(SLD Info, Paris, 16 February 2023) France took a financial hit of €409 million ($440 million) as a result of its 2015 cancellation of the sale of two helicopter carriers to Russia, the national audit office said in its report on French arms exports. “In total, taking into account the result of negotiations with Russia, cancellation of payments, payments to Naval Group, modifications and the sale of the ships to Egypt, this transaction cost France €409 million,” the independent office said in its report, Support for Export of Military Matériel. The then French president, François Hollande, cancelled in August 2015 a controversial sale of the Mistral class warships, under pressure from the U.S., central European and Baltic nations, after Russia seized in 2014 the Crimean peninsula from Ukraine. France paid Russia total reimbursement of €949.75 million for cancelling the order for the Mistrals, comprising a core payment of €892.9 million, and a further €56.8 million, the Sept. 15 2015 National Assembly report said. Egypt’s purchase of the two Mistrals followed Cairo’s 2015 order for French weapons worth €5.2 billion for 24 Rafale fighter jets, a FREMM multimission frigate, and air-to-air and naval missiles. Coface consistently made money between 2010-2021, with premiums exceeding claims, the report said, with only 2015 showing a net loss of €82 million due to the claims made on cancellation of the Mistral deal with Russia. The sale to Egypt limited the amount of claim, the report said.
Russia
Comparing Government Financing of Reactor Exports
(Columbia University, New York, 25 August 2022) This report, part of wider work on nuclear energy at Columbia University’s Center on Global Energy Policy, compares the financing terms offered between 2000 and 2021 by the world’s major exporters of nuclear power plants: Russia, France, the Republic of Korea (ROK), China, and the United States. Decarbonizing the world’s energy supply by 2050 will require financing low-carbon energy projects at a cost of upwards of trillions of dollars. Nuclear energy is one of the few dispatchable low-carbon energy resources, and studies by the International Energy Agency have estimated a possible doubling of nuclear power as part of scenarios for achieving net-zero greenhouse gas emissions by midcentury. Large, capital-intensive projects such as nuclear power plants can be challenging for some countries to finance, however. As a result, countries wishing to build nuclear reactors look for attractive financing from supplier nations in the form of loans and equity.
Russia may start providing ECA finance to importers of its grain
(Reuters, Moscow, 3 October 2022) Russia may start providing trade finance to importers of its grain as sanctions imposed on Moscow since it sent troops to Ukraine affect this financial instrument, Agriculture Minister Dmitry Patrushev said. Russia, the world’s largest wheat exporter, is working with Russia’s Eximbank and the Russian agency for export credit and investment insurance “to provide financing to foreign companies for the purchase of our products”, Patrushev told the RBC business daily. Speaking about farmers being among those drafted into the military in Russia’s partial mobilisation at a busy time in the sowing season, Patrushev said his ministry would make efforts to ensure the smooth running of the farming industry.
India has $5 bn new export opportunity in Russia
(Fortune India, Gurugram, 15 September 2022) With Europe maintaining trade sanctions on Russia, India has the potential to export $5 billion worth of goods to Russia in the next 12 months, A Shakhtivel, President, Federation of Indian Export Organisations (FIEO) has said. The export demand is high and supplies can start as soon as the rupee payment mechanism gets operationalised, he added. Russia now accounts for 18% of India’s crude imports; up from 1% The ongoing Russia-Ukraine conflict may open up a $22.5 billion worth export opportunity across 83 commodities for India, says an analysis carried out by MVIRDC World Trade Centre, Mumbai.
Iranian & Russian ECAs ink agreement to facilitate trade
(Tehran Times, Tehran, 10 September 2022) The Export Guarantee Fund of Iran (EGFI) has signed an agreement with the Russian Agency for Export Credit and Investment Insurance (EXIAR) with the aim of facilitating exports and providing the necessary guarantees for the development of trade between the two countries. According to Peyman-Pak of Iran’s Trade Promotion Organization,, the agreement is signed with the aim of helping the traders of the two countries to use export insurance as an alternative to letters of credit (LC) and to reduce the risk of trade between the two countries. Emphasizing that the agreement has no credit limit and the signatories can issue guarantees up to one billion dollars, Peyman-Pak said: “This achievement has been made in line with the efforts of Trade Promotion Organization and Export Guarantee Fund of Iran to facilitate trade between the two countries of Iran and Russia.” It is not know if this agreement could include cover for Iran’s alledged sale of military drones to Russia.
