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 February 2014

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! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • OECD Secretary General Angel Gurria calls for zero net fossil fuel emissions by 2050
  • Friends of the Earth France urges Hollande to join Obama in cutting public coal financing
  • India's RIL to raise over $1 bn through export credit
  • US ready to offer credit for exporters to former pariah Myanmar
  • Brazil govt launches export credit insurance for SMEs
  • Andritz receives Austrian “Eyesore of the Year” award
  • Cape Wind gets $600 million loan for Nantucket offshore wind farm

OECD Secretary General Angel Gurria calls for zero net fossil fuel emissions by 2050

(Project Syndicate, Davos, 24 January 2014) There is no bailout option for the earth’s climate. Speaking at the World Economic Forum in Davos in January, Gurria noted "Our planet is warming dangerously. And, as the 2013 report by the Intergovernmental Panel on Climate Change makes clear, our carbon-dioxide emissions over the past half-century are extremely likely to be to blame. A more robust approach to global warming is needed if we are to avoid catastrophe. Unlike the recent financial crisis... This is why I am calling on all governments to be more ambitious – to aim for zero net emissions from fossil fuels by the second half of this century. Nothing short of a wholesale transformation of the energy economy will suffice. ECA Watch and many CSOs wrote the OECD Export Credit Working Group in September 2013 urging OECD Export Credit Agencies to discontinue their financing of coal projects.

http://www.project-syndicate.org/commentary/angel-gurr-a-says-that-nothing-short...


Friends of the Earth France urges Hollande to join Obama in cutting public coal financing

Friends of the Earth France has urged President Hollande and his government to end French support for coal-fired power plants via its export credit agency Coface and the various multilateral development banks in which it plays a significant role. US President Obama also vowed to press France on ending public financing of coal-fired power plants overseas except in the poorest of countries, in his meeting with Hollande on February 11th. It is understood that following their meeting, President Hollande refused to issue a joint public announcement of French/US agreement on moving away from coal financing.




India’s RIL to raise over $1 bn through export credit

(Business Standard, Mumbai, 20 February 2014) India's Reliance Industries (RIL) is in talks with four or five export credit agencies (ECA) to raise over $1 billion (Rs 6,220 crore) in the next four months, which will give it the largest number of ECA relationships globally. This is a part of the company’s plan to raise $13 billion debt to fund expansion of its petrochemical production capacity and gasification project for its refining facilities to improve margins... In the past two years the company has already tied up over $10 billion of foreign currency financing for this purpose. While about half of this is ECA backed financing backed by six ECAs, rest is from syndicated loans and foreign currency bonds. After tying up all its ECA facilities with another 4-5 ECA’s for an additional amount of $1 billion, RIL will have the largest number of ECA relationships globally. This would appear to mark an interesting trend whereby large multinational enteprises from emerging market countries secure ECA finance via their suppliers in industrialised countries.

http://www.business-standard.com/article/companies/ril-to-raise-over-1-bn-throug...


US ready to offer credit for exporters to former pariah Myanmar

(Seattle Times, Washington, 6 February 2014) The U.S. government export credit agency says it's ready to provide financing for American companies exporting to former pariah nation Myanmar... The Export-Import Bank made the announcement Thursday, saying it would help improve trade flows between the U.S. and the country also known as Burma and help reintegrate it into the global economy.

http://seattletimes.com/html/businesstechnology/2022849917_apxunitedstatesmyanma...


