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 May 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.

  • Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing
  • Pity the Export-Import Bank, caught between warring Republican factions
  • Liberals caught again in SNC Lavalin EDC Scandal
  • Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative
  • Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs
  • China’s export insurance giant is taking a risk on coal
  • Legal challenge mounted against Kosovo coal project
  • China, Japan and South Korea, while vowing to go green at home, promote coal abroad
  • European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia
  • EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt
  • New EDC human-rights policy lacks power, say workers and watchdogs

Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing

(Friends of the Earth, Washington, 8 May 2019) The U.S. Senate today voted to confirm 3 nominees to the Board of Directors of the U.S. Export-Import Bank. The confirmation allows Ex-Im to establish a board quorum, clearing the way for the bank to revive its financing of billions of dollars in fossil fuel projects abroad. After nearly four years without full authority to operate, today’s Senate vote paves the way for 12 fossil fuel projects in the agency’s queue to progress forward to a board vote — with many more applications for financing likely to come. These dirty projects will result in tens of millions of tons of carbon dioxide emitted into the atmosphere annually. “By approving these new directors, the Senate is letting the Export-Import Bank fuel the crisis of climate change,” said Doug Norlen, economic policy program director at Friends of the Earth. “The bank will return to its past practice of supporting projects that damage the global climate, harm community health, violate human rights and hasten corruption. Rather than addressing the threat of climate change proactively, this is a vote to make the Export-Import Bank Trump’s billion-dollar fossil fuel slush fund.” Two Presidential Candidates have now said they want Ex-Im Bank's fossil fuel financing halted.  Sen. Bernie Sanders voted against Trump's nominees and is quoted in this article saying Ex-Im “should not be providing low-interest loans and loan guarantees to big fossil fuel companies that are endangering the planet.”  And, Washington State Governor and Presidential Candidate Jay Inslee just released his Evergreen Economy for America Plan which pledges "to cease all support for new fossil energy projects" by Ex-Im Bank and OPIC. Ex-Im's Congressional authorization expires Sept. 30, so the fight is brewing again!

https://foe.org/news/senate-confirmation-export-import-bank-directors-means-bill...


Pity the Export-Import Bank, caught between warring Republican factions

(ctpost, Norwalk, 8 May 019) No federal agency has lived such a bizarre state of suspended animation as has the Export-Import Bank, a long-obscure bureau that provides loan guarantees to U.S. companies doing business abroad. Rather than heralding it as a force for job creation, free-market conservatives turned Ex-Im into an ideological rallying cry that led to some of the most bitter disputes in Republican circles this decade. GOP senators called each other liars. House conservatives threatened to oust the speaker. Rank-and-file Republicans rebelled against the rebellion to save the bank. That changed Wednesday, when Senate Majority Leader Mitch McConnell, R-Ky., allowed confirmation votes on three board members, each of whom passed with near-unanimous Democratic support and sizeable Republican opposition. Once again, Ex-Im is back in business, able to support loans larger than $10 million for some of the largest U.S. exporters. But the fight is far from over. Just as it is finally getting a board, the Ex-Im Bank faces another fight over its very existence, as the 2015 legislation reauthorizing the agency is set to expire in the fall, setting up a debate that never seems to end and has left the bank's supporters continually puzzled.

https://www.ctpost.com/news/article/Pity-the-Export-Import-Bank-caught-between-1...


Liberals caught again in SNC Lavalin EDC Scandal

(Yorkton This Week, Yorkton SK, 15 May 2019) Export Development Canada (EDC), Canada's export credit agency, was created in 1944 to promote Canadian business overseas. It has 12 offices across Canada and 19 regional offices around the world. According to CBC reports SNC Lavelin have borrowed billions of dollars since the mid 1990’s from EDC. SNC Lavalin resulted from a merger of Surveyor, Nenniger, Chenevert and Lavalin all based in Quebec in 1991 instantly becoming one of the five largest engineering/construction companies in the world. They have been doing work in countries where bribery and corruption are common practice. They conform to the culture of the country and perform with their own questionable behavior. SNC Lavalin have been working on a slippery and shady slope. Even when applying for loans, they insert unsupported contingencies which seem to infer bribery money. Their worsening reputation worldwide was highlighted in 2011 and 2012 with high profile executives being arrested and jailed in Switzerland, the corporate head office of their construction division. Corruption had been uncovered for work being done in Mexico, Libya and Bangledesh. A result of this incident was the World Bank suspending a 1.2 billion dollar loan application for a proposed project in Bangledesh. In April, 2012 the World Bank suspended SNC Lavalin from bidding on any other bank projects. It would be interesting to see a complete list of their ongoing allegations!

https://www.yorktonthisweek.com/opinion/letters/liberals-caught-again-in-snc-lav...


Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative

(Globe and Mail, Toronto, 14 May 2019) Canada’s overseas development finance arm is joining forces with a U.S. government agency that is being set up to act as a counterweight to China’s Belt and Road Initiative, a state-sponsored foreign-investment scheme by Beijing. The U.S. government’s Overseas Private Investment Corp. (OPIC) says in a statement the agreement it signed with both Canada’s FinDev and the European Union last month creates an alliance of development finance institutions that will enhance co-operation and underscore their collective commitment to "providing a robust alternative to unsustainable state-led models.” The Canadian government’s development finance arm is being funded with $300-million from the retained earnings of Export Development Canada, the federal government’s export credit agency.

https://www.theglobeandmail.com/politics/article-canada-strikes-alliance-with-us...


Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs

(Guardian, London, 8 May 2019) The British government’s aid spending is failing to recognise the “scale and urgency” of the climate change challenge facing the world, MPs warn. Climate change must be placed at the centre of aid strategy and funding, if it is to address the seriousness of threats facing developing countries, the committee said. It urged a minimum spend of £1.76bn annually and a halt to funding fossil fuel projects in developing countries, unless they can demonstrate they support transition to zero emissions by 2050. The report highlighted “incoherent policy” by, showing the government spent £4.8bn on support for fossil fuel projects in 2010-16 via UK Export Finance, almost matching the £4.9bn spent on its International Climate Fund in a similar period, 2011-17. It has created a situation where “the UK government is providing climate aid with one hand and exporting the UK’s fossil fuel pollution with the other”, the report found. Ban Ki-moon, the former UN secretary general, urged Britain to stop funding fossil fuels overseas earlier this year.

https://www.theguardian.com/global-development/2019/may/08/aid-funding-must-reco...


China’s export insurance giant is taking a risk on coal

(Resource China, New York, 25 April 2019) Worldwide, a growing list of insurers now refuse to cover coal projects, citing risks from climate change and overcapacity. But Sinosure, the sole underwriter of coal-fired power plants along China’s Belt and Road Initiative (BRI), has yet to show any indicator of leaving coal behind. China’s foreign direct investment has more than doubled over the past three years, with much of it funneled into energy development. Coal has dominated these investments, combining coal-rich resources in many Belt and Road countries and China’s coal tech. Observers tend to focus on the role of financiers and power companies in overseas coal projects, but the importance of insurers should not be overlooked. Because insurance is a prerequisite for obtaining a loan on an overseas investment project, support from an insurer is needed for a project to move forward. State-owned China Export & Credit Insurance Corporation, known as Sinosure, acts as gatekeeper of energy investments along the BRI. Sinosure is China’s only policy insurer to cover overseas coal-fired power projects, meaning that overseas coal power projects require a green light from Sinosure to go ahead. By the end of 2018, Sinosure had underwritten 28 gigawatts of coal power capacity worldwide, exceeding the entire coal capacity of Australia.

https://medium.com/resource-china/chinas-export-insurance-giant-is-taking-a-risk...


