(Mining.COM, Toronto, 21 November 2024) Troilus Gold (TSX: TLG) continues to receive the financial backing of global export credit agencies (ECAs), this time from Export Development Canada (EDC), to support the development of its copper-gold project in Quebec. On Thursday, the company announced a new letter of intent (LOI) from EDC for up to $300 million. This, together with the LOIs recently signed with the export credit agencies of Germany, Finland and Sweden, brings the total potential funding to $1.3 billion.
Finland
Finnvera Group 2022 Financial Statements
(Yahoo Finance, Helsinki, 16 February 2023) “Despite the impacts of the coronavirus pandemic, the war launched by Russia and the uncertain operating environment as well as inflation, Finnish companies were very active in 2022, and the demand for Finnvera’s financing remained at a high level. Finnvera granted domestic loans and guarantees amounting to EUR 1.0 billion (1.5). More than 90% of the financing was allocated to Finnvera’s strategic priorities, that are start-ups, companies aiming for growth and internationalisation and, for example, transfers of ownership. Finnvera granted EUR 5.9 billion (4.6) in export credit guarantees and special guarantees, and EUR 0.9 billion (0.7) in export credits. The largest individual financing projects concerned forest sector deliveries to Brazil and telecommunications sector deliveries to the United States and Japan. Finnvera has paid a total of EUR 100 million in compensation for liabilities at the beginning of February 2023. The final amount of Finnvera’s losses will be determined later. The loss provisions for exposure in Russia remained unchanged, the loss provisions made in the cruise shipping sector were reduced and the loss provisions for the domestic financing increased in the last quarter of the year. Due to the war and arrangements necessitated by sanctions, Finnvera’s exposure relating to Russia more than halved to EUR 422 million during the year,
Finnvera change signals new ECA opportunities for SMEs
Global Trade Review, London, 18 January 2023) Finland’s export credit agency (ECA), Finnvera, can now offer credit directly to foreign customers of Finnish export companies after the country’s parliament approved a necessary amendment last week. Finnvera says that the goal is to give smaller export projects and small and medium-sized enterprises (SMEs) improved access to financing. “Currently, Finnvera grants large export credits to foreign buyers but only in cooperation with banks. However, it has been difficult to arrange buyer financing for export transactions amounting to less than €20mn, which has slowed down the development of the exports of Finnish SMEs in particular,” Juuso Heinilä, executive vice-president at Finnvera, tells GTR.
Italy pushes to weaken European fossil fuel financing pledge
(Reuters, Brussels, 2 November 2022) Italy is attempting to weaken a pledge 10 European governments intend to make to stop export credit support for fossil fuel projects. The pressure from Italy comes as delegates from nearly 200 countries prepare for a United Nations climate change summit next week in Egypt, where world leaders will attempt to agree tougher action to tackle global warming. A group of ministers planned to make a joint statement on November 3rd committing to end public trade and export finance support for overseas fossil fuel projects by the end of 2022. The countries, which together make up the “Export Finance for Future” group, are Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Spain, Sweden and Britain. [Delays in the statement’s release point to controversial negotiations.] A draft of the governments’ statement, seen by Reuters, said they would agree to end new direct official trade and export finance support for “exploration, production, transportation, storage, refining, distribution of coal, crude oil, natural gas, and unabated power generation”. Three sources familiar with the discussions told Reuters Italy had asked to remove the list specifying which fossil fuel activities would lose such support. “Italy objects that there is no consistency between the objective of achieving strategic autonomy from Russia and the impossibility of financing the necessary infrastructure,” an official briefed on Rome’s position told Reuters. Italy’s export credit agency SACE declined to comment. As countries attempt to balance fighting climate change with their short-term response to the energy crisis, some – including Germany – have suggested new investments in gas fields are needed. Countries are still negotiating the draft statement, which could change before it is published. Italy was the biggest backer of fossil fuels within the group, committing 8.4 billion euros in the period – with downstream oil and gas projects and gas-fuelled power plants among the projects. Italy is also moving to keep a Lukoil-owned refinery in business despite new sanctions against Russia kicking in next month. On September 30 the European Commission approved, under EU State aid rules, a €2 billion Italian scheme for the reinsurance of natural gas and electricity trade credit risk in the context of Russia’s war against Ukraine. A hard right coalition that includes pro-Russian voices just took power in Italy after running a campaign focused on energy costs and inflation.
European export finance alliance pushes for green incentives [eventually!]
(Global Trade Review, London, 24 November 2021) Seven European countries have pledged to promote reforms and encourage green incentives in the export credit sector, but dashed campaigners’ hopes that they would axe public finance for fossil fuels more quickly than the end of 2022 deadline set at the Cop26 conference. The Export Finance for Future (E3F) coalition, initially comprising Denmark, France, Germany, the Netherlands, Spain, Sweden and the UK, held its second virtual meeting today, hosted by the Dutch government. Belgium, Finland and Italy also joined the alliance today, Dutch state secretary for finance Hans Vijlbrief told the summit following the nations’ closed-door talks. A statement expected after the meeting had not been published as of press time, but a draft seen by GTR said the E3F countries would collaborate on strategies to meeting a pledge signed by each at the Cop26 climate change summit to end public finance support for fossil fuels by the end of 2022. The E3F members provided €20bn in export finance for fossil fuel projects overseas between 2018 and 2020, according to data cited by Oil Change International, a campaign group, and ODI, a think-tank. This compares to €17bn for clean energy projects over the same period. Vijlbrief indicated that attendees at the closed-door meeting endorsed support for natural gas beyond the end of the [Cop26] 2022 deadline. “We all know gas will play a role for a couple of years in our energy supply, that’s no secret,” he said. Peder Lundquist, chief executive of EKF, Denmark’s ECA, told the summit that “logically you need some kind of transition”, pointing to natural gas as a “stable” energy source for power grids in less-developed countries that would struggle to handle a rapid shift to renewables. Deputy assistant for export finance at France’s Treasury directorate, Paul Teboul, said his government does not plan to end support for upstream gas projects until 2035.
