018/02/14/standard-chartered-breaching-climate...


Attorney calls for sanctions against Energy Transfer Partners in Dakota Access pipeline suit

(Associated Press, Bismark, 9 February 2018) Attorneys for a Florida-based environmental publication want a federal judge in North Dakota to sanction the Texas-based developer of the Dakota Access oil pipeline in a dispute over whether the publication can be sued. Earth First Journal maintains Energy Transfer Partners attorneys aren't acting in good faith by associating the publication with the Earth First social movement, which the company contends was part of an effort to undermine the pipeline project and the company. Energy Transfer in August sued Greenpeace, BankTrack and Earth First for up to $1 billion, alleging the environmental groups disseminated false and misleading information about the $3.8 billion pipeline moving oil from North Dakota through South Dakota and Iowa to Illinois, and instigated violent protests. Journal attorney Pamela Spees maintains the journal and movement aren't the same thing, and that the insistence of company attorneys to the contrary is "intentional and reckless disregard of their duties to the court." Spees asked Hovland to order the plaintiffs to pay the center's fees and to educate lawyers at the plaintiff firms about the Federal Rules of Civil Procedure, which she claims have been violated.

https://www.nydailynews.com/newswires/news/business/attorney-calls-sanctions-dak...


Airbus executives get swept away by a corruption investigation

(The Economist, Singapore, 8 February 2018) A management shake-out may reawaken national rivalries at the European aerospace giant. “The success of Airbus is intimately linked to the success of John [Leahy],” says Eric Schulz, successor to John Leahy, who has been chief salesman for the planemaker since 1994. Mr Leahy’s aggressive strategy to gain orders expanded Airbus’s market share for civil jets from 18% in 1994 to over 50%. But this year’s Singapore Airshow, which began on February 6th, will be Mr Leahy’s last before retirement. Staff turnover does not stop there. In December the firm said Tom Enders, its German-born chief executive, would step down in 2019; his French second-in-command, Fabrice Brégier, will leave this month. These changes follow the news that several countries, including Britain, France and America, are investigating allegations that in the past Airbus bribed officials to win contracts. That created divisions between French and German executives over how to respond.

https://www.economist.com/news/business/21736580-management-shake-out-may-reawak...


BAE proposes UKEF financing to Malaysia for Typhoon jet deal

(Reuters, London, 12 February 2018) BAE Systems will provide Malaysia a UK government-backed financing deal if it decides to replace its fleet of combat jets with the Eurofighter Typhoon, senior company officials said. Malaysia has for several years been weighing France’s Rafale jet and the Eurofighter Typhoon, built by a European consortium including Britain’s BAE, as it looks to buy up to 18 jets to replace its Russian MiG-29s - most of which are grounded. The contest, potentially worth over $2 billion, is one of the biggest fighter deals under consideration in Asia. Financing would be provided via the UK Export Finance export credit agency.

https://www.reuters.com/article/us-bae-systems-malaysia/bae-proposes-uk-governme...


No job estimates on arms export plan

(Associated Press Australia, Sydney, 28 February 2018) The Defence Department can't say exactly how many Australian jobs will be created out of the Turnbull government's plan to make the country a top 10 global arms exporters in the next decade. The issue was canvassed during a robust exchange between Greens senator Peter Whish-Wilson and Defence Minister Marise Payne at a Senate estimates hearing on Wednesday. The centrepiece of the government's ambitious plan is a $3.8 billion defence export facility within the export credit agency to help companies get finance to underpin sales of equipment overseas. "How is this good bang for our buck?" Senator Whish-Wilson asked, adding he wanted evidence it was the most cost-effective way for the government to create jobs. Department official Marc Ablong said no calculations had been carried out. "It's up to other agencies to determine whether there are more cost-effective ways for the government to spend the government's resources," Mr Ablong said.

http://www.news.com.au/national/breaking-news/no-job-estimates-on-arms-export-pl...


Western banks rush to gain deals on China's Belt and Road Initiative

(Xinhua, Beijing, 28 February 2018) With China's Belt and Road Initiative gaining more recognition globally, Western banks are rushing in for a piece of the pie in this once in a generation opportunity. British and U.S. banks, including Citigroup, HSBC and Standard Chartered have been seizing opportunities brought about by the initiative proposed by Chinese President Xi Jinping in 2013. The initiative aims to create greater trade, infrastructure and people-to-people links between Asia, Europe, Africa and beyond by reviving and expanding the ancient Silk Road routes. The modern version comprises an overland Silk Road Economic Belt and a 21st Century Maritime Silk Road. As one example, Standard Chartered Bank has taken the initiative as a key part of its plan to generate the revenue growth necessary to achieve its target of making a return on equity above 10 percent. The bank has won 20 financing deals linked to the initiative over the past four years, such as a 515 million U.S. dollars project financing for a power plant in Zambia, a 200 million dollars loan for a Bangladesh electricity plant, and a 42 million dollars export credit facility for a gas terminal in Sri Lanka. [We will be following how ECAs swing in behind the banks on this initiative.]