Iran expected to ink agreement with Russian ECA soon
(Tehran Times, Tehran, 26 August 2022) The Head of Iran’s Trade Promotion Organization (TPO) has urged Russia to take the necessary measures for signing an agreement between Export Guarantee Fund of Iran and the Russian Agency for Export Credit and Investment Insurance (EXIAR) in the coming weeks. He also announced Iran’s readiness to establish banking relations with Eximbank of Russia and emphasized that Iran is ready to use all the banking capacities of the two countries in order to facilitate the financial transactions between the two sides in a meeting with Director-General of Russian Export Center Veronika Nikishina in Moscow. Nikishina for her part welcomed the Iranian side’s proposals, saying: “We gladly join the actions and decisions that are being made because we want to create acceptable conditions for expanding business in a competitive financial environment.” Meanwhile, the Washington Post reported on August 29 that Russian cargo planes quietly picked up the first of scores of Iranian-made combat drones for use against Ukraine, in a move that underscores deepening ties between Moscow and Tehran while also highlighting Russia’s struggles to supply its overstretched military. The Financial Tribune of Iran reported on August 30 that a 125-strong business delegation from Russia made up of representatives of 78 companies are scheduled to visit Tehran from Sept. 19-21 to meet their Iranian counterparts and survey ways of expanding bilateral cooperation.
Japanese Civil Society welcomes halt of Bangladesh & Indonesian coal projects and Russian LNG project
(JACSES, Tokyo, 22 June 2022) It has been reported that the Ministry of Foreign Affairs announced to halt Official Development Assistance (ODA) to the Matarbari 2 in Bangladesh and the Indramayu coal-fired power project in Indonesia. Both projects have been strongly criticized internationally with repeated calls for the suspension of support, as they not only exacerbate the climate crisis, but also have a huge impact on the livelihoods of local people. However, in Bangladesh, construction of the Matarbari 1 coal-fired projects which has already been supported by Japan International Cooperation Agency (JICA), has caused unemployment of many local people who made their livelihoods by salt pans and farming shrimp. And delays in compensation payments and alternative housing have made their lives more difficult. There has also been unauthorized reclamation of riverbed due to dumping sediments which was associated with the construction of an access road. These sites and structures were also planned to be used in Matarbari 2. As noted Japan is one of the world’s largest financiers of oil, gas and coal. In addition Japanese ECA JBIC has suspended funding for Russian gas producer Novatek’s major Arctic LNG project, adding yet further strain to a development that has been hard hit by western sanctions.
EU Export Credit Sanctions on Russia
On 3 June 2022 the EU adopted its sixth package of sanctions against Russia and Belarus. These prohibit the purchase, import or transfer of crude oil and certain petroleum products from Russia into the EU, as well as insuring and financing the transport, in particular through maritime routes, of Russian oil to third countries. Prohibitions include import or export advances and all types of insurance and reinsurance, including export credit insurance.
70% of Indian exporters’ payments stuck in Russia have come in
(Live Mint, India, 5 May 2022) As much as 70–80% of the payments for goods that were shipped to Russia before the Ukraine war have been coming in, a government official privy to the matter told Mint, comforting exporters. Exporters had claimed that about $500 million in payments were stuck after the war began in February. Stuck dues had become a pain point for Indian exporters, especially after Russia was cut off from the SWIFT payment gateway. In FY21 India’s exports to Russia stood at $2.6 billion, while imports were $5.5 billion. A number of exporters told Mint that those shipping goods to Russia were not being uniformly given insurance cover, which is provided by the state-owned Export Credit Guarantee Corporation, compounding their problems.
Aeroflot negotiating purchase of 8 ECA financed Airbus aircraft
(AssumeTech, Iceland, 21 April 2022) Aeroflot is considering the purchase of 8 chartered Airbus SE aircraft after the European Union provided a mechanism for lenders to dispose of some seized aircraft in Russia after the invasion of Ukraine, TASS reported. The planes operate under so-called finance leases, which the European Union created a penalty waiver this month by allowing payments from agreements signed before February 26. Financial leases refer in to new Airbus and Boeing aircraft, with export credit agencies guaranteeing approximately 85% of the amount lent to an airline by a banking association. Most of the approximately 500 foreign-owned aircraft blocked in Russia operate under operating leases in which airlines lease planes for a specified period and can return them to the owner after the contract has expired. Russia passed a law banning foreign-owned planes from leaving without state permission after the Ukrainian invasion imposed penalties on lessors for canceling contracts and trying to return their planes.
