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 for June 2024

"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

  • Deal to limit ECA oil and gas funding abroad hinges on US
  • U.S. EXIM Bank in an Age of Great Power Competition
  • Export credit and West vs Chinese strategic minerals
  • EU adopts of sanctions against Russia including billions of ECA support for Ukraine
  • World Bank: How can we unlock infrastructure finance at scale for developing countries?
  • UKEF's implementation of the Equator Principles (1 April 2023 to 31 December 2023)
  • Nigerian Civil societies urge China to rescind proposed East African crude pipeline project
  • QatarEnergy, Chevron Phillips Secure $4.4 Bln Financing for Petrochemicals Project
  • Brazil’s Petrobras tightens ties with Chinese banks and Sinosure
  • JBIC fires up US$1bn loan for Australian LNG project
  • SACE EUR 100mln Push Facility provided to Eastern & Southern African Trade & Development Bank
  • India mulls overhaul of trade finance market
  • SMEs should make more use of UKEF's little-known GEF

Deal to limit ECA oil and gas funding abroad hinges on US

(E&E News, Arlington, 17 June 2024) The fate of an international plan to end a major funding source for fossil fuel projects could be decided this week by U.S. officials. Some of the world’s richest countries will meet behind closed doors starting Monday to discuss a European Union-led proposal to end loans and guarantees from their export credit agencies to oil and gas projects. It’s part of an evolving arrangement under the Paris-headquartered Organisation for Economic Co-operation and Development — a group of 38 countries that collaborate on issues of trade and finance — and follows a 2021 deal to end such investments in coal. If the countries under the arrangement reach a new agreement, it could help squelch the flow of billions of dollars into polluting energies. If they don’t, the proposal could get punted to the next round of talks in November, when former President Donald Trump, the presumptive Republican nominee for president, could be re-elected — which would threaten any agreement to restrict fossil fuel investments. “All eyes are on the U.S.,” said Kate DeAngelis, deputy director of international finance at the climate advocacy group Friends of the Earth. “Without the U.S coming to the table, we’re not going to see Japan and Korea get in line. And so I think if nothing happens, then that’s telling in and of itself that it’s a failure of U.S. leadership.”


U.S. EXIM Bank in an Age of Great Power Competition

(Center for Strategic and International Studies, Washington, 18 June 2024) The U.S. Export-Import Bank (EXIM), the United States’ official export credit agency (ECA), is an independent, executive branch institution that supports U.S. businesses by financing the exports of goods and services. EXIM creates jobs at home and has been an important national security instrument. From 2015 to 2019 the bank was dormant due to the absence of a board quorum and the lack of a reauthorization of its charter from the U.S. Congress. During the last 15 years, EXIM, once the global ECA gold standard, has been underutilized as it has struggled politically. Over this same period the global export credit landscape has evolved significantly, with governments around the globe using their ECAs more as instruments of industrial policy and to strategically boost their manufacturing competitiveness and strategic influence in critical emerging and frontier markets. Most notable in its ascendance as a global export credit player, the People’s Republic of China (PRC) has become a much bigger player in the space. At the same time, U.S. allies (and sometimes economic competitors) have also elevated their ECAs’ competitiveness and influence by offering more flexible terms and becoming more client-oriented compared to EXIM. As a result, EXIM not only has lost its global leadership position, but now is at a significant competitive disadvantage compared to its competitors, including the PRC, in the ECA space. The U.S. EXIM bank will need a new slate of board members in January 2025, as three of the four current board members’ terms end January 20, 2025, and EXIM faces a reauthorization in 2026, offering an opportunity to rethink what tools and capabilities EXIM should have.


Export credit and West vs Chinese strategic minerals

(Mining News, Perth, 19 June 2024) Australian Strategic Materials (ASM) is aiming to become the first global company to go from rare earths mining all the way through to metals. Rare earths are considered critical minerals and demand is set to surge, making ASX-listed ASM well-placed to capitalise as it holds holds one of the country's most advanced rare earth element deposits, the Dubbo Project, in New South Wales. ASM made significant headway in this area when it recently received non-binding letters of interest from the Export-Import Bank of the United States (US EXIM) for up to US$600 million, and up to A$400 million from Export Development Canada (EDC) in debt financing for the Dubbo Project, in addition to conditional finance support of A$200 million previously received from Export Finance Australia. Interest from US and Canadian agencies stems from enhanced policy alignment between Australia and North American jurisdictions on the importance of establishing an alternative critical minerals supply chain. "They needed a non-China source of material, so for us, being an early leader in it means we're now in this process where we're validating our product with all of them to qualify to be a supplier," ASM Director Rowena SmithSmith said.


EU adopts sanctions against Russia including billions of ECA support for Ukraine

(EU-Neighbours-East, Brussels, 24 June 2024) The Council of the European Union today adopted a 14th package of economic and individual restrictive measures against Russia, “dealing a further blow to Putin’s regime and those who perpetuate his illegal, unprovoked and unjustified war of aggression against Ukraine”. These measures are designed to target high-value sectors of the Russian economy, like energy, finance and trade, and make it ever more difficult to circumvent EU sanctions. Since the Russian aggression started, the EU and its financial institutions have mobilised €50 billion to support Ukraine’s overall economic, social and financial resilience in the form of macro-financial assistance, budget support, emergency assistance, crisis response and humanitarian aid. the Executive Vice President of the European Commission Valdis Dombrovskis announced the Ukraine Facility budget which will be 33 billion euros in loans and 17 billion euros in grants. Of the total amount, 38.27 billion euros will support the budget, 6.97 billion euros will go to the investment fund and 4.76 billion euros will be for technical and administrative support. [ECA Watch note: This month's news review for What's New turned up many articles announcing a €300 million export credit guarantee facility under the EU flagship investment programme InvestEU.]


