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 July 2013

In this issue:

  • Ex-Im Bank Halts U.S. Funding Review for Vietnam Coal Plant
  • Australian coal projects could be ineligible to receive Chinese ECA support
  • Amnesty - UK Export Finance is sacrificing human rights on the altar of foreign trade
  • U.K. ECA Seeks Looser Rules To Level Playing Field
  • Boeing Sees Aircraft-Backed Bond Issues Doubling to $30 Billion
  • Australia's Rinehart clears hurdles on $10 bln iron ore project
  • Africa: Russian Investment Needs Credit Support
  • Parliament Approves $200mln Capital Increase for Export Guarantee Fund of Iran
  • Ministerial Meeting on Mobilizing Climate Finance Includes ECAs
  • US Ex-Im report grades competitiveness with other ECAs

Ex-Im Bank Halts U.S. Funding Review for Vietnam Coal Plant

(Bloomberg, Washington, 18 July 2013) The U.S. Export-Import Bank voted to stop consideration of financing for a coal power plant in Vietnam, the first such decision since President Barack Obama vowed to cut federal support for the projects... “By denying taxpayer backed financing for this dirty coal project, the Export-Import Bank put the action in the President’s Climate Action Plan,” said Doug Norlen, policy director of Pacific Environment, which is fighting these kinds of fossil-fuel projects. Until now, Obama’s push to double exports of U.S. goods and services had undercut his goal of reducing the greenhouse gases linked to climate change, as the government-backed lender expanded financing that, by its own accounting, added to greenhouse-gas emissions. As part of a “Climate Action Plan” released June 25th, 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. Obama’s coal pledge also comes at a time when the World Bank is mulling a proposal to limit its lending for coal projects in developing countries.

http://www.businessweek.com/news/2013-07-18/ex-im-bank-halts-u-dot-s-dot-funding...


Australian coal projects could be ineligible to receive Chinese ECA support

(Banktrack and Market Forces, Melbourne, 24 July 2013) Chinese banks have been notified that several Australian-based coal export projects could be ineligible for credit under China’s Green Credit Directive. A letter from international banking sector watchdog BankTrack and Australian environment group Market Forces has been sent to eight major Chinese overseas lenders and export credit agencies, highlighting an array of environmental and social impacts that would result from new coal export projects. It also profiles the corporate citizenry records of GVK and Adani, two Indian conglomerates who are both proposing new coal export projects. In June, sixty prominent Australians called on ‘big four’ banks to end fossil fuel investment.

http://us6.campaign-archive2.com/?u=ca4ff3016df790ab4c04c0ddd&id=a2824353df&e=a1...


Amnesty - UK Export Finance is sacrificing human rights on the altar of foreign trade

A new hard-hitting briefing from Amnesty International launched July 15 accuses the UK Government of allowing businesses to dip under the human rights radar when it comes to trade and investment. The 30-page document A history of neglect: UK Export Finance and human rights shines a light on a little known agency operating out of the Department of Business, Innovation and Skills – UK Export Finance (UKEF). Despite numerous Select Committee and Inquiry reports over the last five years recommending reforms to make it more transparent and accountable, successive governments have rejected those recommendations.

UKEF has responded to this report and Amnesty has counter-responded.

http://www.amnesty.org.uk/news_details.asp?NewsID=20879


U.K. ECA Seeks Looser Rules To Level Playing Field

(Spacenews, Glasgow, 18 July 2013) Britain’s export-credit agency, U.K. Export Finance, is unable to match the low-interest loans for satellite projects that its U.S., French, Canadian and Japanese counterparts offer because of national regulations that forbid interference with the private sector, a U.K. Export Finance official said July 16. Addressing the U.K. Space Conference in Glasgow, Jon Boyce said the agency is working to loosen rules that up to now have left the agency a bystander as more-aggressive agencies in North America, Europe and Asia battle to defend their domestic industry in satellite export competitions. On July 5th, Australian satellite operator NewSat announced it had secured financing to the tune of $611 million for its Jabiru 1 satellite project. NewSat worked with the Export-Import Bank of the United States and the French export credit agency Coface to secure the funding and selected Lockheed Martin to build the satellite. The Jabiru 1 spacecraft is expected to launch in 2015.

http://www.spacenews.com/article/financial-report/36283news-from-uk-space-confer...


Boeing Sees Aircraft-Backed Bond Issues Doubling to $30 Billion

(Bloomberg, Sydney, 10 July 2013) Aircraft buyers’ issuance of bonds backed by planes will double to about $30 billion next year, as banks and ECAs withdraw funding Boeing said... The industry needs $4 trillion to $5 trillion by 2031 to buy about 40,000 new planes required by growing demand from emerging economies, IATA said... Of concern is the withdrawal of funding from commercial banks as they limit lending in line with the Basel Committee on Banking Supervision’s 2010 revision of minimum capital levels, known as Basel III. Banks will provide about $29 billion to finance about 28 percent of aircraft deliveries this year, according to Boeing... Government export credit agencies, which stepped in to finance aircraft purchases after the 2008 credit crisis froze capital markets, are also cutting back. Funding from ECAs this year will be lower than Boeing’s initial forecast, at about 20 percent of the $104 billion total, compared with about 30 percent during 2012, Zolotusky said.

http://www.businessweek.com/news/2013-07-10/boeing-sees-aircraft-backed-bond-iss...


