What's New July 2017

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.

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  • G20 public finance for fossil fuels 'is four times more than renewables'
  • Russia's $70 Billion ‘Secret’ Export Credit Spending Lets Money Do the Talking
  • Is EDC complicit in support of foreseeable human rights violations?
  • White House under pressure to drop Export-Import Bank nominee
  • Global export credit falls amid US Exim wipeout
  • Turkey’s growing repression leads to review of German ECA guarantees
  • Eximbank of Korea to finance gas field development project in Mozambique
  • UK government signs deal with major banks and contractors to raise exports post-Brexit
  • SACE’s support for exports grows, reaches €7.8 billion in H1
  • Norway launches new ECA backing in push for diversity

G20 public finance for fossil fuels 'is four times more than renewables'

(Guardian, London, 5 July 2017) The G20 nations provide four times more public financing to fossil fuels than to renewable energy, a report has revealed ahead of their summit in Hamburg, where Angela Merkel has said climate change will be at the heart of the agenda. The authors of the report accuse the G20 of “talking out of both sides of their mouths” and the summit faces the challenge of a sceptical US administration after Donald Trump pulled out of the global Paris agreement. The new report by a coalition of NGOs found that the G20 countries provided an average of $71.8bn of public finance for fossil-fuel projects per year between 2013-2015, compared with just $18.7bn for renewable energy. Japan provided the most at $16.5bn per year, which was six times more than it allotted for renewables. China, which is curbing its coal use and increasingly being seen as a climate leader, provided $13.5bn for fossil fuels but just $85m for green energy. Germany, also seen a climate leader, provided $3.5bn of public finance for fossil fuels, compared with $2.4bn for renewables. Britain provided $972m for fossil fuels, compared with $172m for renewable energy. The public finance comes in the form of soft loans and export credit guarantees from governments, and, along with huge fossil fuel subsidies, makes coal, oil and gas plants cheaper, and locks in carbon emissions for decades to come...  The Natural Resources Defence Council has noted that most of these emissions don’t count towards the G20's carbon footprint as they are funding coal projects abroad.

https://www.theguardian.com/world/2017/jul/05/g20-public-finance-for-fossil-fuel...


Russia's $70 Billion ‘Secret’ Export Credit Spending Lets Money Do the Talking

(Bloomberg, Moscow, 25 July 2017) As state secrets go, Russia’s program of export finance and loans to other nations might be one of the worst kept. While discussions about aiding cash-strapped allies frequently spill into the open, the Finance Ministry’s debt chief Konstantin Vyshkovsky says information about individual loans isn’t public and a budget addendum on state financial and export credit is classified as “secret.” But, speaking in an interview at his office a short walk from the Kremlin, Vyshkovsky said Russia has committed about $70 billion in total to such loans [over 20+ years?], a figure that hasn’t been disclosed before... The vast majority of money made available by the government covers export finance, with the borrower getting Russian products and services and a domestic company receiving the funds. Nuclear projects account for 90 percent of the $70 billion total in state loans, followed by the defense industry and civil aviation, according to Vyshkovsky.

https://www.bloomberg.com/news/articles/2017-07-25/russia-s-70-billion-secret-sp...


Is EDC complicit in support of foreseeable human rights violations?

(Globe and Mail, Toronto, 21 September 2016) In 2015 Netsweeper Inc. of Waterloo Ontario, with support from Export Development Canada, sold Internet filtering technology to the government of Bahrain — a country criticized internationally for widespread suppression of human rights defenders through censorship, surveillance, arbitrary detention and torture. In 2016 Bahrain started using Netsweeper's Web-filtering software to keep a lid on dissent, a University of Toronto report said. It added that the Sunni-dominated monarchy is going so far as to use the software to deny Bahrain’s majority Shia citizens access to basic information about their religion and religious leaders. In 2015, the Netsweeper's software was also reported as being used to cut Yemen’s citizens off from learning about the civil war surrounding them. Following a February 2017 submission from ECA Watch member Above Ground which called for the adoption of regulatory and policy measures to ensure Canada is not complicit in foreseeable human rights violations associated with the use of digital censorship and surveillance technologies supplied by Canadian companies, EDC was called to to testify before Canada's Senate human rights committee. In their testemony, EDC stated that, at this point, the guarantee that is the subject of the complaint is no longer in place, nor is the company a customer of EDC.

https://www.theglobeandmail.com/news/national/bahrain-using-canadian-software-to...


White House under pressure to drop Export-Import Bank nominee

(Politico, Washington, 17 July 2017) President Donald Trump is standing behind former Rep. Scott Garrett, his choice to head the Export-Import Bank, amid escalating pressure from business groups to pull the plug on the nomination. His record has driven businesses that rely on the agency to try to stop his nomination, even though they also want the Senate to confirm nominees who would fill out its board. During his career in Congress, Garrett was one of the most outspoken critics of the bank. In 2015, he said the agency “embodies the corruption of the free enterprise system.”  The bank has been unable to approve deals worth more than $10 million because of a lack of a quorum. Three Democratic Senators have argued that “If confirmed as chairman of the board, Mr. Garrett would have wide latitude to control the board’s agenda and substitute his personal views for the statutory mission of the bank, destroying it from within after failing in his efforts to persuade his colleagues to legislate its demise”. Trumps new communications officer Anthony Scaramucci was a senior vice-president and chief strategy officer at the Export-Import Bank.

http://www.politico.com/story/2017/07/17/scott-garrett-trump-export-import-bank-...


