(AIN, New York, 20 May 2013) Boeing’s recent assertion of an increased appetite in capital markets to fund airliner orders is welcomed by manufacturers and their customers when other sources of funding seem under pressure. Export credit, now comes generally at higher interest rates and tougher equity requirements while such government-backed capital has become a hostage to global politics, according to Kostya Zolotusky of Boeing Capital. “There are no surprises [about export credit becoming harder to secure] because it continues to be political on all sides,” he said. Zolotusky predicted further rancor between Brazil and Canada over their long-running squabble about accusations that each country illegally subsidizes their national aerospace champions–Embraer and Bombardier, respectively. Also clouding the export credit environment is how January’s new OECD administered Aircraft Sector Understanding, may resolve long-running disputes over issues like the “home market” rule under which Europe and the U.S. maintained a long-standing agreement to abstain from providing financing to airlines in their own or each other’s domestic markets. This prompted accusations from “home” carriers of alleged anti-competitive assistance for new rivals from other regions, such as the fast-growing Arabian Gulf airlines. Last month Delta Air Lines significantly elevated the issue when it filed a lawsuit against the U.S. Export-Import (Ex-Im) Bank.
Canada
Ministerial Meeting on Mobilizing Climate Finance Includes ECAs
(US State Department, Washington, 11 April 2013) Ministers and senior officials from more than a dozen donor countries met in Washington, D.C. on April 10-11 to discuss ways to meet the challenge of scaling up low-carbon investment in developing countries. Convened and chaired by the USA, participants included Australia, Canada, Denmark, the European Union and Presidency, France, Germany, Italy, Japan, New Zealand, Norway, Poland, Switzerland, the United Kingdom, and the United States. Attendees included ministers and senior officials from a broad range of government entities, including ministries of foreign affairs, environment, finance, and development, as well as representatives from development finance institutions and export credit agencies.
Afreximbank Gets $30m From EDC To Boost Africa-Canada Trade
(Ventures Africa, Cape Town, 15 November 2012) In a move to improve trade ties between the continent and Canada, the African Export-Import Bank (Afreximbank) has been awarded a $30 million (4.8 billion naira) five-year line of credit by Canada’s export credit agency, Export Development Canada. The agreement to the credit line, which would provide finance for African companies procuring Canadian goods and services.
Barrick Gold reveals exorbitant cost overruns on ECA rejected Pascua Lama mine (PDF)
Barrick Gold reveals exorbitant cost overruns on ECA rejected Pascua Lama mine (PDF)(Halifax Initiative, Ottawa, 3 August 2012) On July 26, Barrick Gold presented its second quarter results, announcing a further, year-long delay and exorbitant cost overruns of between 50 and 60% of recent estimates for its Pascua Lama mine on the Chile/Argentina border. Project costs will increase by as much as US$3 billion, bringing the total expense to an astounding US$8 billion, a marked contrast from initial estimates in 2001 of US$950 million. In 2010, Barrick applied for loans for the project from public financial agencies in Canada (Export Development Canada) and the United States (Export-Import Bank). Affected communities then provided the agencies with information about Barrick’s operations in their territories and this year, Barrick withdrew its requests, forfeiting both the loans and the accompanying political endorsement. It seems clear that both public agencies were poised to reject the company’s request, which would have sent a negative signal to shareholders.
EDC issues annual corporate social responsibility report
(CSRwire, Ottawa, 10 July 2012) Export Development Canada (EDC), Canada’s Export Credit Agency, today issued its Annual Report on Corporate Social Responsibility (CSR). The report outlines EDC’s key achievements in the areas of business ethics, transparency, the environment, community investment and employee engagement.