World Bank: How can we unlock infrastructure finance at scale for developing countries?

(World Bank Blog, Washington, 5 June 2024) In a world that has become more and more divisive, economic growth, supply chains, borrowing costs, and inflation have been impacted, leaving governments in emerging economies scrambling for funding and solutions to provide the infrastructure services needed for the millions of households left behind. Against this backdrop, private capital mobilization can play a crucial role in addressing this gap. We must optimize scarce public finance and invest in ways that generate sustainable private sector participation. We at the World Bank wanted to gather market intelligence from financiers to understand how the infrastructure financing landscape is responding to global events, specifically on the availability and affordability of finance for emerging markets and developing economies. In collaboration with PricewaterhouseCoopers, the World Bank conducted a survey to gather perspectives on these dynamics from international and domestic commercial lenders, export credit agencies, insurers and reinsurers, international and domestic equity sponsors, and development finance institutions.


UKEF's implementation of the Equator Principles (1 April 2023 to 31 December 2023)

(UKEF, London, 25 June 2024) UK Export Finance (UKEF) adopted the Equator Principles (EPs) on 31 March 2016, joining what now comprises 128 other banks and Export Credit Agencies (EP Financial Institutions or EPFIs) in applying this global guidance for environmental, social, and human rights (ESHR) risk management when financing projects. During the reporting period 1 April 2023 to 31 December 2023, UKEF contributed to the planning and management of the mid-year workshop and celebration event that was held in London to mark 20 years of the Equator Principles. UKEF continues to follow the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD Common Approaches), currently dated 25 March 2024, which applies alongside the Equator Principles as outlined in the Policy and Practice on Environmental, Social and Human Rights due diligence and monitoring (ESHR Policy). The report lists projects supported within the scope of the Equator Principles and provides links to documents on social impacts, social risks, project-related human rights and sustainability.


Nigerian Civil societies urge China to rescind proposed East African crude pipeline project

(Nigerian Tribune online, Ibadan, 26 June 2024) Civil society organisations have called on the Chinese government to rescind its decisions to build crude oil pipeline across East African countries. In an open letter to the Chinese Embassy’s Charge d’affaire Zhang Yi, Smith Nwokocha of StopEACOP Nigeria called on China to stand with people on the right side of history and not finance the EACOP projects. He explained that as a local civil society organisation working alongside people who directly and indirectly have been or will potentially be impacted by the East African Crude Oil Pipeline project and the associated upstream oil projects (the EACOP projects) in Uganda, Tanzania, and the Democratic Republic of the Congo (DRC), together, and alongside partners across the world, operate as the StopEACOP Coalition. “China’s reported support is in stark contrast with the assessments of major global financial institutions, and as a result is being seen as the last resort for saving these deeply controversial projects. As of 26 June 2024, 28 insurance and reinsurance companies, 4 Export Credit Agencies, 27 commercial banks and the African Development Bank have publicly ruled out support for EACOP.” “Several have explicitly attributed their decision to concerns over EACOP’s ongoing and anticipated environmental and social impacts. For example, Standard Chartered Bank, which was considering financing the project, ultimately declined to do so after conducting an environmental and social due diligence assessment.” “A range of studies by various independent experts, international organisations, as well as local civil society organisations that support the project affected people, have shown that the EACOP project and the associated Tilenga and Kingfisher oil field projects will bring high risks to climate, biodiversity, and RAMSAR wetlands, as well as the livelihoods of local communities and sustainable development of our countries.”


QatarEnergy, Chevron Phillips Secure $4.4 Bln Financing for Petrochemicals Project

(Asharq Al-Awsat, London, 1 July 2024) QatarEnergy and Chevron Phillips Chemical Company LLC announced on Monday [10 October 2023?] that they have secured $4.4 billion financing for the Ras Laffan Petrochemicals project. The project financing comprises commercial and Islamic lenders and a group of export credit agencies. “This oversubscribed financing package is an important testament to the financial community’s confidence in Qatar and in its energy and petrochemical industries,” said Qatar's Minister of State for Energy Affairs and President and CEO of QatarEnergy Saad bin Sherida al-Kaabi. Ras Laffan Petrochemicals is a joint venture company owned 30% by Chevron Phillips Chemical and 70% by QatarEnergy, the statement added. [Interestingly a search of dozens of web sites on this project does not find any names of the commercial, Islamic or ECA financers of the $4.4 million!]