http://www.xinhuanet.com/english/2018-02/28/c_137005861.htm


U.S. Treasury official slams China's 'non-market behavior'

(Reuters, Washington, 21 February 2018) The U.S. Treasury’s top diplomat ramped up his criticisms of China’s economic policies on Wednesday, accusing Beijing of “patently non-market behavior” and saying that the United States needed stronger responses to counter it. He said market-oriented, democratic governments were awakening to the challenges posed by China’s economic system, including from its state-owned banks and export credit agencies. And he reiterated his view that China had stopped liberalizing its economy and was actually reversing these trends. China says that its state-owned enterprises operate on free-market principles and is battling within the World Trade Organization’s dispute settlement system to be recognized as a “market economy” -- a designation that would weaken U.S. and EU trade defenses. [and their own ECA trade subsidies?]

https://www.reuters.com/article/us-usa-china-treasury/u-s-treasury-official-slam...


US leads the way on protectionism in 2017 with tarifs and export credit

(Global Trade Review, London, 22 February 2018) No less than 467 protectionist measures were implemented worldwide in 2017, with the US responsible for 90 of them. But while protectionism is still rising, the scale of the increase is slowing: in 2016 there were 827 new measures introduced. Research from Euler Hermes, a trade credit insurer, found that the US “decided to bolster measures to counteract perceived protectionism from key competitors” in 2017. The Trump administration implemented 30 new import tariff measures, 20 anti-dumping measures and 17 tariffs on China alone, with the headline tariff being the 30% import tariff on Chinese solar panels. Euler Hermes also found that many trading powerhouses use what it considers to be protectionism to boost their exports. Among these is export credit agency (ECA) support, with Japan being highlighted for adopting 137 protectionist measures pertaining to its ECAs over the past four years.

https://www.gtreview.com/news/global/us-lead-the-way-on-protectionism-in-2017/


Bipartisan group of House lawmakers urge action on Export-Import Bank nominees

(The Hill, Washington, 20 Feb 2018) A bipartisan group of 68 House lawmakers are urging Senate leaders to get the Export-Import Bank running at full speed again. In December, the Senate Banking Committee approved four nominees to the Ex-Im board — Kimberly Reed, Spencer Bachus, Judith Pryor and Claudia Slacik. Since 2015, the Ex-Im Bank has been without a quorum on its board, which prohibits the agency from making deals of more than $10 million. Without a quorum in fiscal 2017, the bank only authorized $2.4 billion in loans, guarantees and insurance, supporting just 2,412 exporters, 40,000 jobs and $7.4 billion in U.S. export sales, the letter said. That is a sharp decline from 2014, when the bank approved $20.5 billion in business, which supported 3,563 exporters, 165,000 jobs, and $27.5 billion in exports.

http://thehill.com/policy/finance/374755-bipartisan-group-of-house-lawmakers-urg...


U.S. urges help for Iraq, extends $3 billion Ex-Im credit line

(Reuters, Kuwait, 13 February 018) The United States has urged members of the coalition fighting Islamic State to help rebuild Iraq or risk a reversal of the gains made against the group. Secretary of State Tillerson said the official U.S. export credit agency, the Export-Import Bank of the United States (EXIM), would sign a $3 billion memorandum of understanding with Iraq’s finance ministry “that will set a stage for future cooperation”. Iraqi Prime Minister Haider al-Abadi, whose government puts the costs of reconstruction at more than $88 billion, said Iraq could not rebuild without outside help.  Iraq received pledges of $30 billion, mostly in credit facilities and investment, on Wednesday from allies but this fell short of the $88 billion Baghdad says it needs to recover from three years of war. Officials say almost $23 billion is needed for short-term reconstruction and over $65 billion in the medium term. UNDP Administrator Achim Steiner told Reuters Iraq might have been unable to attract more pledges due to its association with corruption. Investors see Iraq as the 10th most corrupt country, according to Transparency International.

https://www.reuters.com/article/us-usa-tillerson-mideast/u-s-urges-help-for-iraq...


