(The Independent, Kampala, 8 July 2019) Russia hosted the Annual General Meeting for the African Export Import Bank (Afreximbank) on June 20-22, the second AGM to be held out of Africa since 2012 in China. The Russian Export Center (REC), purchased shares in Afreximbank in 2017 at an undisclosed amount, becoming the bank’s third-largest non-African financial institution. As Russia’s President, Vladimir Putin, hosts more than 50 African presidents for the first-ever Russia-Africa Summit in Sochi on Oct. 24, top on the agenda will be how to sustain the economic and political ties between the two trading blocs in the wake of declining oil prices and increasing isolation of the transcontinental nation. Whereas Russia’s presence in Africa had weakened in the 1990s, the country had since then done a great deal of groundwork on joint projects in geology and mining, energy, industry, agriculture, fishing and telecommunications, with total investments now standing at US$20bn. Russia’s economy has been on a standstill for a while, with statistics showing that from 2014 to 2018, its GDP grew at an average of 0.4% per annum, with real disposable incomes declining by 10.7% leaving 19 million of the 145 million Russian population in poverty during the same period. On the other hand, Africa’s GDP has been growing at an average of more than 3%, making it one of the fastest growing regions in the world. Moscow, which had a strong influence in Africa alongside US and China, had frozen its relations with the continent following the collapse of the USSR in 1991. It however remains to be seen how far Russia’s reconnection with the continent will go given that China, India, and especially the United States have intensified their involvement in Africa over the last three decades. Russia’s export values to Africa have nearly doubled over the last five years from US$9.3bn in 2014 to US$17.5bn in 2018 while Russian imports from Africa have stagnated, increasing from merely US$2.8bn to US$2.9bn during the same period. Most of Russia’s exports to Africa are medicine, food, forestry products, automotive and mixed fertilizer. Since 2015, according to the Swedish Defence Research Agency, Russia has signed over 20 bilateral military cooperation agreements with African states including; Rwanda, Tanzania, Burkina Faso, Burundi, Guinea. Between 2012 and 2016, Russia had become the largest supplier of arms to Africa, accounting for 35% of arms exports to the region, followed by China (17 %), the United States (9.6%), and France (6.9 %). Some of Russia’s companies that have made inroads in Africa include; Gazprom, Lukoil, Rostec and Rosatom, with most of their operations in Uganda, Algeria, Angola, Egypt and Nigeria. Egypt has also finalised negotiations with Moscow to build the country’s first nuclear plant, while in Namibia, Moscow is developing one of the world’s largest deposits of platinum group metals.
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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.
German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk
(Reuters, Frankfurt, 8 February 2019) German banks are seeking to blunt any fresh U.S. sanctions against Russia so they can continue existing business with Russian clients, according to an internal briefing paper prepared by a financial industry lobby group. The risk of new restrictions on doing business with Russia has risen since the Democratic Party won control of the U.S. House of Representatives. New anti-Moscow measures could jeopardise funding for a 9.5 billion euro gas pipeline which seeks to channel gas from Russia directly to Germany under the Baltic Sea. “Nord Stream is the elephant in the room,” said one person with direct knowledge of the matter. Russian news agency TASS quoted Nord Stream 2’s finance chief Paul Corcoran saying it was in discussions with export credit agencies and wanted to raise around 6 billion euros. Last month, the U.S. Ambassador to Germany sent a letter to companies involved in Nord Stream warning that they could face sanctions if they stick with it.
Nord Stream 2 negotiating ECA loans worth 6 bln euros
(TASS, Vienna, 29 January 2019) Nord Stream 2 AG, the operator of the Nord Stream 2 gas pipeline construction project, is conducting negotiations to attract project financing worth 6 bln euros. Chief Financial Officer Paul Corcoran told reporters “We are still in discussions with export credit agencies.” The Nord Stream 2 pipeline is expected to come into service at the end of 2019. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. It will go through the exclusive economic zones and territorial waters of five countries – Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5 bln cubic meters. The total cost of the project has been estimated at 9.5 bln euro. Nord Stream 2 AG, with Gazprom being the only shareholder, is the operator of the Nord Stream 2 pipeline construction project. Gazprom’s European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and Royal Dutch Shell.
Indonesia looks to ECA funding for aerial refuelling tanker-transports
(Jane’s Defence Weekly, Singapore, 25 January 2019) The Indonesian Air Force (TNI-AU) has completed a study on the country’s aerial refuelling requirements and has proposed the acquisition of two new airframes for the service, outlining a budget requirement of about USD500 million, proposing that the funds be drawn down from foreign defence export credit loans. Jane’s first reported in January 2018 that the TNI-AU had begun a preliminary study to compare the A330 multirole tanker-transport (MRTT) from Airbus and the KC-46A Pegasus from Boeing. Russia’s four-engine Ilyushin Il-78 was also later included in the study.