Legal challenge mounted against Kosovo coal project

(Bank Watch, Prishtina 13 May 2019) Kosovar and international non-governmental organisations have today submitted an official complaint to the Energy Community dispute settlement mechanism challenging the legality of the power purchase agreement for the planned Kosova e Re coal power project, which is currently awaiting ratification by the Kosovo parliament. The complaint alleges that the 20-year power purchase agreement, signed by the Kosovar government with ContourGlobal in December 2017 fails to comply with the Energy Community Treaty rules on state  aid because it provides ContourGlobal a range of benefits that give it an unfair advantage over other energy producers. The contract would also put an unbearable strain on the state budget and Kosovar electricity consumers as it guarantees that a state-owned company will buy all the electricity generated by ContourGlobal at a “target price” of EUR 80/MWh – much higher than current electricity prices in the region. The World Bank and the European Bank for Reconstruction and Development (EBRD) have refused to provide support for the 500 MW New Kosovo coal power plant. Kosovo and London-listed power firm ContourGlobal said on Friday May 10 they had chosen a consortium of General Electric subsidiaries to build and equip a new 500 megawatt (MW) coal-fired power plant in the Balkan country. Kosovo has turned to the Trump administration for help to build a coal-fired power plant after losing the backing of the World Bank and the EBRD.

https://bankwatch.org/press_release/legal-challenge-mounted-against-kosovo-coal-...


China, Japan and South Korea, while vowing to go green at home, promote coal abroad

(Los Angeles Times, Suralaya, 13 May 2019) In the last-ditch global battle against climate change, China, Japan and South Korea have joined other industrialized nations in promising to reduce their use of fossil fuels. Yet even as they take steps to promote renewable energy at home, these three countries are facing growing scrutiny for financing dozens of new coal-fired power plants in foreign countries, primarily underwritten by their export credit agencies. Most of the plants are being built in Southeast Asia and Africa, in emerging economies where the growing demand for cheap, reliable electricity is most easily met by coal, the single largest source of the greenhouse gas emissions blamed for warming the planet. Environmental groups accuse the three Asian giants of climate hypocrisy.

https://www.latimes.com/world/asia/la-fg-indonesia-south-korea-coal-energy-finan...


European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia

(Deutsche Welle, Bonn, 29 May 2019) Financial troubles may force Malaysia to drop its plans to buy highly capable multirole combat aircraft (MRCA) and settle for cheaper, less capable fighter jets to replace its current fleet of Russian MiG 29s that are mostly grounded. Europe's MRCA makers Eurofighter and Dassault Aviation have been wooing Malaysia for almost a decade for a deal. Kuala Lumpur has threatened to boycott EU goods, if the 28-nation bloc goes ahead with its plan to phase out palm oil from transport fuel after the European Commission concluded that palm oil cultivation, with some exceptions, caused deforestation and that its use in transport fuels could not be counted toward its renewable energy goals. Malaysia has said China, Russia and Pakistan have expressed their willingness to be partly paid in palm oil for their fighter jets. This is likely to complicate matters for the RMAF, which has traditionally preferred using Western equipment, including on its Russian Sukhoi jets. Malaysia's latest attempt at barter trade could be beneficial for Russia, which has seen China walk away with many defense deals in the region and undercut Moscow's arm supplies. Russia has a long track record of swapping weapons for commodities in the region, including as part of its fighter jet deals with Indonesia and Vietnam.

https://www.dw.com/en/setback-for-eu-fighter-jets-as-malaysia-bets-on-palm-oil-b...


EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt

(US General Accounting Office, Washington, 23 May 2019) The Export-Import Bank (EXIM) of the United States provides financing to support U.S. jobs and companies selling U.S. goods and services abroad. EXIM requires companies applying for certain financing to self-certify that they do not have delinquent federal debt. Financial pressures that stem from such debt can tempt companies to fraudulently apply for financing. However, after analyzing federal data, we identified billions of dollars in authorized EXIM transactions associated with dozens of companies that potentially had such debt. We recommended EXIM explore opportunities to use federal data when verifying companies' program eligibility.

https://www.gao.gov/products/GAO-19-337


New EDC human-rights policy lacks power, say workers and watchdogs

(National Post, Ottawa,  May 2019) OTTAWA — Export Development Canada is declaring itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed. The United Steel Workers of Canada declared it a missed chance to show leadership in global finance, business and human rights. The arrival of the new policy comes as Canadian businesses and human-rights advocates await a legal review by International Trade Minister Jim Carr that will determine the powers of the government’s new “ombudsperson for responsible enterprise.” Karen Hamilton, the spokeswoman for Above Ground, a non-governmental agency that specializes in tracking human rights infractions involving businesses, said the group hopes Carr’s legal review leads to a change in EDC’s legislation to make stronger human rights obligations mandatory. “If we really want to see change, it has to be legislated,” Hamilton said.

https://nationalpost.com/pmn/news-pmn/canada-news-pmn/new-edc-human-rights-polic...