Brazil’s Petrobras tightens ties with Chinese banks and Sinosure

[BNAMERICAS, Santiago, 10 June 2024) Brazil’s state-run oil company Petrobras is tightening its financial ties with China. The federal oil giant's actions in this area have gathered momentum since the beginning of 2023, when President Luiz Inácio Lula da Silva assumed the country's presidency. Last year, Petrobras signed MOUs with China Development Bank (CDB) and Bank of China to assess investment opportunities and cooperation in low carbon initiatives and green finance. Last week, the company announced it had signed an MOU with China’s export credit agency Sinosure, with the same goals. The deal with Sinosure followed a series of agreements inked with Chinese companies such as China Petrochemical Corporation (Sinopec), China National Offshore Oil Corporation (CNOOC), China Energy International Group and Citic Construction Co. (CITIC).


JBIC fires up US$1bn loan for Australian LNG project

(Global Trade Review, London, 4 June 2024) Perth-headquartered Woodside Energy has secured a US$1.45bn loan package from Japan’s export credit agency and a group of private lenders, backing an LNG development off the Australian coast. As part of the deal, the Japan Bank for International Cooperation (JBIC) is providing a US$1bn loan that Woodside will use for its Scarborough Energy Project, which is slated to start delivering LNG by 2026. The facility will ensure a long-term and stable supply of LNG for Japan, says JBIC in a statement.


SACE EUR 100mln Push Facility provided to Eastern & Southern African Trade & Development Bank

(Zawya, Nairobi, 23 June 2024) The Eastern and Southern African Trade and Development Bank Group (TDB Group), SMBC Group (SMBC), Citi, and SACE are pleased to announce a EUR 100 million SACE Push Facility. This syndicated facility aims to support TDB's mission of fostering regional growth and integration, while increasing Italian procurement through the involvement of TDB and its clients. The facility aims to support various sectors across TDB’s member countries, promoting economic growth, job creation, and sustainable development. By encouraging the involvement of Italian companies in projects within member states, the agreement will foster cross-border cooperation and economic integration in alignment with the African Continental Free Trade Area (AfCFTA) and the Sustainable Development Goals (SDGs).


India mulls overhaul of trade finance market

(Global Trade Review, London, 5 June 2024) India’s government has commissioned a wide-ranging review of the country’s trade finance sector, including examining the role of export credit agencies and the possible introduction of laws recognising digital trade documents. The Ministry of Commerce and Industry believes a lack of trade finance is holding India back from achieving its target of exporting US$2tn-worth of goods and services by 2030, more than double last year’s figure of US$765.6bn.


SMEs should make more use of UKEF's little-known GEF

Daily Business Group, London, 5 June 2024) Smaller firms and banks are being urged to make more use of the General Export Facility (GEF), a relatively unknown but valuable government scheme. It is designed to boost Britain’s SME exports by providing an 80% guarantee to banks for loans to businesses specifically engaging in exports. GEF is one of several export finance initiatives overseen by the government’s Export Credit Agency which in 2023 provided around £6.5 billion of financial support to UK exporters.


What's New for May 2024

"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

  • U.S. EXIM Funding Fossil Fuels Abroad
  • End Polluter Welfare Act Supported by Over 300 US Organizations
  • US EXIM enters the battle against Chinese boycott of Lithuania
  • Audit slams US EXIM for weak performance in Africa
  • Bumper year for trade credit insurance, but claims rising
  • K-SURE to provide $1.3 bn credit for Saudi petrochemical project
  • Scottish firms win in 1st UKEF deal for oil & gas de-re?-commissioning
  • Vietnam's says HSBC to arrange funds for $1.49 bln refinery project
  • World Bank Group, NEXI to Bolster Investments in Developing Countries
  • HKECIC signs Guangdong pact with Sinosure
  • Etihad Credit Insurance records 21-fold growth
  • UK Export Finance unveils ambitious new target for SME support

U.S. EXIM Funding Fossil Fuels Abroad

(Living on Earth, Lee NH, 3 May 2024) Despite an international agreement to phase out financing for fossil fuel projects abroad, the Biden administration recently approved a $500 million dollar loan guarantee for an oil and gas drilling project in Bahrain. The Biden-Harris administration is coming under fire for failing to keep its promise to stop funding international fossil fuel projects. One of those critics is Nina Pušić, senior climate finance analyst with the advocacy group Oil Change International. At the U.N. Climate Conference in 2021, which was called COP26 in Glasgow, 39 governments and public finance institutions signed on to this initiative called the Clean Energy Transition partnership, also known as the Glasgow Statement. They promised that within one year they would stop new direct financial support to fossil fuel projects within the year. It was the Biden administration who signed on. So even though the Biden administration has promised that U.S. government agencies would stop funding fossil fuels, U.S. EXIM and DFC have decided that they're going to continue doing that regardless. And it wasn't just at the U.N. Climate Conference in 2021 where the Biden administration signed on to this, but it was also at the G7 in 2022. So it's not only one but actually two international commitments that this administration made.


End Polluter Welfare Act Supported by Over 300 US Organizations

(Sierra Club, Washington, 23 May 2024) Senator Bernie Sanders (I-VT) and Representative Ilhan Omar (D-MN) reintroduced the End Polluter Welfare Act, the most comprehensive legislative proposal to address the billions in special interest subsidies that disproportionately flow to the oil, gas, and coal industries. The reintroduction comes with the support of over 300 environmental, climate, consumer protection, and frontline organizations who have signed an organizational letter backing the legislation. These subsidies include century-old tax loopholes, giveaway leasing rules for extraction on our public lands and waters, and newer investments of billions into false solutions that keep fossil fuel projects alive for decades longer through investments from export credit and development finance agencies.” Among the over 300 signatories are prominent organizations such as the Sierra Club, Greenpeace USA, Friends of the Earth U.S., Oxfam America, People's Action, Public Citizen, Sunrise Movement, Oil Change International, WE ACT for Environmental Justice, 350.org, and the League of Conservation Voters.