Finveram warns of 2020 loss due to coronavirus
HELSINKI, July 1 (Reuters, Helsinki, 1 July 2020) Finland’s export credit and financing agency Finnvera warned on Wednesday of a loss for 2020, citing expected credit losses due to the spread of the new coronavirus. “The coronavirus pandemic causes exceptional uncertainty in the outlook,” Finnvera said in a statement. In 2018 and 2019 Finnvera reported an annual operating profit of 100 million euros ($112 million).
Snubbed by EXIM, Cruise Lines Get ECA Relief From Europe
(Bloomberg, Miami, 24 April 2020) After missing out on U.S. emergency aid, Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. are benefiting from a debt-holiday initiative by Germany’s export credit agency, Euler Hermes Aktiengesellschaft. The coronavirus pandemic has hammered the cruise industry, which shuttered operations in mid-March after a series of outbreaks at sea. The companies have been raising money and cutting expenses to weather a period without customers. The biggest companies were left out of the U.S. rescue package because they aren’t incorporated stateside. Most of the cruise industry is incorporated in places where companies can avoid U.S. income taxes and minimum wage requirements. Norwegian said the 12-month debt holiday — which applies to debt used to finance ships — will provide about $386 million in additional liquidity through April 2021. Royal Caribbean said it will add $250 million through debt holiday agreements with Euler. In addition, the national governments of France, Finland, Italy, Norway and Germany have agreed that cruise shipping companies could apply to suspend the repayment of their debts financed by state export credit guarantees for one year.
Quarantined Cruise Liners Pose Hidden Risk to Finnish ECA and Economy
(Bloomberg, Helsinki, 12 February 2020) The damage wrought by the coronavirus on the luxury cruise-liner business may hurt the economy of Finland more than most other countries’. The Finnish government has granted an “exceptionally high” number of export guarantees to cruise lines that have ordered luxury vessels from the Nordic country’s shipyards. So it’s more vulnerable than most to a slump in demand. The bulk of the guarantees involves just one industry and, because they exist outside the government budget, they’re largely excluded when calculating the state’s liabilities. But Finnish taxpayers are ultimately on the hook for as much as 11 billion euros ($12 billion) of credit risk stemming from these guarantees. Finnvera Oyj, the country’s export credit company, has guaranteed loans for Royal Caribbean Cruises Ltd. and Carnival Corp.
Controversy over Chinese subsidies for Huawei
(Zdnet, York PA, 26 December 2019) Huawei Technologies has lashed out at a Wall Street Journal report that suggests the tech giant’s success is fuelled by billions of dollars in financial support from the Chinese government, arguing that its ties are no different from any other “private company” that operates in China. The WSJ article noted that besides subsidies, Huawei since 1998 has received an estimated $16 billion in loans, export credits, and other forms of financing from Chinese banks for itself or its customers. But the WSJ also notes that Huawei’s largest American competitor, Cisco Systems, received $44.5 billion in state and federal subsidies, loans, guarantees, grants and other U.S. assistance since 2000. Further, it notes that Swedish export authorities provided some $10 billion in credit assistance for Sweden’s tech-and-telecom sector as of 2018 and that Finland authorized $30 billion in annual export credit guarantees economywide from 2017. A 2005 study by the UK Secretary of State for Trade and Industry showed that the “opportunity cost” of UK export credits, i.e. government “subsidies”, was around US$271 million per annum. This dispute highlights the well known fact that Chinese and official OECD member export credit agency budgets are subsidies which violate the WTO’s Agreement on Subsidies and Countervailing Measures. The OECD ECA Arrangement creates a WTO loop-hole for OECD ECA subsidies if they meet the OECD’s poorly monitored and largely secretive OECD ECA self-monitoring. The Arrangement is a self-professed “Gentlemen’s Agreement” designed to restrict a race to the bottom in export subsidies, but is flawed by a lack of transparency. So yes, the Chinese subsidize Huawei just as OECD ECAs subsidize their own exporters. The difference is the US claim of internet security concerns wrt Huawei in their efforts to retain economic superiority in global markets. Google and Facebook’s violations of internet privacy and security don’t seem to rate the same US concerns.
KfW IPEX-Bank arranges €2.6bn financing for Dream Cruises newbuilds
(Seatrade Cruise News, Colchester, 16 August 2019) KfW IPEX-Bank is leading a consortium to structure the financing for Genting Hong Kong’s two newbuilds for Dream Cruises at the MV Werften shipyard. The multi-ECA financing package comprises around €2.6bn toward the total cost of €3.1bn for the first two Global-class ships. Their deliveries are now scheduled for early 2021 and early 2022, instead of late 2020. The financing will be backed by export credit guarantees from Germany, the Finnish export credit agency Finnvera and the state of Mecklenburg-Western Pomerania, home to MV Werften. It also benefits from the commercial interest reference rate for ships in accordance with the OECD consensus.
