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 March 2019

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!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • The smart money is jumping the sinking coal ship
  • New OECD Bribery and Export Credits Recommendation
  • NAM Urges Senate to Get Ex-Im Bank Back Up and Running
  • Levelling the playing field: UK exporters want more
  • WTO says U.S. failed to halt state tax subsidy for Boeing
  • Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers
  • Kenya 'inflated' SACE loans insurance cost by Sh10 billion
  • Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects
  • EU exemption on export credits: is everyone a winner?
  • East Africa: China to Host Second Belt and Road Forum
  • EX-IM Hosts 2019 Annual Conference in Washington, D.C.

The smart money is jumping the sinking coal ship

(Thomson Reuters Foundation, London, 1 March 2019) A torrent of banks and other financiers are shifting their money out of coal as investment risks in it grow. We have only 12 years left to save the planet from devastating climate change, the Intergovernmental Panel on Climate Change warned last October. With important governments missing in action, financial institutions have now emerged as unlikely allies of climate activists. In recent months banks and other financiers have pulled out of the coal and other fossil fuel sectors. The World Bank was the first major financial institution to end lending for most coal projects in 2013. Six year later the trickle is turning into a torrent. According to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), more than 100 banks, pension funds, insurance companies, asset managers, development banks and export credit agencies with assets of at least $10 billion each have by now adopted some kind of coal restrictions.

http://news.trust.org//item/20190301103215-pgnh7/


New OECD Bribery and Export Credits Recommendation

(OECD, Paris, 27 March 2019) With the adoption of the revised Recommendation of the Council on Bribery and Officially Supported Export Credits (OECD/LEGAL/0447) in 2019, ECG Members and other non-Members that have adhered to the Recommendation (hereafter, the “Adherents”) are demonstrating their continued commitment to take appropriate measures to deter bribery in the export transactions that they support. Implementation of the revised Recommendation will be monitored via surveys of the measures that Export Credit Agencies have put in place to combat bribery and will be supported by regular workshops to consider best practices, relevant international developments and evolving business practices. [The OECD Recommendations are not legally binding and rely only on moral force. OECD reporting on surveys and internal "monitoring" have fallen short of expectiations by international NGO corruption monitors.]

http://www.oecd.org/trade/topics/export-credits/bribery-and-export-credits/


NAM Urges Senate to Get Ex-Im Bank Back Up and Running

(National Association of Manufacturers, Washington, 8 March 2019) Securing a level playing field internationally [i.e. matching corporate subsidies] is vital to manufacturers in the United States, which already export about half their production, supporting millions of workers across the country. While there’s been a lot of focus on foreign barriers that impede U.S. exports, one of the most concerning problems is of our own making: the Senate’s failure to confirm nominees to the Board of Directors of the U.S. Export-Import Bank. Without these nominees, the Ex-Im Bank cannot even consider major deals over $10 million or even act on the reforms that Congress set out it when it last reauthorized the bank in 2015. With the Ex-Im Bank severely weakened, manufacturers in the United States are losing sales to foreign competitors who are backed up by nearly 100 other export credit agencies around the world. For example, China’s two Export Credit Agencies routinely help their companies out-muscle their U.S. rivals. Last year, China provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. According to the National Association of Manufacturer’s estimates, manufacturers lost at least $119 billion in manufacturing output, translating into 80,000 fewer manufacturing jobs in 2016 and 2017 as a result of an inactive Bank.

https://www.shopfloor.org/2019/03/senate-ex-im-bank/


Levelling the playing field: UK exporters want more

(Global Trade Review, London, 13 March 2019) Excluded from many projects in countries under IMF bailout programmes, UK exporters are calling for a trade and aid link in African infrastructure and a rewrite of OECD guidelines that bind export credit agencies. The support is good but UK exporters want more. Some of the most lucrative public sector projects in Africa are out of their reach because of IMF rules on borrowing for Africa’s 30 heavily indebted, poor countries. If a country has reached its borrowing limit, it can’t borrow anymore unless 35% of that debt is concessional or has a grant element. Infrastructure groups say they could win much more business if the UK’s department for international development (DfID) was prepared to link some of its annual £13bn foreign aid budget with export credit. For UK exporters it is never enough. UKEF financing, albeit with long tenors and flexible terms, isn’t concessional. It’s never been part of the ECA’s remit to provide concessional export credit finance and the grant element of a loan can only come from the UK’s development agency. Unlike other OECD countries such as Japan, South Korea, Italy and France where their ECAs combine loans with a grant or aid element, DfID doesn’t want its budget or support linked to UK companies bidding for infrastructure projects.

https://www.gtreview.com/supplements/gtr-uk-2019/levelling-playing-field-uk-expo...