US EXIM enters the battle against Chinese boycott of Lithuania

(ABC News, Washington, 27 May 2024) After Lithuania allowed Taiwan's de-facto embassy in Vilnius to bear the name Taiwan, instead of Taipei — Taiwan's capital city — as preferred by Beijing, Lithuanian businesses saw their cargo shipments to and from China stranded, and they were warned by major European businesses that Lithuanian-made auto parts would be barred from products for the Chinese market. Instead of caving in, Lithuania asked for help and American diplomats sought new markets for Lithuanian goods. The Export-Import Bank in Washington provided Vilnius with $600 million in export credit, and the Pentagon signed a procurement agreement with the country. The U.S. State Department has set up an eight-person team known as “the firm” to provide help to countries cut off from Chinese trade. Other examples: When a Norwegian committee in 2010 awarded the Nobel Peace Prize to a Chinese dissident, Beijing stopped buying salmon from the Nordic country. Two years later, China rejected banana imports from the Philippines over a territorial dispute in the South China Sea. In 2020, Beijing responded to Australia’s call for an investigation into the origin of the COVID-19 pandemic by raising tariffs on Australian barley and wines.


Audit slams US EXIM for weak performance in Africa

(Semafor, Legos, 23 May 2024) A scathing evaluation of the US Export-Import bank’s uneven approach to supporting US trade with sub-Saharan Africa has put its management on the backfoot. It comes the bank scrambles to make the opposite case with a slew of recent deal announcements. The report from the Office of the US Inspector General said the export credit agency had failed to expand its performance to achieve its sub-Saharan Africa mandate and in fact declined over the evaluation period from 2014 to 2023. It also found that, despite multiple Exim officials taking initiatives related to the region, there was no specific program or office designated with the responsibility. A senior Exim official pushed back at the report for not providing “a comprehensive picture of our efforts” in the region where it has a total exposure of over $8 billion.


Bumper year for trade credit insurance, but claims rising

(Global Trade Review, London, 29 April 2024) Export credit agencies and commercial trade credit insurers have celebrated an “exceptional” year for some key product lines, but are also experiencing a sharp rise in claims from customers, newly released data shows. New short-term trade credit insurance business rose 6% year-on-year to US$2.8tn in 2023, while medium and long-term (MLT) business shot up by 40% to US$165.4bn, according to a snapshot of full-year 2023 data released by the Berne Union on April 25.


K-SURE to provide $1.3 bn credit for Saudi petrochemical project

(Maeil Business News, Seoul, 24 May 2024) The Korea Trade Insurance Corp. (K-SURE), an export credit agency, said on Thursday that it will provide mid- to long-term export financing worth 1.7 trillion won ($1.3 billion) for the mega-scale Amiral petrochemical complex project in Saudi Arabia won by South Korean construction company Hyundai Engineering and Construction Co.


Scottish firms win in 1st UKEF deal for oil & gas de-re?-commissioning

(UKEF, London, 1 May 2024) UK Export Finance (UKEF) has closed its first ever transaction supporting overseas oil and gas decommissioning, securing finance for a major contract which benefits over 70 Scottish firms. The export credit agency has issued a $7.5 million guarantee which allows Brazilian contractor Ocyan to secure financing from ABC International Bank plc for new equipment from Scottish business Maritime Developments Ltd (MDL).  However in another online article, it turns out that this contract could be to remove old pipelines so as to re-commission idle oil rigs! UKEF does not name the rigs to be decommissioned. Yahoo Finance notes that "The contract [with Ocyan] will help Petrobras maintain a reliable supply of natural gas to its customers. The revitalized pipelines [eg Jorge Mitidieri and Renato Duque] will be able to transport additional gas, which will help meet the growing demand for natural gas in Brazil. Cost Savings: The deal will also help Petrobras in reducing costs. The new [recommissioned] pipelines will be more efficient than the old ones, which will help PBR save money on energy costs." It is not clear whether the decommissioned rigs are to be revamped or abandoned. Brazil is home to over 25% of the global FPSO fleets. At any rate, Brazil is clearly not leaving the offshore oil/gas rig industry thanks to UKEF, as implied by their press release.


Vietnam's says HSBC to arrange funds for $1.49 bln refinery project

(Tank Terminals, Hong Kong, 17 May 2024) Binh Son Refining and Petrochemical JSC (BSR), a subsidiary of state-owned Petrovietnam and operator of the Dung Quat oil refinery, has selected HSBC to coordinate an export credit agency (ECA) arrangement for a $1.49 billion expansion. In March, BSR had said it would spend VND36,397 billion ($1.49 billion) on expanding the refinery, increasing its capacity by 16% to 171,000 barrels per day or 7.6 million tons a year. The expansion also aimed to make products meet Euro V emission standards and other environmental requirements, while improving the facility’s flexibility to refine different kinds of crude oil. BSR aims to put the plant into operation in 2028 after 37 months of construction.



