The private insurance COSEC has the mandate to manage the official export credit guarantee scheme on behalf of the Portuguese government.
Currently, COSEC shares are equally divided between two stakeholders: the Portuguese commercial bank BPI and the German credit insurer group Euler Hermes.
COSEC receives and analyses applications from clients for officially supported guarantees. Subsequently, COSEC submits the applications to the Ministry of Finance, that decides which clients and projects are being supported. Nevertheless, for operations whose value do not exceed five million euros, the decision to grant support lies with the Directorate General of Treasury and Finance (DGTF) - which is part of the Ministry of Finance. In addition according to Decree nº117/2011, the DGTF proposes and implements the principles that guide the concession of state guarantees to operations of credit, insurance for exports and Portuguese foreign investment. The Decree also proposes a certain management composition of the Directorate General of Treasury and Finance, providing that the institution should be headed by one General-Director and three General-Subdirectors.
The fundamental problem associated with COSEC is its low level of transparency. In particular, since May 2010 until January 2014, COSEC did not disclose on its website any information on the projects supported. Currently, COSEC only discloses information on projects classified under the categories A and B, i.e. with serious or moderate social and environmental impacts according to the OECD Common Approaches. The quality and the quantity of the information disclosed by COSEC do not allow civil society to efficiently monitor its activity.
Dodgy deals associated with COSEC
Cosec was approached to finance the Maheshwar dam in India, but ultimately refused to underwrite the damaging project.