Australia’s Rinehart clears hurdles on $10 B iron ore project

(Reuters, Sydney, 18 July 2013) Australian mining magnate Gina Rinehart's $10 billion Roy Hill iron ore project has overcome key hurdles holding up debt negotiations, a move that could pave the way for the mine to start producing by September 2015, sources said on Thursday... Export credit agencies (ECAs), including Export Import Bank of Korea (KEXIM), Japan Bank for International Cooperation (JBIC) and Nippon Export & Investment Insurance (NEXI) had been pressuring Roy Hill shareholders led by Rinehart's Hancock Prospecting Pty Ltd to fully guarantee that the project reaches completion, in return for up to $5 billion of loans... Getting Roy Hill into production is likely to boost further the fortunes of Rinehart, already Australia's richest person with a net worth estimated by Forbes at $17 billion. However, it could also add to an expected glut of the steel-making ingredient as rivals Rio Tinto, BHP Billiton and Fortescue Metals Group crank up production just as demand in top consumer China is set to cool.

http://uk.reuters.com/article/2013/07/18/australia-ironore-royhill-idUKS9N0DT01U...


Africa: Russian Investment Needs Credit Support

(SpyGhana, Moscow, 14 July 2013) Over the past few years Russian companies have shown an increasing interest towards investment and preparedness to compete with other foreign players in Africa, but they have also complained bitterly of lack of state financial support and investment credit guarantees from policy banks and money-lending institutions. China, India and Japan, and more recently the United States have provided funds to support companies ready to carry out projects in various sectors in African countries.

http://www.spyghana.com/africa-russian-investment-needs-credit-support/


Parliament Approves $200mln Capital Increase for Export Guarantee Fund of Iran

(FarsNews, Tehran, 6 July 2013) The Iranian Parliament has allocated $200 million in the Budget Law of the fiscal year 2013-2014 as a capital increase for the Export Guarantee Fund of Iran, EGFI Chairman and CEO Taher Shah Hamed said. This capital increase could be considered as a compensation for the substantial amount of claims paid by the EGFI during the last two years in order to indemnify Iranian exporters and outward investors for losses incurred. With this capital increase, EGFI will have a better capital adequacy ratio, which in turn will boost its ability for protecting its clients, through issuing guarantees and insurance policies. EGFI, established in 1973, as the first-established Export Credit Agency (ECA) in Middle East and North Africa (MENA) region, is the official Export Credit Agency of Iran, 100% government-owned and affiliated with the Ministry of Industry, Mine, and Trade.

http://english.farsnews.com/newstext.aspx?nn=13920415000063


Ministerial Meeting on Mobilizing Climate Finance Includes ECAs

(US State Department, Washington, 11 April 2013) Ministers and senior officials from more than a dozen donor countries met in Washington, D.C. on April 10-11 to discuss ways to meet the challenge of scaling up low-carbon investment in developing countries. The meeting was convened and chaired by the United States. Participants included ministers and senior officials from a broad range of government entities, including ministries of foreign affairs, environment, finance, and development, as well as representatives from development finance institutions and export credit agencies. Countries represented included Australia, Canada, Denmark, the European Union and Presidency, France, Germany, Italy, Japan, New Zealand, Norway, Poland, Switzerland, the United Kingdom, and the United States. From the U.S. communique, it appears little concrete action was agreed upon. A follow-up meeting is apparently scheduled for Denmark in September that will include a section on ECAs and climate finance.

http://www.state.gov/e/oes/rls/remarks/2013/207420.htm


US Ex-Im report grades competitiveness with other ECAs

(Shopfloor, Washington, 30 July 2013) Ex-Im Bank Chairman Fred Hochberg outlined the unprecedented challenges facing U.S. exporters and released the annual competitiveness report that stacks Ex-Im Bank up against other major export credit agencies (ECAs) around the world. In presenting the report he noted:

  • "it’s time [to] drop the fantasy that a purely free market exists in the world of global trade... In the real world, our private-enterprises are pitted against an array of competitors that are often government-owned, government-protected, government subsidized, government-sponsored, or all of the above."
http://www.shopfloor.org/2013/07/ex-im-report-grades-competitiveness-identifies-...


Amnesty - UK Export Finance is sacrificing human rights on the altar of foreign trade

A new hard-hitting briefing from Amnesty International launched July 15 accuses the UK Government of allowing businesses to dip under the human rights radar when it comes to trade and investment. The 30-page document A history of neglect: UK Export Finance and human rights shines a light on a little known agency operating out of the Department of Business, Innovation and Skills – UK Export Finance (UKEF). Despite numerous Select Committee and Inquiry reports over the last five years recommending reforms to make it more transparent and accountable, successive governments have rejected those recommendations.

UKEF has responded to this report and Amnesty has counter-responded.

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Financing Nuclear Times

This newspaper style publication outlines the history of Export Credit Agencies' support for the nuclear industry and concludes by detailing the destructive projects still in the pipeline.

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