WTO says U.S. failed to halt state tax subsidy for Boeing

Reuters, Geneva/Paris, 28 March 2019) The World Trade Organization said on Thursday the United States had ignored its request to halt a subsidized tax break for Boeing Co in its main plane-making state of Washington as a 15-year-old transatlantic trade row edges towards tit-for-tat sanctions. The European Union said the WTO appeal ruling had vindicated its claims that Boeing continued to receive illegal subsidies, but the United States said only one measure, a Washington state tax break worth around $100 million annually, had been found still to violate the rules. A 2018 ruling by the WTO already found that the EU was also failing to stop its own illegal subsidies for Europe's Airbus. Washington has since claimed an unspecified amount in damages and a WTO mediator is still examining this claim. The "Bank of Boeing" is what critics sneeringly call the Export-Import Bank of the United States, a federal agency that provides low-cost loan guarantees that help companies, including Boeing, expand and compete internationally.

https://www.reuters.com/article/us-eu-usa-aircraft-wto/wto-says-u-s-failed-to-ha...


Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers

(Globe & Mail, Toronto, 26 March 2019) Senior federal officials sought to warn Canada’s export agency that it had suffered “significant” risk to its reputation because of its US$41-million loan to the controversial Gupta brothers who were at the heart of a South African corruption scandal, internal documents show. The documents, obtained by The Globe and Mail under federal access laws, show that Global Affairs Canada wanted an explanation of the risky loan from the federal agency, Export Development Canada, during a planned meeting in March, 2018, where the Gupta deal was scheduled to be a top agenda item. Canada's export agency was aware of allegations against South Africa's controversial Gupta family for the past five years, yet it went ahead with a US$41-million loan to the Guptas anyway, a lawyer for the family says. After a year of legal battles, Canada’s export agency has won the right to sell a notorious Canadian-funded airplane that played a highly visible role in the corruption scandal that toppled South Africa’s former president, Jacob Zuma.

https://www.theglobeandmail.com/world/article-senior-federal-officials-tried-to-...


Kenya 'inflated' SACE loans insurance cost by Sh10 billion

(Standard Media, Nairobi, 7 March 2019) The Government of Kenya paid Sh10 billion to insure the loans taken for construction of the controversial Arror and Kimwarer dams, but industry experts argue the cost should not have exceeded Sh1 billion. Italian insurer SACE was paid Sh11.1 billion [94.2 million Euros] as premium for the loan, but a reputable firm that offers products on sovereign loans argues the much it would have charged was Sh750 million. In essence, going by arguments by local industry experts, Kenya paid 15 times over the fair rate to the Italian government-owned credit insurer for insuring the loans procured from a consortium of banks led by Intesa San Paolo. It would be a subject of interest for investigators to determine why SACE charged 17.5 per cent of the loan amount as premium, against industry rates averaging 1.5 per cent.

https://www.standardmedia.co.ke/article/2001315555/state-inflated-loan-insurance...


Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects

(Sydney Morning Herald, Sydney, 5 March 2019) A major oil and gas company wants Australian taxpayer money spent on overseas energy projects, stoking fears that a Morrison government plan to boost development in the Pacific is a smokescreen for fossil fuel investment. A government amendment to the operation of its export credit agency, the Export Finance and Insurance Corporation, quietly passed Parliament's lower house with support from Labor last month. It is now being considered by a Senate committee. A submission to the Senate inquiry by Papua New Guinean oil and gas company Oil Search suggests fossil fuel projects may be lining up for funding under the proposed laws. The government bill would add $1 billion to the finance corporation's existing $200 million calling capital and broaden the national interest test for investment decisions. The Coalition and Labor combined to defeat an amendment to the bill proposed by Greens MP Adam Bandt that would have barred the corporation from facilitating thermal coal exports. Mr Bandt, the party’s climate change and energy spokesman, said the bill would “expand Australia’s fossil fuel exports at taxpayer expense”.

https://www.smh.com.au/politics/federal/foreign-energy-giant-wants-australia-to-...


