Index for June 2013

Volume 12, Issue 6

  • Société Générale has accepted the mandate to structure export financing of Alstom turbines for the controversial Kaliningrad nuclear power project, with a potential export credit guarantee from the French State, via Coface. European NGOs and civil society organizations are organizing street actions in front of Société Générale branches in at least eight cities across France, as well as in Russia and Poland from June 24-30, criticizing Société Générale's irresponsibility and demanding its immediate withdrawal from this dangerous, useless and dodgy project.

  • (Bloomberg, Washington, 25 June 2013) President Barack Obama pledged to end U.S. government financing of overseas coal projects, a promise that could end millions of dollars in support for power plants in nations such as Vietnam and India. As part of a “Climate Action Plan” released today, Obama called for ending U.S. support of foreign coal-fired power plants, unless they are in the poorest nations or have expensive carbon-capture technology. “This is an important move to stand up and say, ‘Coal is not an acceptable fuel source for the 21st century,’” Justin Guay, a Washington representative for the Sierra Club, said in an interview. “It’s a really strong political signal.” ... Until now, Obama’s push to double exports of U.S. goods and services had conflicted with his environmental goal of reducing the greenhouse gases linked to climate change, as the U.S.- backed Export-Import Bank had expanded financing that, by its own accounting, led to more and more greenhouse-gas emissions. Other NGOs and environmental groups have said Obama's policies don't go far enough.

  • (GAO, Washington, 13 June 2013) Ex-Im's Business Plan concluded that the exposure limits in the Reauthorization Act were appropriate, but GAO’s May 2013 report found weaknesses in the methodology Ex-Im used to justify that conclusion. In a 30 May 2013 report, GAO found that although Ex-Im's forecast model is sensitive to key assumptions, GAO found that Ex-Im did not reassess these assumptions to reflect changing conditions or conduct sensitivity analyses to assess and report the range of potential outcomes. GAO used historical data in lieu of these assumptions and found that Ex-Im's forecast of exposure could be higher than the limit set by Congress for 2014. During a 13 June 2013 hearing, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) announced his opposition to the Export-Import Bank and questioned the bank’s place in the free-market system. Hensarling said he disagrees with people who say the bank is self-sustaining and does not pose a high risk to taxpayers... In a 6 June 2013 20-2 vote, the Senate Banking Committee approved the nomination of Fred Hochberg as the president of the U.S. Export-Import Bank for a second term.

  • (JBIC, Tokyo, 6 June 2013) The Japan Bank for International Cooperation (JBIC) has signed a general agreement with the Ministry of Economic Development of the Government of Mongolian, offering the first export credit line of the equivalent of 8 billion yen (US$82 million). The credit line is cofinanced with private financial institutions, with Nippon Export and Investment Insurance (NEXI) providing Buyer's Credit Insurance for the portion cofinanced by private financial institutions. It provides for medium- and long-term financing in Japanese yen or U.S. dollars for the purchase of Japanese machinery and equipment by Mongolian local companies.

  • (FreshBusinessThinking, London, 20 June 2013) British businesses received £4.3 billion worth of support from the government through UK Export Finance (UKEF) in 2012-13, up from £2.3 billion in the previous year, and the highest in 12 years.
    UKEF support has included:

    • £2 billion for Typhoon aircraft and spare parts to Oman
    • $700 million of finance for UK exports to a petrochemical facility in Saudi Arabia
    • £26 million in support for satellites to Russia
    • £280,000 support for transport consultancy in Gambia.
    • Smaller companies which benefit indirectly through the supply chains of major customers like Airbus, BAE Systems and Rolls-Royce

    The Saudi petrochemical facility is the largest single limited recourse project financing UKEF has ever supported and will be carried out in partnership with other export credit agencies: US Ex-Im, K-Exim, K-sure, Hermes, FIEM and Coface.

  • (Bloomberg, Ottawa, 24 June 2013) Export Development Canada, a trade financing agency, sold the nation’s first offshore yuan- denominated bonds last week as exports to China grow. EDC, which supports Canadian businesses globally, raised 100 million yuan ($16.3 million) from a sale of 2.1 per cent notes due July 2014, according to data compiled by Bloomberg. China imports C$19 billion ($18 billion) of merchandise from Canada, almost three times as much as the other BRIC nations — Brazil, Russia and India — put together.

  • (CSRwire, Ottawa, 3 June 2013) Export Development Canada (EDC), Canada's Export Credit Agency, today issued its Annual Report on Corporate Social Responsibility (CSR). The report chronicles EDC’s CSR activities in 2012, outlining how the Corporation has adapted to the new reality of international business, where global integration into emerging markets continues to increase. The report also captures EDC’s CSR key achievements this past year in both practice and policy, and presents important updates surrounding issues that impact key stakeholders including clients, employees and the public... The 2012 CSR report provides an overview of EDC’s financial transactions around the world and how EDC applied its CSR due diligence, including EDC’s first major project financing in India. “Most organizations tend to link their CSR policies to compliance to international standards, but many are now recognizing that a compliance-based approach is often not up to the task,” added Ms. Schneider. “EDC has evolved beyond compliance in many areas of CSR to a more principles-based philosophy, because today there are no simple recipes when every situation is different.”

  • (HeraldOnline, Rock Hill SC, 17 June 2013) Reportlinker.com announces a new US$5354 research report about the market for trade credit cover in Austria, Belgium, France, Germany, Italy, the Netherlands, Poland, Spain, Switzerland and the UK. Valued at just under EUR 4 billion in gross written premiums in 2012, this market began growing again in most countries following the macro-economic shocks of 2009 and 2010 which caused cover to be withdrawn from areas perceived to carry excessive risk.