(ICE, Vietnam, 9 May 2024) Italian ECA SACE has unveiled a US$1.3 billion aid package aimed at supporting Italian businesses in Vietnam. Vietnam, one of the fastest-growing economies in Southeast Asia, has become a focal point for Italian companies seeking investment opportunities, said a SACE representative.“With a capital support plan of up to US$1.3 billion, Italian businesses as well as Vietnam will have easier access to technology and supplies from Italy to promote investment and development,” said Michal Ron, head of International Business at SACE, at a press conference on May 7.The funding will prioritize sectors such as renewable energy, manufacturing, and agriculture.


World Bank Group, NEXI to Bolster Investments in Developing Countries

(IFC, Washington, 28 May 2024) The World Bank Group's Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC) today signed three-year cooperation agreements with Nippon Export and Investment Insurance (NEXI), the official export credit agency of Japan, to promote foreign direct investment in developing countries. The agreements underscore the organizations' shared commitment to expanding investment opportunities and mitigating risks in developing countries. The cooperation between MIGA and NEXI builds on a 2020 agreement aimed at facilitating Japanese investment in developing countries through co-insurance and reinsurance instruments.


HKECIC signs Guangdong pact with Sinosure

(The Standard, Hong Kong, 23 May 2024) The Hong Kong Export Credit Insurance Corporation signed a pact with the Guangdong Branch of China Export & Credit Insurance Corporation, Sinosure, yesterday to strengthen cooperation on export credit insurance services for businesses across Guangdong and Hong Kong.


Etihad Credit Insurance records 21-fold growth

(24-7 Press Release, Seattle, 23 May 2024) Etihad Credit Insurance (ECI), the UAE Federal export credit company, unveiled its growth trajectory in its annual report for 2023. With a gross exposure of AED 9.6 billion (US$2.61 billion), ECI experienced a 21-fold increase compared to 2019. ECI's supported UAE exporters across 17 sectors in 110 countries, amounting to a non-oil trade and investment of AED 14 billion in 2023. This was facilitated by 21 agreements with government export credit agencies.


UK Export Finance unveils ambitious new target for SME support

(Global Trade Review, London, 1 May 2024) UK Export Finance (UKEF) has vowed to support 1,000 SMEs per year before the end of the decade, a big jump on current levels. The export credit agency (ECA) unveiled the target in its 2024-29 business plan this week. The plan also includes pledges to enable £12.5bn of export contracts and provide £10bn of “clean growth” financing by 2029. UKEF’s support for SMEs is closely scrutinised by UK lawmakers, because small businesses tend to find it harder to secure trade and export finance, compared to their larger peers. A handful of large companies, such as Rolls-Royce and BAE Systems, have previously scooped up the largest share of UKEF’s financial support by value. While the number of SMEs benefiting from UKEF’s backing is already high as a proportion of the agency’s overall customers, it still falls far short of the target of 1,000. Around 210 of the 251 customers UKEF supported in the 2023-24 financial year were SMEs. UKEF says it plans to boost its assistance to SMEs partly by on-boarding non-bank financial institutions that specialise in small business finance. A source at UKEF says such financial institutions would likely provide financing backed by a UKEF general export facility guarantee and need to have prior experience with trade finance. UK Export Finance (UKEF) typically charges premium rates of 6% to 7%, higher than other European ECAs according to an annual benchmarking report from the British Exporters Association.


What's New for April 2024

"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?

ECAs continue to favour fossil fuels over clean energy

(Global Trade Review, London, 10 April 2024) Export credit agencies (ECAs) in the world’s largest economies are still pumping billions of dollars more annually into fossil fuels than clean energy projects, fresh data shows, spurring calls for reform within the OECD Arrangement. ECAs in the G20 group of nations provided US$96bn towards fossil fuel projects between 2020 and 2022, finds a report published this week by campaign groups Oil Change International and Friends of the Earth. The US$32bn per year supplied by these institutions represents a 20% drop compared to the US$40.1bn yearly average from 2018 and 2020, figures show, highlighting efforts to reduce fossil fuel exposures. Yet the volume of ECA financing directed towards fossil fuels is still six times larger than that allocated to clean energy, which averaged US$5bn annually during this same period.


EU ECA fossil fuel phase-out tracker reveals Member States are lagging commitment to Paris Agreement goals in export credit policies

(Both Ends, Utrecht, 4 April 2024) The EU ECA fossil fuel phase-out tracker sheds light on the concerning lack of harmony between EU Member States' export credit climate policies. The report was updated on April 17th, following new responses by Member States on their respective policies. Despite increasing global efforts towards sustainability, export credit agencies (ECAs) play a key role in providing loans, guarantees and insurance backed by public budgets to companies from their countries, including polluting industries. At present, ECAs continue to be the world’s largest international public financiers of fossil fuels, sorely misaligned with climate goals. In March 2022, during the French Presidency of the Council of the EU, Member States made a crucial commitment to end public finance through ECAs for fossil fuel energy projects by the end of 2023. Recent findings reveal that half of the 23 EU member states with ECAs are fulfilling their commitments, while the others lag behind. Our findings show that only eight EU Member States, such as Denmark, France and the Netherlands, have fully implemented policies to phase out public support for fossil fuel projects. Conversely, five countries, including Bulgaria, Estonia, Lithuania, Poland and Portugal, have no formal policy but claim not to finance such projects. However, a worrying trend is emerging, with 10 Member States failing to honour their commitments. Some, such as Croatia, the Czech Republic and Greece, have yet to establish a policy to phase out export credit support for fossil fuels. Others, such as Austria and Italy, have published policies that are not in line with climate science and the mandatory 1.5°C pathway.