EU exemption on export credits: is everyone a winner?

(Global Trade Review, London, 13 March 2019) Europe to exempt export credits from banks’ leverage ratios have been received positively, but is this good news for all export finance banks? Last month, EU ambassadors endorsed the capital requirements regulation adjustment package, including an exemption for export credits from the leverage ratio. On the face of it, this should resolve a long-standing headache for export finance banks, who would suffer under Basel III due to a lack of an exemption from the leverage ratio calculation from the export credit agency (ECA)-backed portion of any transaction, despite the near-zero credit risk of an ECA. After years of advocacy by the European Banking Federation (EBF) export credit working group, the ICC global export finance committee and the ICC regulatory advocacy committee, along with support from the Berne Union, various European ECAs and national banking associations, the export finance community can now claim a victory. In practice, this will mean the traditionally low-risk business of export finance should become more attractive for banks, bringing much-needed liquidity to the market. Former EBF export credit working group chair, Henri d’Ambrières, tells GTR that a reluctance on the part of EU regulators to go further with this regulation could mean some exporters may be put at a disadvantage. This could lead to Spanish exporters losing competitiveness against their German counterparts in markets such as Latin America. The two countries jointly account for 40% of all EU exports to the region, and compete in areas such as capital goods for Latin America’s booming renewable power sector – usually purchased in dollars.

https://www.gtreview.com/news/europe/eu-exemption-on-export-credits-is-everyone-...


East Africa: China to Host Second Belt and Road Forum

(The East African, Nairobi, 6 March 2019) China will host its second Belt and Road Initiative (BRI) forum later this year, in its push to link the country by sea and land through an infrastructure network with Asia, the Middle East, Africa and Europe. The initiative launched by President Xi in 2013 seeks to strengthen Chinese global dominance through more than $1 trillion investment in infrastructure. In Africa, China invests majorly on transport and energy with Nigeria, Angola, Ethiopia, Kenya and Zambia among the largest partners in the BRI. In 2018, President Xi, during the Beijing Summit of the Forum on China Africa Cooperation (FOCAC), pledged $60 billion in financial support to Africa as part of the country's engagement with the continent in the next three years.

https://www.theeastafrican.co.ke/business/China-to-host-second-Belt-and-Road-for...


EX-IM Hosts 2019 Annual Conference in Washington, D.C.

Business Wire, Washington, 28 March 2019) Leaders of government, business, and academia will address the 2019 Annual Conference of the Export-Import Bank of the United States (EXIM) that held on Thursday and Friday, March 28-29, 2019, at the Omni Shoreham Hotel in Washington, D.C. The conference agenda as of March 27th is outlined here.

https://www.exim.gov/events/annual-conferences/2019/agenda


What's New February 2019

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!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans
  • Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries
  • Are ECAs liable for funding of slavery tainted enterprises?
  • With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark
  • German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk
  • EDC insured Suncor’s Middle East misadventures
  • Australia’s ECA eyes overseas investment with potential new mandate
  • Jaguar Land Rover seeking ECA funding after huge write-down
  • Japanese and French ECAs to finance Turkey's second nuclear plant
  • Kuwait Conference pledges billions for Iraqi reconstruction
  • Bahrain talking to U.S. oil companies about tight oil deal
  • Finnvera Group’s Board Report and Financial Statements for 2018

SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans

(Above Ground, Ottawa, 22 February 2019) Following reports that engineering giant SNC-Lavalin lobbied federal officials intensively in the lead-up to its criminal prosecution on corruption charges, public attention has been brought to the hundreds of millions in government loans the company has received in recent years. The Globe and Mail reported last week that Export Development Canada (EDC) has provided at least $800-million and as much as $1.7-billion in loans to SNC-Lavalin since 2011, when news broke that the firm was under investigation by the RCMP. Some of those loans were approved after the World Bank announced in 2013 that SNC-Lavalin was barred from bidding on its projects until 2023 due to corruption, and after criminal charges were laid in Canada. As we noted in our recent submission to the government urging stricter oversight of Export Development Canada, SNC-Lavalin is just one of several EDC clients to face corruption investigations, charges or sanctions in recent years. (Others include Bombardier, Kinross Gold and Brookfield.)

