What's New May 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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  • Indonesian Community Reps File Cirebon Coal Plant Objections with JIBC
  • World Coal: IEA CCC Report - Global financing for coal power goes East
  • Turkey in 'final phase' of secretive Saudi arms export deal
  • N.J. critic of Export-Import Bank appointed to overhaul federal credit agency
  • Airbus tightens fraud controls
  • Iran in talks with UK export credit agency over jetliner export funding
  • China's Export Credit Agency Covering Iran Investment
  • Like spring weather, Delta’s positions on EXIM change quickly and dramatically
  • State Bank of India could fund Gautam Adani’s coal mine in Australia
  • Kenya’s stake in pan African ECA diluted
  • US Trade Finance for Cuba ‘Much Further Down the Road’ says Ex-Im Bank Officer

Indonesian Community Reps File Cirebon Coal Plant Objections with JIBC

(Friends of the Earth Japan, Tokyo, 24 May 2017) On May 24, 2017, two Indonesian community representatives affected by the JIBC supported Cirebon Coal-fired Power Plant Project in West Java arrived in Japan and handed their objections to the Japan Bank for International Cooperation (JBIC) with respect to the expansion of the Unit 2 power plant (1,000 MW). At the same time, Indonesian and Japanese NGOs filed their complaints with the Japanese National Contact Point (NCP) under the OECD Guidelines for Multinational Enterprises (MNEs). Japanese public and private sectors, including Marubeni and JERA as investors, have pushed through the project despite already serious damages to the livelihoods of the local community and the April 19 revocation of its environmental permit by the District Court in Bandung.

http://www.foejapan.org/en/aid/170524.html


World Coal: IEA CCC Report - Global financing for coal power goes East

(World Coal, Surrey, 19 May 2017) Development finance is essential to help the advancement and empowerment of low and middle income economies. But, past announcements by multilateral development banks restricting finance for greenfield coal plants cast doubts on future funding. This approach to coal investments spread to other development agencies and also became a foundation for the rules governing OECD export credits (pdf). A new report from the IEA Clean Coal Centre by Paul Baruya, Trends in international lending for coal-fired power plants, examines the implications of these announcements and explores the roles and policies of different financial institutions. In 2014 alone, US$152 billion of funding was received by the coal power and mining sectors from such institutions. Of this total, just US$9 billion was provided by multilateral development banks and export credit agencies. Thus these publicly financed institutions make a minor contribution to direct funding of coal projects, although they maintain a role in attracting commercial funding to higher risk projects.

https://www.worldcoal.com/power/19052017/iea-ccc-global-financing-for-coal-power...


Turkey in 'final phase' of secretive Saudi arms export deal

(Defense News, Ankara, 3 May 2017) Turkey’s defense and procurement officials are expecting to finalize a large defense export contract with Saudi Arabia, but its contents will be kept top secret. Turkish Defence Minister Fikri Isik has said the defense export contract with Saudi Arabia will be the largest-ever single export deal for the Turkish industry...  Turkey, he said, would launch a new export lending mechanism outside the scope of Eximbank loans in order to finance Turkish exports. Eximbank is a state-owned export credit bank in Turkey. The Minister said his government was working on a broad plan to boost Turkish defense and aerospace exports. He admitted that financing was often a major problem for potential markets.

http://www.defensenews.com/articles/turkey-in-final-phase-of-secretive-saudi-exp...


N.J. critic of Export-Import Bank appointed to overhaul federal credit agency

(National Public Radio Newsworks, Delaware, 16 May 2017) Republicans who want to disband the Export-Import Bank of the United States were heartened during the presidential campaign when candidate Donald Trump indicated he would kill it if he were elected president. Now, President Trump said he supports the bank and the micro-financing it gives U.S. companies. Republican Ryan Costello and other lawmakers from the Delaware Valley are in that corner as well, but are now perplexed by the President's tapping of former U.S. Rep. Scott Garrett to serve on the  bank's board. Garrett, a founding member of the very conservative House Freedom Caucus, has long been a critic of the bank — even voting against its reauthorization. Democrats fear Garrett and Trump are trying to undermine the bank from within. Democrat Brendan Boyle said it's difficult to discern whether Trump is being devious or if he just doled out a favor to a loyalist who recently lost a bid for re-election. "It could just be that there's no forethought in this whatsoever,” Boyle said.

http://www.newsworks.org/index.php/local//item/103984-nj-critic-of-export-import...


Airbus tightens fraud controls

(Air Transport World, Arlington, 22 May 2017) Airbus has established a new independent compliance review panel (ICRP) to ensure “irreproachable” behavior, following allegations of fraud, bribery and corruption in its civil aviation business. The move follows an investigation by the UK Serious Fraud Office (SFO) and France’s Parquet National Financier (PNF), after Airbus self-disclosed misstatements and omissions found a year ago. Revelations started emerging in April 2016, when the UK Export Finance (UKEF), Britain’s export credit agency (ECA), placed a temporary hold on all guarantees and credit export support of Airbus products. Coface, the French ECA, and Euler Hermes, the German ECA, followed within days. The probe is focused on alleged misuse of third-party agents and European export credit by Airbus.