What's New April 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.

  • European Commission consultation on short-term export credit rules
  • SNC-Lavalin insider's bribery allegations spark EDC probe
  • German parliament approves ECA supported sale of 6 heavy frigates to Egypt
  • EFIC Reform Puts Pacific ‘Step-Up' at Risk
  • India's Jet Airways delays payments to global lenders guaranteed by ExIm
  • Riyadh aims to counter Tehran’s influence with Iraq ECA credits
  • Iran's ECA Reassures Foreign Trade Partners
  • China gives Naftogaz $1 billion ECA guarantee
  • Eskom’s black hole of debt keeps on getting bigger
  • How Gujarat fishermen won US top court ruling against global funding
  • UAE ECA ECI voted as observer member of Berne Union
  • Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

European Commission consultation on short-term export credit rules

(UKIF, London, 30 Aprill 209) The European Commission is inviting relevant stakeholders to participate in a consultation on the short-term export-credit insurance Communication that is expiring at the end of 2020. The consultation is a backward-looking evaluation, to identify whether those rules should be prolonged in their current form or possibly updated. The deadline to submit contributions is 24 May 2019.

Respond to the survey.

Read the Commission communication to member states

https://www.gov.uk/government/news/european-commission-consultation-on-short-ter...


SNC-Lavalin insider's bribery allegations spark EDC probe

(CBC, Toronto, 3 April 2019) Export Development Canada has hired outside legal counsel to review some of its dealings with SNC-Lavalin. The review comes after a company insider told CBC News the engineering giant secured billions in loans from the Crown agency over the years, some of which he alleges was intended to pay bribes. EDC has denied knowledge of any improper payments, but last Friday said it is taking a closer look at a 2011 deal with SNC-Lavalin involving a $250-million project to refurbish the Matala hydroelectric dam in Angola. EDC has backed SNC-Lavalin projects in 19 countries since 1995. In 2012 the head of SNC-Lavalin's construction division was arrested in Switzerland for bribery in Libya. The sheer size of "technical fees" which could total as much as 10% of a project's overall budget should have raised flags. In 2013 the CBC and the Globe and Mail exposed secret payments for projects in Africa, India, Cambodia and Kazakhstan.

https://www.cbc.ca/news/canada/snc-lavalin-export-development-canada-loans-1.507...


German parliament approves ECA supported sale of 6 heavy frigates to Egypt

(Middle East Monitor, London , 5 April 2019) The German Parliament Budget Committee has approved export credit guarantees to secure the sale of six heavy frigates worth €2.3 billion (US$2 billion) to Egypt from ThyssenKrupp Marine Systems. The ships can be supplied with weapons including guided missiles and torpedoes. Green Party Budget expert, Tobias Lindner, criticised the deal and highlighted Egypt’s human rights record. “The government’s arms export policy is becoming increasingly contradictory,” Lindner told Bild, adding that “people have been fighting for weeks against weapons deliveries to Saudi Arabia, while at the same time wanting to deliver frigates to the military dictatorship in Egypt.”

https://www.middleeastmonitor.com/20190405-german-parliament-approves-sale-of-6-...