https://aboveground.ngo/news-media/media-coverage/


Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries

(Guardian, London, 24 February 2019) Former UN Secretary General Ban Ki-moon has urged Britain to stop funding fossil fuel projects overseas, in what he said would mark a test of Theresa May’s commitment to act on climate change. The former UN secretary general said he was deeply concerned that the UK’s export credit agency had provided billions of pounds in recent years to support businesses involved in oil and gas schemes around the world. “These figures and policies are hard to reconcile with the UK’s commitments under the Paris agreement,” said Ban, referring to the international climate deal he forged in 2015 as UN Chief. “The time has come for the UK to change course, in the interests of the whole world,” he wrote in a comment for the Guardian. The UK Environmental Audit Committee is currently investigating the scale and impact of UK Export Finance’s financing of fossil fuels in developing countries.

https://www.theguardian.com/environment/2019/feb/24/ban-ki-moon-britain-stop-inv...


Are ECAs liable for funding of slavery tainted enterprises?

(20 Essex Street, London, 2 February 2019) A recent UN report with recommendations to advance efforts to eradicate modern slavery has mentioned, amongst other examples, the direct or indirect involvement of a state in the commission of offences via ECA funding of slavery-tainted enterprises. For example, the Guardian has reported that the US Export Import Bank provided $315m in taxpayer-supported financing over the past decade to a company that has supplied equipment to African mines accused of slave labor, human rights violations and environmental destruction. The Eritrean mine is being investigated by a Canadian court.

https://www.20essexst.com/news/dr-philippa-webb-releases-report-modern-slavery-u...


With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark

(Above Ground, Ottawa, 12 February 2019) In January Export Development Canada (EDC) released a new climate change policy. The policy commits EDC to further limit its coal-related investments and increase its support for clean technologies. It does not, however, put in place a clear path to reducing – let alone phasing out – the billions of dollars of support that EDC provides to the oil and gas sector each year. EDC’s support for fossil fuel companies is fundamentally at odds with Canada’s international obligations on climate change. To address this contradiction, last year more than a dozen civil society groups including Above Ground recommended that EDC phase out its support for coal, oil and gas projects; companies significantly reliant on coal; and companies whose primary business is in coal, oil or gas. We also recommended that EDC commit to achieving a sharp reduction in GHG emissions across its business portfolio. Instead, EDC has renewed its commitment to support carbon-intense sectors, including the oil and gas industry.

https://aboveground.ngo/edc-new-climate-change-policy-falls-short/


German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk

(Reuters, Frankfurt, 8 February 2019) German banks are seeking to blunt any fresh U.S. sanctions against Russia so they can continue existing business with Russian clients, according to an internal briefing paper prepared by a financial industry lobby group. The risk of new restrictions on doing business with Russia has risen since the Democratic Party won control of the U.S. House of Representatives. New anti-Moscow measures could jeopardise funding for a 9.5 billion euro gas pipeline which seeks to channel gas from Russia directly to Germany under the Baltic Sea. "Nord Stream is the elephant in the room," said one person with direct knowledge of the matter. Russian news agency TASS quoted Nord Stream 2’s finance chief Paul Corcoran saying it was in discussions with export credit agencies and wanted to raise around 6 billion euros. Last month, the U.S. Ambassador to Germany sent a letter to companies involved in Nord Stream warning that they could face sanctions if they stick with it.

https://www.euronews.com/2019/02/08/german-banks-manoeuvre-in-washington-to-temp...


EDC insured Suncor’s Middle East misadventures

(Globe & Mail, Toronto, 7 February 2019) The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011. On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims. Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. EDC declined to answer most of The Globe’s questions about the Suncor policy.

https://www.theglobeandmail.com/canada/article-federal-government-insured-suncor...