Public Enemies: Assessing MDB & G20 IFIs energy finance

(Price of Oil, Washington, 9 April 2024) This new report, “Public Enemies: Assessing MDB and G20 international finance institutions’ energy finance” looks at G20 country and MDB traceable international public finance for fossil fuels from 2020-2022 and finds they are still backing at least USD 47 billion per year in oil, gas, and coal projects. The findings reveal that the wealthiest G20 nations are the primary culprits behind continued investments in fossil fuels, with Canada, Korea, and Japan emerging as the worst offenders. The report also highlights where there has been momentum to end international public finance for fossil fuels, finding that if countries keep their existing commitments to end not only coal finance but also oil and gas finance, it would shift $26 billion annually out of fossil fuels by the end of 2024. Download the 38 page Report


JIBC provides US$3.3 billion to harmful Asian LNG projects

(Friends of the Earth Japan, Tokyo, 26 April 2024) From the straits of the Philippines to the coasts of the United States, Japan’s fossil fuel financing is harming the environment, climate, and communities at a time when the world is reeling from the ever-intensifying heat waves, floods, droughts, and typhoons brought by the climate crisis. While the world must phase out fossil fuels, as affirmed by the outcomes of COP28, Japan continues to funnel billions of dollars to liquefied natural gas (LNG) projects through its public institutions like the Japan Bank for International Cooperation (JBIC). In Southeast Asia alone, JBIC provided USD 3.31 billion to LNG projects that harm communities, derailing the region’s just transition to renewable energy. The Natural Resources Defense Council notes that "Japan stands out as one of the world’s top providers of public finance for gas, and the world’s largest provider of international public finance for LNG export capacity, providing $39.7 billion for projects built from 2012 onwards. Just in the two weeks ahead of Kishida’s meeting with Biden, Japan approved over $2.7 billion in financing for new gas projects, such as the controversial gas field in Australia, Block B gas project in Vietnam, the San Luis Potosi and Salamanca gas plants in Mexico, and financing to import LNG."


How the U.S. Can Still Meet its Global Climate Finance Pledges

(Natural Resources Defense Council, New York, 15 April 2024) In 2021, President Biden committed to increase U.S. international climate finance to over $11.4 billion per year by 2024. Of this, $3 billion per year was committed to investments in adaptation—historically underfunded—as part of the President’s Emergency Plan for Adaptation and Resilience. f delivered, this vital funding would spur much-needed emissions reductions in other countries, help the most vulnerable communities who have done the least to contribute to the climate crisis to adapt to its mounting impacts, and protect Americans and people around the world against the physical, economic, and security threats of climate change. It would also reinvigorate U.S. climate leadership, rebuilding trust with developing countries and catching up with other G7 countries who provide much more climate finance relative to their wealth. In mid-March, Congress finally passed the relevant spending bill for Fiscal Year 2024. It contained just $1 billion in dedicated funding for international climate programs. This is the third year in a row that Congress has failed to sufficiently deliver on U.S. international climate finance commitments. Just $1 billion in a spending package totaling $1.59 trillion sends a damaging message to the rest of the world.


China invites Uganda for talks on crude oil pipeline project financing

(Dispatch, Kampala, 5 April 2024) Uganda’s presidency confirmed that China has extended an invitation to Uganda’s Energy minister to visit Beijing for discussions on the country’s $5 billion 1,445-km (898-mile) crude oil pipeline project. This development offers hope for progress in Uganda’s efforts to secure Chinese financing for the pipeline, crucial for kickstarting crude production from oilfields discovered back in 2006. The potential involvement of Chinese funding gains significance as Western banks have refrained from financing the project following pressure from environmentalists, citing concerns over its impact on global carbon emissions. Prior discussions between Uganda and the Chinese export credit agency SINOSURE regarding potential funding for the project had been ongoing. However, several deadlines for concluding these talks had passed without reaching a resolution. Meanwhile, construction activities for the pipeline have commenced, involving the transportation of pipes and other materials to designated sites in both Tanzania and Uganda.


ECAs continue to debate fate of Mozambique LNG project

(Global Trade Review, London, 17 April 2024) Financial backers are continuing to assess whether they should reaffirm their support for a multi-billion-dollar LNG project in Mozambique as operator Total looks to restart work. The project was suspended in 2021 after insurgents known as the Islamic State Mozambique attacked Palma, a town in the northern province of Cabo Delgado. Total declared force majeure and withdrew its staff from the nearby Afungi project site. But earlier this year, the French energy major announced its intention to restart the project, meaning its financial partners are also expected to confirm their commitment. A coalition of 124 civil society groups, including BankTrack and Friends of the Earth, have called on financial backers to reconsider their support of the project and urged them to withdraw their funding due to “the continuation of insurgent attacks and the failure of the Mozambican government and TotalEnergies to tackle the drivers of the conflict”. They also cite “ongoing human rights violations” and “irreversible climate and environmental impacts” as reasons to end support. The project is backed by a range of public and private financial institutions, including eight export credit agencies (ECAs) and 15 commercial banks. The ECAs involved are the Export-Import Bank of the United States (US Exim), UK Export Finance (UKEF), the Export-Import Bank of Thailand, Italy’s Sace, Japan’s Nippon Export and Investment Insurance (Nexi), the Export Credit Insurance Corporation of South Africa (ECIC), Atradius DSB of the Netherlands and the African Export-Import Bank (Afreximbank).