Brazil govt launches export credit insurance for SMEs

(fibre2fashion, Gujarat, 11 February 2014) The Brazilian Ministry of Finance has launched export credit insurance for micro, small and medium enterprises (MSMEs), including textile and apparel enterprises in the country, in order to encourage entrepreneurs to increase exports. According to a statement issued by Brazilian Government, the companies eligible to avail the export credit insurance are those with annual revenues of up to US$ 90 million and exports products worth US$ 1 million. The insurance will be granted on the export of goods and services with the marketing term financing of up to two years operations. The Brazilian Government's goal is to reach $1 billion in guarantees per year by 2018 through this tool. According to the Ministry, the lack of guarantees is a limitation for these MSMEs, including textile and apparel, to access public and private funding, and with this insurance the Government aims to facilitate exports of various products, including textiles and apparel, from the MSMEs.

http://www.fibre2fashion.com/news/textile-news/newsdetails.aspx?news_id=159629


Andritz receives Austrian “Eyesore of the Year” award

(ECA Watch Austria, Vienna, 21 February 2014) On February 20th, the Austrian company Andritz received the “Eyesore of the Year 2013” award for its involvement in three dam projects with tremendous negative ecological and human rights impacts: Xayaburi in Laos, Belo Monte in Brazil as well as Ilisu in Turkey. At the beginning of the week the company signed contracts for yet another disastrous mega-project: a gigantic pulp mill in the middle of Sumatra's rainforests. This new project involvement underlines the reasons for Andritz receiving this award, as it continuously takes part in some of the worst projects in the world... Andritz has received export guarantees from Austria's export credit agency OeKB and when an Asia Pulp & Paper project suffered a financial collapse some years later, Austrian tax payers lost more than EUR40 million... In November 2012 ECA Watch Austria and Friends of the Earth Austria sent a letter to Andritz expressing concern about APP's track record and offered a meeting with NGO representatives from Indonesia. Despite several attempts at contact, Andritz never reacted to this invitation.

http://www.schandfleck.or.at/wp-content/uploads/2014/01/ECA-Watch_PA_Andritz_Sch...


Cape Wind gets $600 million loan for Nantucket offshore wind farm

(Cape Cod Online, 26 February 2014) Cape Wind announced February 26th that a Danish credit agency has approved a $600 million loan for the proposed Nantucket Sound wind farm. Speaking at the GreenPower USA Offshore Wind Conference in Boston Cape Wind CEO Gordon said that EKF, the Danish Export Credit Agency, had informed Cape Wind of the loan's approval pending the “finalization of due diligence and completion of loan documentation.” Cape Wind, however, still faces a handful of legal challenges. Opponents filed the latest lawsuit challenging the project in January, only a day before the U.S. Court of Appeals in Washington, D.C., denied a petition by wind-farm opponents appealing the Federal Aviation Administration's approval of the project. A decision on whether Cape Wind will receive a $500 million U.S. Department of Energy loan guarantee is pending. Energy Department officials have so far declined to comment on the status of the loan.

http://www.capecodonline.com/apps/pbcs.dll/article?AID=/20140226/NEWS11/14022977...


What's New January 2014

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! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • OECD Agreement on Export Credits for Rail Infrastructure enters into force
  • Controversial Danish railway purchase guaranteed by SACE
  • Italy's SACE willing to cooperate with Belarusbank
  • Czech export bank and insurer targeted in police swoop
  • India's SBI & the Export-Import Bank of Korea sign agreement for Line of Credit
  • Indian ECA reluctant to take up $6-bn export deal

OECD Agreement on Export Credits for Rail Infrastructure enters into force

The EU and several other OECD members have agreed to allow their export credit agencies to underwrite longer repayment terms for loans financing infrastructure. The deal, entered into force on 1 January 2014, will cover the export of trains, tracks, rail IT and related material and will be a boost for railway industries.

The EU is home to some of the world's leading manufacturers of rolling stock, such as Alstom, Bombardier, Siemens, Talgo, Skoda and AnsaldoBreda. Europe is one of the world's largest markets for rail products.