Australia’s ECA eyes overseas investment with potential new mandate

(Global Trade Review, London, 20 February 2019) Australia’s export credit agency, Export Finance and Insurance Corporation (Efic), could receive an A$1bn cash injection of callable capital, a mandate to finance larger overseas projects and a new name as part of a bill expected to pass in the house of representatives this week. The bill’s initial text highlights opportunities to invest in overseas infrastructure, such as telecommunications, energy, transport and water, throughout the Pacific region and further afield. The bill also includes a new name for the agency — Export Finance Australia. More specifically, the bill notes that the additional capital would allow the agency to continue to finance infrastructure projects in Papua New Guinea, which it described as “one of our most important neighbours”. Efic is currently involved in the PNG LNG project, a US$19bn investment scheme for the commercial development of the gas resources of Papua New Guinea. However, on its current budget, Efic is re-approaching its country lending limit for the southwestern Pacific island nation and it is only able to finance one additional project.

https://www.gtreview.com/news/asia/australias-eca-eyes-overseas-investment-with-...


Jaguar Land Rover seeking ECA funding after huge write-down

(Car Advice, Sydney, 11 February 2019) Jaguar Land Rover is seeking US$1 billion in funding after a disastrous fourth quarter of 2018, huge-write downs on the value of its investments, and continued sales struggles in China. According to a report from Automotive News Europe, the Indian-owned carmaker needs to raise US$1 billion ($1.4 billion) within the next 14 months to replace "maturing bonds" and fund the brand's expensive electric vehicle development program. Rather than borrowing from the bond market, the company is looking at bank financing, leasing its assets or tapping into export credit. Tata Motors announcing sales in China were down 35% in the final 3 quarters of 2018.

https://www.caradvice.com.au/725363/jaguar-land-rover-seeking-funding-after-huge...


Japanese and French ECAs to finance Turkey's second nuclear plant

(Daily Sabah, Istanbul, 25 February 2019) Turkey's second nuclear power plant to be built in Sinop under a Japanese-French partnership, will make a breakthrough by obtaining a ground license this year. The plant, which will have an installed capacity of 4,480 megawatts (MW) and consist of four reactors with a 1,120-MW capacity each, will cost $20 billion. The Japanese and Turkish governments agreed in 2013 on the project to be built with a Japanese-French consortium in the Black Sea province of Sinop. The bulk of the project would be financed by Nippon Export and Investment Insurance (NEXI), Japan's export credit agency, and French credit insurer Coface.

https://www.dailysabah.com/energy/2019/02/25/ground-license-to-be-granted-to-sin...


Kuwait Conference pledges billions for Iraqi reconstruction

(Daily Sabah, Istanbul, 4 February 2019) Turkey, the top contributor for Iraq's reconstruction with a $5 billion loan, has launched a coordination process to allocate the funds pledged for rebuilding Iraq. During the Kuwait International Conference for the Reconstruction of Iraq, the host country pledged $1 billion in loans and $1 billion in direct investments. Saudi Arabia said it would allocate $1 billion for investment projects in Iraq and $500 million to support Iraqi exports. Qatar said it would allocate $1 billion in loans and investments, while the United Arab Emirates pledged $500 million in investment. The European Union and Australia each promised $450 million and $100 million, respectively. While the U.S. - who invaded Iraq in 2003 - said it could provide more than $3 billion to help American firms invest in the war-torn country. Britain had said it would grant Iraq export credit of up to $1 billion per year for a decade. Iraqi government published a list of 157 projects, for which it sought private investments during the conference last year.

https://www.dailysabah.com/business/2019/02/04/turkey-initiates-coordination-act...


Bahrain talking to U.S. oil companies about tight oil deal

(Reuters, Manama, 26 February 2019) Bahrain is talking to U.S. oil companies with shale oil expertise about developing a huge oil and gas field discovered last year, and hopes to have an interested company by the end of the year. Oil Minister Al Khalifa also said state-run Bahrain Petroleum Company (Bapco) is “a few weeks away” from financial close on funding for the capacity expansion of its existing Sitra oil refinery. Five export credit agencies from Korea, Spain, Italy and Britain, alongside international and Bahraini banks will provide more than $4 billion in financing.

https://in.reuters.com/article/bahrain-oil/bahrain-talking-to-u-s-oil-companies-...