High-Level EU Conference: 'Net-Zero by 2050: The Role of Export Finance'

(European Commission, Brussels, 25 April 2024) A High-Level Conference 'Net-Zero by 2050: The Role of Export Finance', organised by the European Commission's Directorate-General for Trade, was held on 25 April 2024 at the Thon Hotel (Rue de La Loi 75, 1040 Brussels) and online. This conference (was) an occasion to report on progress made by EU Member States following the Council Conclusion of March 2022 on export credits, which included an 'EU climate pact for export finance'. The web site is closed and no information on conclusions, proceedings or minutes have (yet) been published by the Commission at this time. Speech by Executive Vice-President Dombrovskis at the high-level conference 'Net-Zero by 2050: The Role of Export Finance' Conference agenda from March What's New


Meeting Statement - Heads of G7 ECAs

(SACE, Rome, 19 April 2024) The leaders of official export credit agencies from the G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom, and the USA – met on April 16th, in Tokyo, hosted by Nippon Export and Investment Insurance (NEXI), to discuss recent business trends and challenges. In the light of the increasing global geopolitical risks, the G7 ECA Heads have reaffirmed their role in protecting and promoting international trade and investment, and have recognised the importance of risk management for ECAs. The G7 ECA Heads recognise the need to enhance resilience to the impacts of climate change and to support businesses in responding to global climate issues. Acknowledging the need for urgency, the G7 ECA Heads agree to continue to proactively engage in a review of climate-related provisions under the framework of the OECD Arrangement and the Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. The G7 ECA Heads acknowledge the important role that ECAs continue to play in supporting their own exports and foreign investments and confirm that now, a variety of roles are expected, including promoting inclusive and sustainable trade and investment in developing countries, emerging markets and more established economies, and contributing to the realization of various policy agendas of their respective governments. In particular the G7 ECA Heads underlined their commitment to supporting Ukraine and reaffirmed their role in mobilizing private sector funds, and to continue this dialogue at the next Ukraine Recovery Conference on 11 June 2024 in Berlin.


U.S. EXIM Bank approves 'Make More in America' initiative to boost manufacturing

(Reuters, Washington, 14 April 2024) The U.S. Export-Import Bank's board on Thursday voted to approve a new tool aimed at boosting U.S. manufacturing, strengthening closing critical supply chain gaps, and supporting American jobs, the U.S. official export credit agency said. The Make More in America initiative will allow companies to tap existing medium- and long-term loans and loan guarantees for export-oriented domestic manufacturing projects as part of President Joe Biden’s push to bolster U.S. supply chains.


Proposed EXIM (Export-Import Bank) Reforms

(JDSUPRA, Sausalito, 16 April 2024) The U.S. Export-Import Bank (EXIM) is among the most impactful government agencies when it comes to helping U.S. companies compete for business internationally, finance domestic manufacturing, and build resilient supply chains. Up until 2019, EXIM policies and products were little changed despite the U.S. economy evolving dramatically away from traditional manufacturing to a technology and services-dominated economy. As a result, EXIM users are calling for EXIM to be more relevant and adaptable to our 21st-century economy. Lawmakers are hearing these calls and becoming more receptive to EXIM reform. For example, in 2019, Congress gave EXIM a mandate to bolster U.S. company competitiveness concerning China. EXIM users applauded. More reforms are under consideration in Washington.


Trafigura bags US$560mn ECA-backed deal to supply gas to Japan

(Global Trade Review, London, 4 April 2024) Global commodity trader Trafigura has secured a US$560mn facility from Japan’s export credit agency and SMBC that will fund the delivery of natural gas to the East Asian country. The transaction, signed on March 27, comprises a US$390mn loan from the Japan Bank for International Cooperation (JBIC) alongside co-financing from SMBC worth approximately US$170mn. The deal, the latest in a spate of export credit agency (ECA)-backed transactions for major commodities traders, will finance the import of liquefied natural gas (LNG) into the Japanese market.


REC Ltd Secures Japanese Green Loan from Italy's SACE

(GK Today, India, 27 April 2024) REC Ltd, a Maharatna Central Public Sector Enterprise (CPSE) and leading Non-Banking Financial Company (NBFC) under the Ministry of Power, Government of India, has successfully availed a green loan of Japanese Yen (JPY) 60.536 billion (approximately Rs 3,200 crore) to finance eligible green projects in India. The green loan facility benefits from an 80% guarantee by SACE under their innovative Push Strategy programme. It makes SACE’s first JPY-denominated loan transaction and first green loan in India. The loan saw participation from banks across Asia, US and Europe, including Crédit Agricole CIB, Bank of America, Citibank, KfW IPEX-Bank and Sumitomo Mitsui Banking Corporation as Mandated Lead Arrangers. Credit Agricole CIB is acting as the ECA Coordinator, Green Loan Coordinator, Documentation Bank and Facility Agent.