For further details see:
http://www.oecd.org/tad/xcred/rsu.htm and Railway Gazette, 13 January 2014

http://trade.ec.europa.eu/eutn/psendmessage.htm?tranid=9009


Controversial Danish railway purchase guaranteed by SACE

Italy's "Ansaldobreda was awarded a contract in 2004 by Danish railways for 83 intercity trains worth a total of EUR 488 million, including an option for a further 67 trains. To guarantee this contract, SACE issued bonds for EUR 50 million. Ansaldobreda, a Finmeccanica company, is a world leader in the transport/mechanical sector and produces the new intercity trains in association with Pininfarina."  From page 39 of the SACE 2005 Annual Report  Following lengthy delays in delivery, including a report that AnsaldoBreda and then Italian prime minister Silvio Berlusconi gave Libyan dictator Muammar Gaddafi one missing trainset as a present on the occasion of the 40th anniversary of Gaddafi's revolution in 2009, Danish State Railways has taken over completion of the trains itself. Ansaldobreda has also been involved in the controversial cancelled sale of high speed trains to Dutch and Belgian rail operators. It is not known if SACE was involved in that sale.

http://tinyurl.com/lp37ajn


Italy’s SACE willing to cooperate with Belarusbank

(BelTA, Minsk, 11 January 2014) – The Italian financial community is interested in cooperation with Belarusbank following the visit of a Belarusbank delegation to Italy's state-run export credit agency SACE. The visit was arranged with the assistance of Italian bank Intesa Sanpaolo. During talks with the Italian bank and the export credit agency the parties discussed a possibility to provide financial and insurance coverage for joint projects and a number of technicalities. “The representatives of SACE said they are ready to continue cooperation with Belarusbank within the framework of the existing projects. They also said they would provide insurance coverage on individual projects,” the press service informed. SACE is controlled by the Italian Ministry of Economy and Finance and facilitates and promotes trade relations of Italian companies with their partners worldwide through credit insurance, investment protection, the provision of sureties and financial guarantees. Belarusbank is Belarus’ biggest multi-business financial institution that offers over 100 banking products and services to individual and corporate clients. The Republic of Belarus holds nearly 98% of the authorized capital of the bank.

http://news.belta.by/en/news/econom?id=737289


Czech export bank and insurer targeted in police swoop

(Czech Radio, Prague, 15 January 2014) Two state controlled Czech export credit and insurance institutions are at the centre of plans to boost the country’s export growth. But an expected strengthening of their role would appear to depend on dealing with problems from the recent past. Czech police swooped on the Prague headquarters of both institutions in dawn raids on January 15. State insurance company EGAP’s spokeswoman said police were primarily interested in contracts concerning around 10 export projects, which likely included the already well publicized problems concerning insurance for a Czech exporter to build glass works in Russia and Ukraine. The daily Lidové Noviny reported that one of the cases under investigation is the crashed deal to sell three Boeing 737 aircraft owned by Czech Airlines to Armenian airline Armavia.The incoming coalition government made up of Social Democrats, ANO, and the Christian Democrats has pledged to expand the role of ČEB and EGAP and use them to the utmost to help direct Czech exports away from the slumbering economies of the European Union to the high growth likes of Brazil, Russia, India, China, and South Africa.

http://www.radio.cz/en/section/business/czech-export-bank-and-insurer-targeted-i...


India’s SBI and the Export-Import Bank of Korea sign agreement for Line of Credit

India's largest lender State Bank of India (SBI) and the Export-Import Bank of Korea (Korea Eximbank) today signed a loan agreement under which SBI would access a $200 million revolving line of credit from Korea Eximbank. A press release from SBI said it would utilise the line of credit, or interbank export loan, to finance the foreign currency requirements of Indian companies importing goods and services from South Korea.

http://netindian.in/news/2014/01/16/00027591/sbi-export-import-bank-korea-sign-a...