Finnvera Group’s Board Report and Financial Statements for 2018

(Global News Wire, Helsinki, 26 February 2019) Demand for export credits has increased in recent years. At the same time, our need for funding has increased and, in 2018, a total of EUR 2.4 billion was acquired from the capital market. To balance funding and asset management, Finnvera prepaid loans associated with the temporary export credit system of 2009–2012 to the State, amounting to EUR 1.5 billion. Finnvera’s total exposure at the end of 2018 was EUR 25.6 billion, of which drawn guarantees and credits accounted for EUR 12.2 billion. Approximately half of the exposure relates to binding financing offers or agreements that are related to future deliveries by export companies, and thus they do not create credit risks for Finnvera yet. These arrangements typically consist of buyer financing for cruise ships, the delivery times of which are long. In the long term, the drawn exposure will remain clearly below our total exposure. For potential future losses, we have so far accumulated EUR 1.8 billion reserves as the result of our operations.

https://globenewswire.com/news-release/2019/02/26/1742169/0/en/Finnvera-Group-s-...


What's New January 2019

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!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Parliamentary inquiry into UKEF Procedures and Submissions Available online    
  • Japan edges in on Belt and Road with $643m for Angolan port
  • Trans-Adriatic Pipeline completes successful €3.9 billion project financing
  • Afreximbank Lends $170 Million to Orascom for Pan-African Expansion
  • PNG leads wave of jumbo ECA project loans
  • Saudi Aramco Hiring Funding Advisers for a $5 Billion Project
  • Mozambique looks for LNG ECA financing despite market scepticism
  • Remember the Export-Import Bank
  • Extension of interest subsidy scheme to boost Indian export credits
  • NEXI insures UKEF credit for Boeing export to Colombia's Avianca
  • US Export-Import Bank reopens programs for Ukraine
  • Indonesia looks to ECA funding for aerial refuelling tanker-transports
  • Nord Stream 2 negotiating ECA loans worth 6 bln euros

Parliamentary inquiry into UKEF Procedures and Submissions Available online

(UK Parliament, London, January 2019) The Terms of Reference, membership, witness submissions, witness guidelines and the calendar of the UK Parliament's Environmental Audit Committee inquiry into UK Export Finance are now available online.

https://www.parliament.uk/business/committees/committees-a-z/commons-select/envi...


Japan edges in on Belt and Road with $643m for Angolan port

(Nikkei Asia Review, Tokyo, 9 January 2019) Trading company Toyota Tsusho and the Japan Bank for International Cooperation are joining forces on a port project in Angola that will be the largest of its kind for Japanese businesses. The plan is to raise 70 billion yen ($643 million) from both public and private lenders in Japan to help the African country fund the endeavor. The move comes as China steps up infrastructure development in Africa amid concerns that it is saddling developing countries with excessive debt.  Toyota plans to use Japanese equipment and materials to construct the port facility through a contract with the Angolan government, which will receive loans from export credit agency JBIC and other entities. To encourage private lenders to participate, Nippon Export and Investment Insurance is to insure the amounts they offer. The Japanese move is being seen as an attempt to challenge China’s dominant position in Angola.

https://asia.nikkei.com/Economy/Japan-edges-in-on-Belt-and-Road-with-643m-for-An...


Trans-Adriatic Pipeline completes successful €3.9 billion project financing

(AzerNews, Baku, 11 January 2019) A consortium for the Trans-Adriatic Pipeline (TAP) construction has successfully completed the financial closure of the project in 2018, receiving 3.9 billion euros. “The European Investment Bank (EIB), recognizing the important contribution of TAP to improving the security of energy supply in Europe, allocated 700 million euros for the implementation of this project. Reportedly, 17 commercial banks provide financing along with the EBRD and the European Investment Bank (EIB). Part of the financing is covered by export credit agencies - Bpifrance (450M Euros), Euler Hermes (280M Euros) and Sace (700M Euros), merchant banks (635M Euros) and EBRD (1 billion Euros). Costs have previously been funded by TAP’s shareholders: BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%). There have been incidents of protests by both local citizens and government officials against the Trans Adriatic Pipeline.

https://www.azernews.az/oil_and_gas/143883.html


Afreximbank Lends $170 Million to Orascom for Pan-African Expansion

(Afreximbank, Cairo, 17 January 2019) The African Export-Import Bank (Afreximbank) has signed a facility agreement lending $170 million to Egypt-based conglomerate Orascom Investment Holding (OIH) to assist the company expand its pan-African activities in pursuit of its short and medium-term expansion strategy. the transaction was a significant opportunity for OIH’s targeted investments in companies across Africa to support their transformation, increase their production capacity and produce higher quality exports through better value addition, especially in the agro-processing sector. Afreximbank has approved more than $67 billion in credit facilities for African businesses since 1994. Orascom Investment will explore business and investment opportunities referred to it by Afreximbank in such countries as Rwanda, Togo, Eretria, Nigeria and Sao Tome.

https://afreximbank.com/afreximbank-lends-170-million-to-orascom-for-pan-african...