Russian ECA financed weapons in Armenia risk escalation of hostilities
(VESTNIK, Moscow, 13 August 2018) Arms supplies on credit are a usual practice. Almost all countries involved in the sphere of military-technical cooperation practice it. The reasons for this may be different, but usually they are of purely political nature: this is the way a country that provides a state export credit for the purchase of weapons produced in the same country indicates that the recipient country is considered as if not an ally, then a very close partner, friend, the Independent Military Review writes. That’s who the Republic of Armenia (RA) was for Russia for a long time. Yerevan received both political and military support (including the Russian military base) and economic preferences from Moscow. The Kremlin’s position on Nagorno-Karabakh was also quite clear. That is why no one was surprised when in 2015 the Russian Federation agreed to provide the RA with a $200 million loan to buy weapons. Last month, deliveries under this loan agreement, which entered into force in February 2016, were completed. In recent years, the balance of forces in the South Caucasus has been violated because of the growing military power of Azerbaijan, which threatened the resumption of the conflict in Nagorno-Karabakh. Arms supplies from Russia will help to slow down the escalation of the conflict, bringing the military advantage of one of the parties to an approximate equality. But not everyone is happy to see the military-technical cooperation of Moscow and Yerevan. According to a Worldwide Threats Assessment report of the director of US National Intelligence Daniel Coats, “both sides’ reluctance to compromise, mounting domestic pressures, Azerbaijan’s steady military modernization, and Armenia’s acquisition of new Russian equipment sustain the risk of large-scale hostilities in 2018.”
France’s CIFAL ready to help Uzbekistan develop nuclear energy
(Trend News Agency, Baku, 24 August 2018) French CIFAL company is ready to help Uzbekistan in the development of nuclear energy noting they are ready to provide their technological solutions and share experience to train specialists of Uzbekistan in the field of nuclear energy. CIFAL plans to support the Uzbekistan’s Agency for the Development of Nuclear Energy “Uzatom” in the implementation of technical, commercial and financial negotiations with the Russian State Atomic Energy Corporation “Rosatom” and also take part in the solution of issues of financing of the project in coordination with the Uzbek and Russian sides. The Russian side proposes to build in Uzbekistan a station consisting of two modern blocks of pressurized-water reactors VVER-1200 of “3+” generation. The project for the construction of a similar station, which Rosatom is building in Bangladesh, is estimated at about $13 billion, of which $11.3 billion are provided by Russia as an officially supported export credit.
Russian ECA Financed Bangladesh Reactor is Safe Against Natural Disasters
(Sputnik International, Moscow, 13 July 2018) The construction work on the second unit of the Rooppur Nuclear Power Plant (RNPP), which is the first ever nuclear power plant for Bangladesh, is scheduled to be launched next Saturday. On July 8, the Bangladesh Atomic Energy Regulatory Authority (BAERA), issued a license to Bangladesh Atomic Energy Commission (BAEC) for the design and construction of RNPP Unit 2. The project will cost around $13 billion, of which Russia provides a state export credit of up to $11.38 billion and the rest is financed by the government of Bangladesh. “In RNPP we will have the ‘Generation 3+’ technology, developed from the experience of Japan’s Fukushima disaster, which will ensure more safety and security in case of tsunami, cyclone and other similar type of disasters,” Dr. Shaheed Hossain, consultant of RNPP Project told Sputnik.
World powers back Iran oil exports despite US sanctions threats
(AFP, Vienna, 6 July 2018) Iran’s remaining partners in the 2015 nuclear deal vowed Friday to keep the energy exporter plugged into the global economy despite the US withdrawal and sanctions threat. Britain, France and Germany along with Russia and China met with Iran in Vienna to offer economic benefits and assurances that would lessen the blow of sweeping US sanctions announced by Trump. Although there were no concrete pledges or deadlines, they vowed efforts to keep open financial channels with Iran, promote export credit cover and maintain open air, sea and overland transport links.
Gazprom signs $1.2bn Bolivia deal
(Energy Reporters, Istanbul, 20 June 2018) Russian state-run gas monopoly Gazprom has committed to invest US$1.2 billion in exploration and production at the Vitiacua onshore field in southern Bolivia. “This contract will mean an investment by Gazprom of US$1.2 billion, the drilling of two exploratory wells, six development wells, adding a total of eight wells, with a maximum production of 400 million cubic feet in coming years,” Bolivia’s state-owned oil and gas company YPFB chief executive Oscar Barriga said. The Viticua block in the Chaco oil and gas basin has potential reserves of 2.17 trillion cubic feet, Barriga told the media. The Russian agency for export credit and investment insurance, Exiar, and Bolivia’s energy ministry signed a deal to secure financing for supplies of gas-fuelled machinery and equipment produced in Russia. Around 20,000 Russian public transport vehicles will be shipped to Bolivia as part of the Bolivian government’s efforts to boost natural gas as a transport fuel instead of oil.