EFIC Reform Puts Pacific ‘Step-Up' at Risk

(Australian Council for International Development, Canberra, 14 Feb, 2019) ACFID has raised concerns about reform to Australia’s export credit agency - EFIC - as part of the Australian Government’s Pacific ‘step-up’ and is calling for the legislation to be referred to a parliamentary committee for scrutiny. The Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019 introduced to the House of Representatives proposes reform to EFIC so it can administer $1.2bn in callable capital to finance Australian businesses to build infrastructure overseas. The increase for EFIC from $200m to $1.2bn in callable capital and the Minister’s statement that EFIC will assist in administering loans for the Australian Infrastructure Financing Facility (AIFFP) is cause for concern. ACFID stressed that it is untenable to have $1.2bn of taxpayers’ funding being used for Australian businesses without transparency in its delivery and reporting. A financial scale-up without the relevant capabilities and expertise within EFIC, and the lack of transparency over how EFIC will interact with other Government departments, raises very serious concerns in the aid sector over the suitability of EFIC in holding such a central role in administering new loan-finance. DFAT reassured the Senate that there was no need for any such requirement since Efic has signed up to various OECD export credit guidelines, and will “carefully assess” any number of things to ensure that only good projects are selected, in particular the country’s capacity to repay the loan. [ECA Watch note: The OECD Arrangement's "gentlemans' agreement" and peer review process has not proven much of a deterrent to bad practice, as show by the many flaws and concerns raised here on the ECA Watch web site.]

https://acfid.asn.au/media-releases/efic-reform-puts-pacific-%E2%80%98step-risk-...


India's Jet Airways delays payments to global lenders guaranteed by ExIm

(Money Control, Mumbai, 8 April 2019) India's' cash-strapped Jet Airways has delayed repayments to global lenders, including Citibank, that funded the purchase of its Boeing 777 planes the Economic Times reported. The repayments, worth over $18 billion, were due at the end of March. The banks loaned funds to the carrier based on guarantees from the Export-Import (EXIM) Bank of the US, which can be invoked in case of a default. If a default occurs, it would be bad news for Jet as the US ECA would deregister and take back the planes. Almost two-thirds of Jet's fleet have been grounded due to non-payment of its dues.

https://www.moneycontrol.com/news/business/jet-airways-delays-payments-to-global...


Riyadh aims to counter Tehran’s influence with Iraq ECA credits

(Financial Times, Riyadh, 4 April 2019) Saudi Arabia is intensifying diplomatic efforts to boost ties with Iraq, as the kingdom aims to strengthen its influence on regional rival Iran’s doorstep. The kingdom’s harsh treatment of Shia clerics sparked demonstrations in Iraq, and many Iraqis blamed Saudi Arabia for fuelling hardline Sunni Islamist ideology that gave rise to the Isis extremist group. However, since 2016, Riyadh has taken a more nuanced view of Iraqi politics that aims at chipping away at Iranian influence by denying Tehran the sectarian card. Saudi officials arrived in the Iraqi capital this week, wielding a $1bn grant for a sports stadium. Last year the Saudis pledged a $1bn loan for reconstruction in Iraq, plus $500m in export credit.

https://www.ft.com/content/4e2a8558-56ef-11e9-91f9-b6515a54c5b1


Iran's ECA Reassures Foreign Trade Partners

(Financial Tribune, Tehran, 30 April 2019) CEO of the Export Guarantee Fund of Iran says the fund has taken special measures to shield exports from the negative impact of US sanctions. “In light of the new US sanctions and the fact that foreign traders do not receive Iranian bank [export] guarantees, the fund is willing and able to cover the commercial risks for exporters,” she noted. The EGFI said earlier that it wants to expand risk cover for export insurance by $2.5 billion in the current fiscal (started March 21) and increase the penetration rate of export guarantees.

https://financialtribune.com/articles/business-and-markets/97660/irans-eca-reass...


China gives Naftogaz $1 billion ECA guarantee

(Kyiv Post, Kyiv, 2 April 2019) China has been eyeing strategic investments and acquisitions across Ukraine for at least a year now – but a Chinese state-owned credit firm, Sinosure, appeared to up the stakes on April 2 as it inked a deal to provide $1 billion in insurance coverage to Ukrainian energy conglomerate Naftogaz. Naftogaz has said that the new Chinese insurance is essentially a financial guarantee on the company being able to attract debt financing and further direct investment from China. Naftogaz is the state-owned Ukrainian oil and gas monopoly that handles the extraction, refinement and transportation of natural gas and oil. Data shows that China might replace Russia as Ukraine’s largest single-nation trading partner if growth rates in bilateral commerce between the two countries remain steady or increase. Ukraine’s Western and NATO allies, especially Japan, the United States and the United Kingdom have expressed strong concerns about China’s interest in Ukraine – they warn that investments are largely driven by Chinese self-interest and could pose a security threat to the alliance and Ukraine.

https://www.kyivpost.com/business/china-gives-naftogaz-1-billion-guarantee-on-de...