Global export credit falls amid US Exim wipeout

(Global Trade Review, London, 12 July 2017) Medium and long-term export credit activity nosedived among OECD countries in 2016, led by a massive decline in activity at US Exim. With notable exceptions (including France, Italy, Sweden and the UK) export credit volumes declined in many major markets. Most obviously, there was a 97% fall in support from US Exim, Japanese agency support dropped by 63%, backing from Euler Hermes in Germany was down 39%, while the numerous Korean agencies saw their export credit support fall by 23%. The Competitiveness Report by US Exim outlines the “sluggish global export growth of around 2% last year”, along with “massive market liquidity” around the world, which led to historic levels of activity from specialist financiers, such as private export credit insurers. However, the fact that US Exim spent much of the year in liquidation, and has yet to be revived under the US President Donald Trump (although he has voiced unexpected support for the export credit agency [ECA]) are the primary reasons for its lack of action. These issues are not alluded to in the report, which does not mention the US president once in 68 pages.

https://www.gtreview.com/news/americas/global-export-credit-falls-amid-us-exim-w...


Turkey’s growing repression leads to review of German ECA guarantees

(The Telegraph, Berlin, 21 July 2017) Germany announced a series of hardline measures against Turkey on Thursday amid rapidly deteriorating relations between the two Nato partners. Sigmar Gabriel, the German foreign minister, accused the Turkish government of the “arbitrary” arrest of German citizens on its soil and demanded their immediate release. In a series of measures that could threaten the fragile Turkish economy, he issued tough new travel advice for Germans on visiting the country, and ordered a review of export credit guarantees for German companies investing in Turkey. He also said Germany would seek a review of €630m (£560m) of aid Turkey currently receives each year from the EU, and of Turkey’s partial membership of the customs union.

http://www.telegraph.co.uk/news/2017/07/21/angela-merkel-backs-hardline-policy-t...


Eximbank of Korea to finance gas field development project in Mozambique

(Club of Mozambique, Maputo, 30 June 2017) The Export-Import Bank of Korea announced on June 27 that it has signed a project financing contract on June 26 for offshore gas field development in Mozambique. The gas field development project is a joint project of the Korea Gas Corporation, Exxon Mobil, Italian energy company Eni and Empresa Nacional de Hidrocarbonetos (ENH) of Mozambique. The signing ceremony was held in Rome, Italy. In the project, the eight institutions including the Export-Import Bank of Korea, the Korea Trade Insurance Corporation and the Export-Import Bank of China are scheduled to provide a total of US$5 billion as creditors. According to the contract, the Export-Import Bank of Korea is responsible for one-fifth of the amount. NGOs have noted that the proposal to construct the onshore liquefied natural gas plant could result in the relocation of thousands, the destruction of fragile coral reefs, and greenhouse gas emissions equivalent to an estimated 5.2m metric tonnes of carbon dioxide each year.

http://clubofmozambique.com/news/eximbank-of-korea-to-finance-gas-field-developm...


UK government signs deal with major banks and contractors to raise exports post-Brexit

(Bloomberg, London, 13 July 2017) Five of the U.K.’s leading retail banks have pledged more financial support for small British exporters, with government backing, as Prime Minister Theresa May’s administration prepares the country for life after Brexit. The U.K. said its export credit agency reached an agreement with Barclays, HSBC, Lloyds Banking Group, RBS/NatWest and Santander UK Plc to provide export-related trade finance, for example working capital loans and bonds required by overseas buyers, backed by government guarantees. The extra help for British companies to export is part of the U.K. government’s effort to prepare the economy for leaving the EU. Currently, the UK is lagging behind a number of European countries where exports are concerned – such as Germany – and there are worries that trade from UK businesses could weaken following last year’s EU referendum result. UKEF’s credit risk appetite was doubled to £5 billion by the government at the last Autumn Statement and the Department for International Trade (DIT) has set up a ‘Team UK’ construction consortia to bid for overseas contracts. Infrastructure Exports UK will bring together 17 leading UK construction firms and consultants which, individually, have worked on large-scale global projects. IE: UK board members will meet three times a year to choose the projects they wish to bid for as a single business, with government support.

https://www.bloomberg.com/news/articles/2017-07-11/u-k-retail-banks-to-offer-mor...


SACE’s support for exports grows, reaches €7.8 billion in H1

(Italy/Europe 24, Rome, 26 July 2017) Italian export credit agency SACE is continuing to boost Italian companies abroad. Along with SIMEST – the other export and internationalization arm of state holding CDP – the SACE agency led by Alessandro Decio closed the first six months of this year with €7.8 billion of financial resources mobilized, up 19% compared to the same period of 2016.

http://www.italy24.ilsole24ore.com/art/business-and-economy/2017-07-25/italian-e...


Norway launches new ECA backing in push for diversity

(Global Trade Review, London, 5 July 2017) Norwegian export credit agency Giek has launched a new lender guarantee for export-related investments in Norway. The new product will provide guarantees to banks that finance corporate investment in Norway, where the investment directly or indirectly leads to exports. Aimed at boosting diversity in the oil and gas-rich nation, the guarantees will not be applicable to oil and gas processing plants, tourism, real estate development and large infrastructure projects.

https://www.gtreview.com/news/europe/norway-launches-new-eca-backing-in-push-for...