Indian ECA reluctant to take up $6-bn export deal

(Indian Express, 27 January, Mumbai) At a time when India is leaving no stones unturned to boost exports and bring down current account deficit, Essar Steel is unable to execute a $6 billion steel products export deal as the domestic general insurers are reluctant to provide cover to the deal. Such a cover is necessary for the deal to ensure that if overseas buyers fail to pay the export proceeds, the banks which will be funding the deal can recover the amount from insurance companies. Without such a cover, banks and financial institutions will be  hesitant to take up financing big export deals. According to industry sources, Essar had approached state-owned Export Credit Guarantee Corporation (ECGC) which has a  monopoly in providing such covers but the latter responded with reluctance. “We were not comfortable with the idea taking up such a big export deal. If we take such a huge cover, it will exceed our exposure norms,” said a senior ECGC official.

http://indianexpress.com/article/business/companies/insurers-reluctant-to-take-u...


What's New December 2013

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! you can subscribe at www.eca-watch.org  Questions? Email info@eca-watch.org

  • German human rights organizations sue Ministry of Economics over ECA transparency
  • Boeing sees export credits waning as aircraft funding source
  • US Export-Import Bank Board Adopts Revised Environmental Guidelines to Reduce Greenhouse Gas Emissions
  • Why US Export-Import Bank Backs Australian Billionaire Heiress Gina Rinehart
  • Aman Union Launches Export Credit Database
  • Russia's VTB Bank boosts trade and export finance business
  • Novel structure for Chinese export credit bond

German human rights organizations sue Ministry of Economics over ECA transparency

Three organizations want to enforce access to information regarding documents on export credit guarantees - Human rights assessments not disclosed
 
BERLIN, 9 December 2013 – Human rights organizations, Amnesty International Germany, urgewaldand and CounterCurrent have filed a suit against the federal government for the first time.The government had rejected a freedom of information request from the organizations to disclose information on human rights protection in the allocation of export credit guarantees. "The relevant Economics Ministry claims that it takes sufficiently into account the human rights situation on the ground when allocating guarantees. At the same time they refuse to publish the relevant information. "That doesn’t create confidence", says Verena Haan, responsible for business and human rights with Amnesty Germany.
             
Through the lawsuit at the Administrative Court of Berlin, the three organizations seek to understand how the Federal Government assesses the human rights impacts of the projects they support. In July 2012, they had requested access to the due diligence reports for a number of projects. They asked, for example, about mining and dam projects and power plants in countries such as Kazakhstan, Mauritania, Tajikistan, Azerbaijan and Turkey, as well as for projects in Belarus. "In these countries and sectors human rights violations are likely or even regular. Forced resettlement and environmental destruction take place, labour rights or freedom of expression are ignored. We therefore want to know exactly how the companies and the federal government fulfil their human rights duty of care. However, the federal government treats this information like a state secret" criticizes Regine Richter of urgewald.
 
The basis of the lawsuit are the Freedom of Information Act and the Environmental Information Act, which are supposed to grant free and unfettered access to information held by administrations. In its rejection of the application the Ministry of Economy cited as reasons the protection of intra-governmental consultations, confidentially collected information, international relations and business confidentiality. "We have made ​​clear that our request is limited to the environmental and social part of the due diligence reports and that we are not interested in further sensitive data. The fact that our request is completely rejected, is unacceptable and contradicts the law. Therefore we are now going to court" explained Heike Drillisch of CounterCurrent.
 
In 2012 the federal government supported exports and investments of German companies to developing and emerging countries through guarantees worth nearly 30 billion Euro. The Ministry of Economics decides upon guarantees together with the Ministry of Finance, the Ministry for Economic Development and Cooperation and the Foreign Office. The UN Guiding Principles on Business and Human Rights of 2011 stress export promotion as an area in which highest human rights duty of care should prevail.
 
http://www.eca-watch.org/node/3538


Boeing sees export credits waning as aircraft funding source

(Reuters, 10 December 2013, Seattle) - More commercial jet buyers will tap rapidly-expanding capital markets to finance $112 billion of jet sales in 2014 as state-backed export credits become pricier and more politically sensitive, Boeing Co (BA.N) said on Tuesday. Money from government-backed export credit agencies (ECA), once used to pay for the bulk of jet deals, will make up 18 percent of plane financing next year, down from 23 percent in 2013, the U.S. aircraft maker said in an annual forecast.

http://www.reuters.com/article/2013/12/10/us-boeing-finance-idUSBRE9B90ML2013121...