Eskom’s black hole of debt keeps on getting bigger

(The Citizen, Johannesburg, 3 April 2019) Moody’s credit opinion issued yesterday on the heels of its recent decision to keep South Africa’s credit rating one level above junk, said elevated government debt and contingent liabilities risks from state-owned enterprises (SOEs), limited government’s ability to absorb shocks. The note came after Eskom’s announcement of a R2.5 billion loan from the New Development Bank in China on top of the R420 billion (US$29 billion) debt it’s already carrying, and there’s no say when the 670 MW of renewable energy it’s meant for, will come on line. Export credit agency finance is one of the sources Eskom is tapping as part of its R300 billion (US$21 billion) funding plan for the new build programme. More than three quarters of that funding has now been secured. On May 30, 2011, the Export Import Bank of the United States had loaned about R5.7 billion, adding at the time to “the R31 billion (US$2.2 billion) in export credit agency backed finance Eskom had already raised.

https://citizen.co.za/business/business-news/2110845/eskoms-black-hole-of-debt-k...


How Gujarat fishermen won US top court ruling against global funding

(Indian Express, Ahmedabad, 10 April 2019) On February 27, the US Supreme Court ruled in favour of a group of fishermen and a Gujarat village panchayat in a suit against the US-headquartered International Finance Corporation (IFC). The case, which now goes back to a US district court, relates to alleged pollution caused by a Gujarat-based power plant partly funded by IFC and Korean ECA KEXIM. Of the estimated project cost of $4.14 billion, $450 million was funded in 2008 by IFC, the Asian Development Bank advanced $450 million as loan, the Export Credit Agency of Korea extended another $800 million as loan, and CGPL raised around Rs 1.5 billion from Indian banks through debt. According to National Fish Worker’s Forum, a nationwide federation of fishermen organisations, the plant operates a cooling technology that requires much more water than the system it got clearance for. The water is eventually discharged into the sea, and the complainants have alleged that it has affected marine life. Budha Jam, leader of the fishermen community of Tragadi-Nal, says: “With marine life near the coast affected, we are forced to sail farther in search of fish. They also dredged the coast and seafloor for their outfall channel and deposited sand near a well, which was a source of drinking water. Water in the well has turned saline since.” Complainants add that coal dust and fly-ash from the plant are damaging date palms and chikoo trees in Navinal. [One wonders how KEXIM's adherence to the OECD's Common Approaches could have allowed this.]

https://indianexpress.com/article/explained/how-gujarat-fishermen-won-us-top-cou...


UAE ECA ECI voted as observer member of Berne Union

(Times of Oman, Muscat, 28 April 2019) Etihad Credit Insurance (ECI), the UAE Federal credit insurance company, was voted in as an observer member of the Berne Union, a renowned global association that represents the global export credit and investment insurance industry. In 2018,Berne Union members delivered US$2.5 trillion of payment risk protection to banking institutions, exporters and investors which is equivalent to 13 per cent of total cross-border merchandise trade.

https://timesofoman.com/article/1208694/Business/Economy/ECI-voted-as-observer-m...


Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

(ABC, Sydney, 4 April 2019) Hundreds of Australian and New Zealand cattle have died in a Federal Government-backed export deal with Sri Lanka, which local farmers say has left them broke, and in some cases, suicidal. Farmers and animal rights groups, as well as Sri Lanka's own auditor-general, want the export project stopped because they say it is poorly planned and inhumane. Angry Sri Lankan farmers have told the ABC the "high-yielding, pregnant dairy cows" they were promised were overpriced, unhealthy and infertile. Sri Lankan business consultant Mohammed Mausook Riyal, adding that the cows were the wrong breed for the climate, making them susceptible to disease, and farmers could not make a profit because of poor milk yield and low conception rates. Under the terms of the $100 million project, underwritten by the Australian Government's export credit agency, EFIC, the exporter, Wellard, was required to provide Sri Lankan farmers with facilities, training and veterinary support.

https://www.abc.net.au/news/2019-04-04/australian-dairy-cattle-sent-to-sri-lanka...


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


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