PNG leads wave of jumbo ECA project loans

(Reuters, Sydney, 18 January 2019) The expansion of Papua New Guinea’s giant gas project is turning up the heat in the Asia Pacific project finance arena, with a slew of jumbo financings set to emerge from Oceania in the next 18 months. Stakeholders in the Papua New Guinea Liquefied Natural Gas project are in discussions with export credit agencies and commercial banks for up to US$9.8bn of debt to fund the next phase of the project, in what will be the region’s biggest project financing since 2010. Another major deal is also in the works as Australia Pacific LNG prepares to refinance US$3bn of project debt. JP Morgan has been named financial adviser. The long-awaited expansion of the PNG LNG project is estimated to cost around US$12bn-$14bn and involves construction of three new gas processing units, called trains, at the Papua New Guinea LNG plant. It is the largest resources-related borrowing in Oceania since March 2010, when the PNG LNG project raised US$14bn in initial funding from ECAs, commercial banks and lead sponsor and operator ExxonMobil. The US$1.95bn commercial portion attracted 17 banks. PNG LNG is already operational.

https://af.reuters.com/article/commoditiesNews/idAFL3N1ZI2UD


Saudi Aramco Hiring Funding Advisers for a $5 Billion Project

(Bloomberg, London, 17 January 2019) Satorp, the joint venture between Saudi Aramco and Total SA, hired Sumitomo Mitsui Banking Corp. and Riyad Bank to help raise funds to develop a petrochemical facility in the kingdom. Financing for the $5 billion Amiral project is expected to be arranged from banks and export credit agencies. The facility will be in Jubail in the eastern province where the JV already operates a refinery and will convert fossil fuels into building blocks for plastics. Saudi Arabia is seeking to transform its oil-dependent economy by developing new industries, and is pushing into petrochemicals as a way to earn more from its energy deposits. The Amiral complex will be able to produce 2.7 million tons of chemicals annually and will be completed by late 2023 or early 2024. Aramco, as Saudi Arabian Oil Co. is known, owns 62.5 percent of Satorp, while Total holds the rest.

https://www.bloomberg.com/news/articles/2019-01-17/saudi-aramco-refinery-jv-said...


Mozambique looks for LNG ECA financing despite market scepticism

(Macauhub, Macau, 11 January 2019) The government of Mozambique has been involved in the last few weeks in intense negotiations with seven countries to secure funding for one of its largest natural gas projects and overcome scepticism about whether it will honour its debt commitments. The Rovuma Area 1, in the Rovuma Basin, involves an estimated investment of US$25 billion. The talks involve seven Export Credit Agencies (ECAs), including Japan (JBIC), China (China ExIm), South Korea, USA (US-Exim), Germany [sic] (Atradius) and Italy (Servizi Assicurativi del Commercio Estero – SACE). The ECAs are evaluating the possibility of funding the Rovuma Area 1 project, which is operated by Anadarko which has been the subject of multiple environmental cases. In discussing the risks of the LNG project, the government has ignored the threat posed by armed insurgent attacks in Cabo Delgado. Most international analysts believe that they will not threaten the projects; but the state’s inability to control the attacks affects the country’s image as a safe investment destination and a place for expatriates.

https://macauhub.com.mo/feature/mozambique-looks-for-lng-financing-despite-marke...


Remember the Export-Import Bank

(Eakinomics, Washington, 17 January 2019) The Export-Import Bank is due to be re-authorized in September 2019. The re-authorization of Ex-Im in 2015 became a pitched battle over whether it was an appropriate role for the government. While the arguments against market intervention make sense, until other countries scale back their use of ECAs, the Ex-Im Bank is a necessary evil to level the playing field. The decline in Ex-Im activity is clear in the graph (below)... there are about $30 billion in ECA activity in the G-7 and $50 billion among the BRIC countries. The bank is unable to approve any transactions greater than $10 million in value because it has not had a quorum of 3 voting board members since 2015. Given the lack of a quorum, as of Summer 2018, there are $43 billion in transactions awaiting approval. The administration resubmitted the nomination of Kimberly Reed to be president of the Ex-Im Bank and for Spencer Bachus III, Judith DelZoppo Pryor and Claudia Slacik to serve on its board of directors. All had been previously nominated by the administration, and the Senate Banking Committee had favorably reported them, but the full Senate did not take up their nominations.