South Africa joins Afreximbank as a shareholder

(Business Live, Johannesburg, 20 February 2018) Showing its commitment to promoting intra-African trade and economic integration, South Africa has taken up shareholding in the African Export-Import Bank (Afreximbank), the continental multilateral trade finance institution. The South African government is represented by the Export Credit Insurance Corporation of South Africa (ECIC) as its designated investor, in line with the terms of the provisions of the charter of the bank. The shareholding makes South Africa the 47th African country to join Afreximbank as a participating state and/or shareholder. “South Africa accounts for about 30%–35% of total intra-African trade,” he added, “making its membership critical for the attainment of the bank's strategic goal of moving intra-African trade share of Africa’s total trade from about 15% currently to 22% by 2021, and raising its annual value to more than $250bn by that year.

https://www.businesslive.co.za/bd/business-and-economy/2018-02-20-sa-joins-afrex...


South Africa’s Guptas hid Bombardier jet, EDC says in court repossession efforts

(Globe and Mail, Toronto, 19 February 2018) Canada's export credit agency is worried that a Canadian EDC financed Bombardier luxury jet could become the escape vehicle for the controversial Gupta brothers as they flee a corruption prosecution in South Africa, according to court papers filed by the agency in Johannesburg.

https://www.theglobeandmail.com/news/world/south-africas-guptas-hid-bombardier-j...


Armenian NGO challenges controversial ECA supported gold mine

(Armenian Environmental Front, Yerevan, 11 February 2018) In February 2017, the Armenian Environmental Front (AEF) published information on supporters of a gold mine in Amulsar Mountain next to the resort of Jermuk. They now have presented the key entities responsible for funding and equipping the Amulsar gold mine project. The AEF is challenging plans to develop a gold mine in close proximity to the environmentally sensitive Jermuk resort in violation of Armenian legislation. Environmental and social impact assessments are said to be substantially incomplete and incorrect and international expert groups from Australia, USA and Canada, having studied dozens of documents available on the Lydian International corporate website, have presented their assessments and conclusions on the environmental risks of the gold project in Amulsar. They note: "Our overall conclusion remains that the high risk of acid drainage and contaminant leaching, the poor geochemical evaluation, the inadequate water quality predictions and mitigation measures and Lydian’s inexperience combine to make this an environmentally high-risk project during mining and for a lengthy period after operations cease." The AEF notes that a number of ECAs and international finance bodies have supported the project, among them: SEK - Sweden’s Export Credit Corporation (US$50 million via Dutch ING Bank); EKN - Swedish Export Credit Agency (Guarantees for the SEK credit); Sandvik SRP AB – a Swedish mining equipment company (recipient of the SEK & EKN support); the Swiss-Swedish ABB Group; the International Finance Corporation (IFC) of the World Bank Group (IFC's compliance branch concluded in 2017 that there were "shortcomings in IFC’s appraisal and supervision of the project as relate to a  number of the issues raised in the complaints and found that IFC’s pre-investment E&S review of the project was not commensurate to risk.";  and the European Bank for Reconstruction and Development (EBRD) (Which has apparetnly refused to respond to the arguments of Armenian ecological organizations concerning social and ecological risks of the project and continues to support it.)

http://www.armecofront.net/en/amulsar-2/those-responsible-for-funding-and-equipp...


Brazil grants US$2 billion ECA credit line to Angola

(Macahub, Luanda, 12 February 2018) Brazil has agreed to grant a credit insurance facility to Angola under the Export Guarantee Fund and support for the equalisation of interest rates through the Brazilian Export Financing Programme (Proex) for goods and services up to US$2 billion. Brazilian resources now made available through the state-owned National Bank for Economic and Social Development (BNDES) will be used to carry out some projects included in the Public Investment Programme of the State Budget. BNDES has financed several projects with social and economic impact in Angola, including the construction of the Laúca Hydroelectric Dam, the Cambambe Dam, the water supply system for the cities of Benguela, Lobito and Catumbela, the construction of the Luanda-Viana Expressway, the construction of Catumbela International Airport and the construction of the Capanda Industrial Hub, among others.

https://macauhub.com.mo/2018/02/12/pt-brasil-concede-linha-de-credito-de-2000-mi...


Anadarko agrees Mozambique LNG sale, banks/ECAs discuss finance terms

(Reuters, London, 20 February 2018) Anadarko Petroleum’s plan to export liquefied natural gas (LNG) from Mozambique moved a step closer to completion on Tuesday after it agreed a 15-year LNG sales and purchase agreement (SPA) with Electricite de France. France’s state-controlled utility will take 1.2 million tonnes of LNG annually from the Mozambique Area 1 marketing venture led by Anadarko and consisting of Japanese trader Mitsui, India’s ONGC Videsh and Thailand’s PTT, among others. LNG project developers across the board have struggled to find the long-term buyers needed before banks and export credit agencies could commit financing for new plants.

https://af.reuters.com/article/commoditiesNews/idAFL8N1QA7U4


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