http://atwonline.com/manufacturers/airbus-tightens-fraud-controls


Iran in talks with UK export credit agency over jetliner export funding

(Reuters, Paris, 4 May 2017) Iran is in talks with Britain's export credit agency to facilitate the financing of aircraft sales to state airline IranAir as part of its pact with world powers to lift sanctions over its nuclear program, a senior Iranian official said. IranAir's plan to buy more than 180 jets from Airbus and Boeing is the most visible economic deal on the table after major powers last year lifted most sanctions on Iran in return for restrictions on its nuclear activities. But financing for the purchases has been hard to secure because most Western banks are holding back, concerned about the future of the 2015 agreement after U.S. President Donald Trump called it a bad deal and ordered a review. So far, IranAir has taken delivery of just three Airbus jets, for which it paid cash, industry sources say. Meanwhile, other news reports say that Theresa May’s snap decision to hold general elections in June discourages Britain’s export credit arm from taking defining decisions affecting foreign policy during such a critical time. The government is also likely to postpone dealing with the issue until after the elections. Meanwhile, the Iranian government was under immense pressure to show results of the Nuclear Deal before the country’s elections in May. The Slovakian and Finnish ECAs have also signed deals with Iran.

http://www.reuters.com/article/us-iran-britain-financing-exclusive-idUSKBN1800VW


China's Export Credit Agency Covering Iran Investment

(Financial Tribune, Tehran, 9 May 2017) China Export & Credit Insurance Corporation (Sinosure) will provide export insurance for Chinese construction and production investments in Iran. According to a recently signed Meorandum of Understanding, the Chinese export credit agency will insure state-owned and private Chinese companies that intend to invest in Iranian projects, enabling them to use new lines of credit, particularly for the export of high-value added goods from China. Prior to this, the entity had provided credit lines and export insurance for mining and refinery projects in Iran.

https://financialtribune.com/articles/economy-business-and-markets/64046/chinas-...


Like spring weather, Delta’s positions on EXIM change quickly and dramatically

(eTurbo News, Hawaii, 11 May 2017) A recent high-profile example of Delta’s advocacy agility was its position on export credit financing and reauthorization of the Export-Import Bank (EXIM). Delta opposed it before it supported it. In the beginning, Delta was a leading voice opposing reauthorization of the EXIM. It was a visible and vocal member of the chorus decrying export credit financing as inherently bad public policy and crony capitalism. Delta claimed it was chased out of the US-India market by EXIM lending to Air India to purchase Boeing 787 Dreamliners. Simultaneously, it spent millions of dollars repeatedly suing EXIM seeking to use the courts to block guarantees for Air India’s 787s. Then Delta pivoted. It claimed it never opposed export credit financing and, after waging a scorched earth lobbying campaign against EXIM, it in fact was prepared to support its reauthorization provided the legislation included an anticompetitive carve-out prohibiting widebody financing for state-owned carriers.

https://www.eturbonews.com/154422/like-spring-weather-deltas-positions-change-qu...


State Bank of India could fund Gautam Adani’s coal mine in Australia

(National Herald, New Delhi, 9 May 2017) Australia's Market Forces environmental finance group has warned that Indian businessman Gautam Adani could turn to the Indian government to get his $21 billion coal mine funded, as Australian and international investors increasingly pull out of the project due to environmental concerns. "The (funding) model now looks like a combination of North Australia Infrastructure Funding (NAIF) funding, State Bank of India (SBI) and foreign export credit providing the bulk of the debt. The remainder would likely rely heavily on Indian commercial banks that Adani has a close relationship with, and some other foreign commercial banks that have not yet ruled out finance," Julien Vincent, the Executive Director at Market Forces, told National Herald, replying to an emailed questionnaire. Taxpayers in Australia and India are most likely to fill the funding gap that Adani is experiencing, Vincent said.

https://www.nationalheraldindia.com/news/2017/05/09/sbi-could-fund-gautam-adanis...


Kenya’s stake in pan African ECA diluted

(The Star, Nairobi, 8 May 017) Kenya's shareholding in African Trade Insurance Agency has been marginally diluted following entry of four new investors, the largely political risk and investment guarantee firm has said. Chief executive George Otieno said Kenya's stake has dropped to about 12 per cent from 15 per cent. This was after Ethiopia and Zimbabwe joined the pan-African investment and commercial risk insurance provider last year, while Ivory Coast came on board last month. UK’s national export credit agency, UK Export Finance, has also acquired undisclosed stake in ATI, joining African Development Bank and Italian Export Credit Agency as non-state shareholders. “Kenya, however, remains the single largest shareholder in ATI and by some measure the single biggest beneficiary of ATI cover since its inception,” ATI’s chief underwriting officer John Lentaigne said. “We have investments in Kenya equivalent to 15 per cent (about Sh1.08 trillion) of the current GDP (about Sh7.2 trillion) since its (ATI's) inception.” The company was formed by seven African countries, with Kenya as single largest shareholder, in 2001 but started operating fully in 2003. The agency was financially and technically supported by the World Bank Group during its formation.

http://www.the-star.co.ke/news/2017/05/08/kenyas-stake-in-pan-african-firm-dilut...


US Trade Finance for Cuba ‘Much Further Down the Road’ says Ex-Im Bank Officer

(Sputnik News, Washington, 15 May 2017) Trade finance to Cuba is not expected in the near future because of the quantity of work that needs to be completed, including the country's payments due to export credit agencies, US Export-Import Bank (Ex-Im) Business Development Officer Kate Bishop told Sputnik on Monday. "It looks like trade restrictions are easing, but trade finance, which is where we come in, I think that would be much further down the road before it would even be considered," Bishop said on the sidelines of the Fifth Annual Doing Business with the BRICS Conference on Monday.

https://sputniknews.com/business/201705151053637579-us-trade-cuba-exim/