US Export-Import Bank Board Adopts Revised Environmental Guidelines to Reduce Greenhouse Gas Emissions

(PR Newswire, 12 December 2013, Washington) The board of directors of the Export-Import Bank of the United States (Ex-Im Bank) has adopted revisions to its environmental procedures and guidelines governing high-carbon intensity projects, claiming this aligns the Bank with President Obama's goal of reducing carbon pollution, while maintaining the Bank's focus on continuing to help create and support American export-related jobs.

http://www.digitaljournal.com/pr/1638059


Why US Export-Import Bank Backs Australian Billionaire Heiress Gina Rinehart

(International Business Times, 20 December 2013, Washington) Heavy equipment maker Caterpillar Inc., General Electric and Atlas Copco AB, a Swedish industrial holding company, are the latest beneficiaries of credit financing from the U.S. Export-Import Bank. The federal government’s export-promoting agency said Thursday it would extend $694.4 million in loans (backed by the full faith and credit of the U.S. taxpayer should the lending go sour) to Australia’s Roy Hill Holdings. The mining giant controlled by Australian heiress Gina Rinehart is trying to shore up $6.2 billion in capital before the end of the year to fund a massive $8.9 billion iron ore project in Pilbara, a mineral-rich region in the arid western part of the country. The announcement came two days after the Korea Export-Import Bank committed $1 billion to one of the world’s largest financing deals to fund a private project.

http://www.ibtimes.com/why-us-export-import-bank-backs-australian-billionaire-he...


Aman Union Launches Export Credit Database

(Zawya, 10 December 2013, Qatar) During the 4th Annual Meeting of the Aman Union Dr. Abdel Rahman El-Tayeb Taha, the Secretary General of the Aman Union, who is also the Chief Executive Officer of the Islamic Corporation for the insurance of Investment and Export Credit Insurance (ICIEC), and Mr. Abdulaziz Bin Nasser Al-Khalifa, Chief Executive Officer of Qatar Development Bank launched the Aman Union Database... The Database is the first of its kind in the Arab and Islamic region, established for the benefit of national export credit insurance agencies in the region and will enable the Subscribers in the Database to share and purchase credit information reports, credit opinions on entities worldwide and to exchange their underwriting experience on buyers and banks.

http://www.zawya.com/story/AMAN_UNION_Launches_its_Database-ZAWYA20131211071304/


Russian VTB Bank boosts trade and export finance business

(4traders.com, 31 December 2013, Moscow) VTB Bank arranged deals worth more than US$ 4 billion in 2013 as part of a large-scale project to develop its trade and export finance business, thereby increasing the relevant portfolio by over 150%. The project was advanced by new financial solutions for corporate clients, consistent development of relations with foreign financial institutions, priority development of new products and optimisation of the trade and export finance business process... VTB Bank has been working efficiently to optimise and expand cooperation with several Export Credit Agencies, including the Export Insurance Agency of Russia (EXIAR).

http://www.4-traders.com/BANK-AVTB-OAO-6499155/news/Bank-VTB-OAO--VTB-boosts-tra...


Novel structure for Chinese export credit bond

(International Financing Review, 14 December 2013, London) Standard Chartered has come up with a novel way of transferring the risk of lending to unrated Chinese exporters and importers to the capital markets. The bank has brought two structured financings to the international markets in recent months backed by loans to Chinese entities. Each loan benefits from a Chinese export credit agency guarantee... The most logical candidates for these deals are exporters and importers, which would be eligible for guarantees from credit agencies, such as Sinosure and the Export-Import Bank of China.

http://www.ifre.com/novel-structure-for-china-bond/21124786.article


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