https://www.americanactionforum.org/daily-dish/remember-the-export-import-bank


Extension of interest subsidy scheme to boost Indian export credits

(News Today, Chennai, 4 January 2019) The Indian government has to provide three per cent [export credit] interest subsidy to merchant exporters, entailing an expenditure of Rs600 crore (US$84 million), to enhance liquidity with a view to boosting outbound shipments. Sectors that will be benefited from the decision include agriculture, textiles, leather, handicraft and machinery. The interest equalisation or subsidy scheme for pre- and post-shipment rupee export credit started on 1 April, 2015 and will end in March 2020. Other news sources indicated that interest subsidies had dropped from Rs434 crore in 2017 to Rs197 crore in 2018 (US$60m to US$28M). The Union Cabinet in mid-Janurary committed to infusing US$840 million into the Exim Bank over 2 years and doubling its authorized capital from US$1.4 billion to US$2.8 billion (Rs10,000 crore to Rs20,000 crore)

https://newstodaynet.com/index.php/2019/01/04/extension-of-interest-subsidy-sche...


NEXI insures UKEF credit for Boeing export to Colombia's Avianca

(NEXI, Tokyo, 18 January 2019) Nippon Export and Investment Insurance (NEXI) has decided to provide reinsurance on export credit provided by UK Export Finance (UKEF), the export credit agency of the United Kingdom of Great Britain and Northern Ireland (UK), for export of one Rolls Royce-powered Boeing 787-8 aircraft to Avianca S.A.. The provision of this reinsurance is based on the reinsurance agreement concluded between NEXI and UKEF on August 30, 2017.

https://www.nexi.go.jp/en/topics/newsrelease/2018121902.html


US Export-Import Bank reopens programs for Ukraine

(Kyiv Post, Kyiv, 8 January 2019) The Export-Import Bank of the United States has reopened its programs for Ukraine after a five year pause, the Washington-based U.S.-Ukraine Business Council stated. Through ten months of 2018 bilateral trade between Ukraine and the U.S grew slightly to $3.1 billion, in comparison to 2017’s $2.84 billion yearly total, according to official statistics. Leading U.S. exports to Ukraine in 2018 were coal ($655 million), motor vehicles ($260 million) and civilian aircraft ($217 million). In the same 10-month period, Ukraine’s top exports to the United States were iron products ($707 million) and sunflower products ($27.3 million).

https://www.kyivpost.com/ukraine-politics/us-export-import-bank-reopens-programs...


Indonesia looks to ECA funding for aerial refuelling tanker-transports

(Jane's Defence Weekly, Singapore, 25 January 2019) The Indonesian Air Force (TNI-AU) has completed a study on the country's aerial refuelling requirements and has proposed the acquisition of two new airframes for the service, outlining a budget requirement of about USD500 million, proposing that the funds be drawn down from foreign defence export credit loans. Jane's first reported in January 2018 that the TNI-AU had begun a preliminary study to compare the A330 multirole tanker-transport (MRTT) from Airbus and the KC-46A Pegasus from Boeing. Russia's four-engine Ilyushin Il-78 was also later included in the study.

https://www.janes.com/article/85954/indonesia-completes-technical-evaluation-for...


Nord Stream 2 negotiating ECA loans worth 6 bln euros

(TASS, Vienna, 29 January 2019) Nord Stream 2 AG, the operator of the Nord Stream 2 gas pipeline construction project, is conducting negotiations to attract project financing worth 6 bln euros. Chief Financial Officer Paul Corcoran told reporters "We are still in discussions with export credit agencies." The Nord Stream 2 pipeline is expected to come into service at the end of 2019. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. It will go through the exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5 bln cubic meters. The total cost of the project has been estimated at 9.5 bln euro. Nord Stream 2 AG, with Gazprom being the only shareholder, is the operator of the Nord Stream 2 pipeline construction project. Gazprom's European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and Royal Dutch Shell.

http://tass.com/economy/1042221


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