ECAs & Aviation Finance & Leasing: Global overview

(Lexology, London, 4 April 2024) The outlook for the aviation industry in 2024 is more positive than it has been for some years, despite the significant challenges ahead. To fill the subsequent funding gap, the ECAs (and, indeed, the manufacturers themselves) stepped up to the plate, but are now not needed as much. According to Boeing’s Commercial Aircraft Finance Market Outlook 2023, sources of industry delivery financing for 2022 can be broken down as follows: sale and leaseback:18%; cash:54%; capital markets:9%; bank debt:15%; and export credit:4%. ECA-guaranteed loan products covered only about 4% of new aircraft financings in 2019, substantially down from previous years, principally as a result of the restriction of the operations of UX EX-IM Bank and the European ECAs for several years. By the end of 2021, ECA support had increased to 9% of funding for the industry and nearly 5% cent of Boeing deliveries. Primary ECA financing comes from: Brazil: Brazilian Development Bank – supports Embraer; Canada: Export Development Canada – supports Bombardier and Pratt & Whitney; France: Bpifrance – supports Airbus and ATR; Germany: Euler Hermes – supports Airbus; United Kingdom: UK Export Finance – supports Airbus and Rolls-Royce; and United States: Export–Import Bank of the United States (US EX-IM) – supports Boeing, CFM, IAE, GE and Pratt & Whitney.


Gaza/Red Sea crisis: Export credit availability called to limit impact on Indian exports

(Business Standard, Delhi, 11 April 2024) The Ministry of Finance has written to the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai) to monitor export credit availability, and insurance premium increases to help Indian exporters deal with trade disruptions in the Red Sea due to Houthi attacks on cargo ships.


International lawyers advise ECA and international lenders in Latin American finance

(Latinvex, Miami, 24 April 2024) Milbank represented a consortium of export credit agencies and international lenders in connection with the $2.5 billion project financing for the $4.5 billion expansion of the Centinela copper mine in Chile and Mexican lending company MNJ Capital on a $500 million secured credit facility; Clifford Chance advised the lenders on a $500 million secured loan to Colombian investment manager Grupo SURA; Cleary Gottlieb represented Mexican glassmaker Vitro in a $100 million term loan with Netherlands-based ING Bank; Simpson Thacher represented Brazilian technology platform Brandlovrs Inc. in connection with an equity investment round led by Brazilian venture capital firm Kaszek and Arnold & Porter advised Canada-based Vela Industries Group in the acquisition of Chile-based fleet management, machine performance, and telematics software and hardware provider Samtech. Norton Rose Fulbright advises lenders on ECA-backed financing for two new LNG-powered ‘Worl​​​d Class​​’ cruise vessels for MSC Cruises.


Geopolitical Tensions might Threaten India's Export Growth, FIEO Urges Government Action

(Business Outlook India, New Delhi, 29 April 2024) Escalating geopolitical tensions may have implications for India's exports in the first quarter of 2024-25 as it is likely to impact global demand, says the Federation of Indian Export Organizations. The global uncertainties caused by continuing war between Russia and Ukraine has impacted India's outbound shipments in 2023-24, which recorded a decline of 3.11% to US$437 billion. Imports too dipped by over 8%  to US$677.24 billion. Re the impact of the Israel-Iran war certain exporters from engineering sector have stated that the demand for goods that are going to the UAE and then to Iran has come down. "If the global situation continues to be like this, it will impact global demand. In the first quarter numbers, the demand slowdown may be visible," FIEO Director General Ajay Sahai said. Further he asked for continuation of interest equalisation scheme which helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters get subsidies under the 'Interest Equalisation Scheme for pre- and post-shipment rupee export credit. "The rates should be enhanced to 3% & 5%" he said. "Due to demand slowdown, offtake of goods will be low so foreign buyers will also take a longer period to make payments. So we require funds for longer period. Exporters also need interest subvention support," Sahai said.


Ukranian ECA helped exporting companies raise UAH 99.8 mln

(Open 4 Business, Kyiv, 20 April 2024) As of April 1, 2024, the Export Credit Agency (ECA) supported Ukrainian exports by UAH 627 million (US$15.8m), which allowed the country’s exporters to attract UAH 99.8 million (US$2.5m) in financing from partner banks in cooperation with the agency, said Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine. “Supporting and developing processing companies that export their products to other countries is one of the priorities of the Made in Ukraine state policy."


China denounces U.S. shipbuilding probe as politically motivated 'mistake'

(Yahoo Finance, Washington, 18 April 2024) China late Wednesday called on the United States to end its investigation into its shipbuilding industry, denouncing the probe as a politically motivated "mistake." The official statement from China's Ministry of Commerce was issued hours after U.S. President Joe Biden discussed the investigation during a speech he gave Wednesday at the United Steelworkers headquarters in Pittsburgh, Pa. The unfair practices alleged include policy loans from state-owned banks, equity infusions and debt-for-equity swaps, the provision of steel from state-owned steel producers at below market value, tax preferences, grants and "lavish financing from China's state-owned export credit agencies," among others.