(Vietnam Investment Review, Hanoi, 17 June 2018) On January 26, Power Machines, the EPC contractor of Long Phu 1 thermal power plant, was put on the US Department of Treasury’s extended list of Russian individuals and companies subject to sanctions imposed on Moscow over the Ukraine crisis. The move may delay the construction of Long Phu 1 project by 36 months. After the sanctions were imposed on Power Machines, General Electric announced cancelling the contract of supplying turbines and generators, which are two important segments of the project.
Russia
Uzbekistan and Rosatom to build joint nuclear power plant
(Vestnik Kavkaza, Tashkent?, 4 June 018) Uzbekistan will be the first country in Central Asia to have a nuclear power plant. Rosatom proposes to build a station consisting of two modern VVER-1200 units of 3+ generation. A similar project is being implemented by Rosatom in Bangladesh. It is estimated at about $13 billion, of which $11.3 billion provided by Russia as a state export credit. The cost of the Belarus NPP was $10 billion. The cost of the Uzbek nuclear power plant is unknown yet. Expert Kubat Rakhimov believes that the Uzbek nuclear power plant will be more expensive, since it will be difficult to solve the issue of a cooling system in Navoiy without sufficient quantity of running water and / or large water bodies. Russia is ready to offer Uzbekistan several options for financing the project, including on the terms of a state loan, a scheme of borrowed money from the market, investing its own funds, as well as the BOO scheme (build-own-operate). In addition, the possibility of allocating borrowed funds for the construction of the station from the Russian Export Center is being discussed.
Russia to start shipping ECA funded arms to Armenia
(PanARMENIAN.Net, Yerevan, 29 March 2018) Russia will begin supplying arms to Armenia under a new defense loan agreement worth $100 million in 2018. In June 2015, an agreement was signed to provide Armenia with a Russian state export credit worth $200 million to purchase Russian-made military products. 18 contracts were signed within the framework of the loan, Armenia’s defense ministry reportedly said.
Russian ECA may finance construction of nuclear plant in Uzbekistan
(UzDaily, Tashkent, 20 April 201) Uzbekistan plans to sign an agreement with Russia on construction of a nuclear power plant in 2018. Currently, Rosatom is building a similar station in Bangladesh at a cost estimated at about US$13 billion, of which US$11.3 billion is provided by Russia as a state export credit.
Vietnam’s Long Phu coal plant delayed due to US embargo on Russian Contractor
(Vietnam Investment Review, Hanoi, 17 June 2018) On January 26, Power Machines, the EPC contractor of Long Phu 1 thermal power plant, was put on the US Department of Treasury’s extended list of Russian individuals and companies subject to sanctions imposed on Moscow over the Ukraine crisis. The move may delay the construction of Long Phu 1 project by 36 months. After the sanctions were imposed on Power Machines, General Electric announced cancelling the contract of supplying turbines and generators, which are two important segments of the project.
Aussie defence fund a reminder of ECAs’ murky history with the arms industry
(Global Trade Review, London, 31 January 2018) The Australian export credit agency (ECA), Efic, has been armed with A$3.8bn to help companies sell military equipment overseas. Over the years, ECAs have been heavily criticised for selling arms which often help prop up tyrannical regimes and which can fall into the wrong hands. Indeed, the murky track record of the UK’s ECA was reportedly one of the reasons behind its rebranding from the Export Credits Guarantee Department (ECGD) to UK Export Finance (UKEF). ECGD was found to have funded a succession of arms deals involving despotic regimes including a £49mn loan made to Zimbabwean President Robert Mugabe to buy a fleet of fighter jets and police Land Rovers. Alas, its successor UKEF has continued the trend. It was reported in 2015 to have guaranteed £130mn in financing for repressive governments to spend on arms over the previous years. These include loan guarantees for the Indonesian government to purchase anti-aircraft missiles and a bond guarantee for Saudi Arabia to buy unspecified arms amid Saudi Arabia’s ongoing offensive in Yemen. Over half of UKEF support in the last annual report was for defence… and UKEF is by no means the only ECA involved in funding weaponry. Last year, US Ex-IM was questioned over its funding of dual-use goods which ended up in the militaries of Cameroon, Mexico and Qatar. Last year, the Russian ECA Exiar lent US$100mn to the Armenian government for the purchase of Russian-made munitions and French ECA Coface issued a 50% guarantee on a US$5.9bn loan from a group of French banks to the Egyptian air force to buy 24 multi-role fighter jets built by French company Dassault.
Exporters urging Ottawa and EDC to undo uneven application of Russian sanctions
(Financial Post, Toronto, 11 January 2018) Canadian exporters with long histories of doing business in Russia are urging the federal government to help them compete with foreign rivals that they insist are profiting from Ottawa’s particularly rigid approach to international sanctions. Companies say they’re losing ground because, unlike other countries that have imposed sanctions directed at Moscow, Canada went a step further by removing its export credit agency from the Russian market in 2014. Canadian firms say the vacuum has helped open up new opportunities for competitors from places like the United States, Europe and Japan, where export credit agencies continue to support local businesses with interests in Russia, despite similar sanctions by their governments.
Turkey to Acquire Four Russian S-400 Missile Divisions with ECA support
(Prensa Latina, Moscow, 28 December 2017) Turkey will acquire, for 2.5 billion dollars, four divisions of the modern Russian S-400 surface-to-air missile divisions, which will be delivered in 2020. The finance ministries of Turkey and Russia have concluded negotiations for the granting of an export credit to Ankara, Chemezov head of the Russian state conglomerate Rostec said. Turkey will pay an advance equivalent to 45% of the total and the Russian side will grant an export credit that will cover the other 55% of the contract. Ankara [a NATO member] received strong criticism and even threats from the United States for its decision to acquire the Russian arms. In other Russian ECA news, four Iranian banks have signed an “unlimited finance deal” with the Eximbank of Russia for public and private sector approved projects using Russian technical and engineering services.
French ECA BPI joins other ECAs in support of controversial Yamal LNG arctic project
(ECA Watch, Ottawa, 30 October 2017) French ECA BPI has announced a €350 million guarantee contract with TechnipFMC for the development of the controversial $27 billion Yamal LNG project in Russia’s far north. German Japanese, Swedish, Italian and Chinese ECAs have also supported the project. Experts from the Rivers Without Borders Coalition, after studying the Environmental and social impact assessment (ESIA), which was conducted in accordance with Russian law, concluded that the current ESIA does not provide sufficient information, analysis or a comprehensive management plan for addressing the project’s significant impacts on biodiversity, fishing, indigenous peoples, and accidents, a conclusion also reached by WWW Russia in 2015. It is interesting to note that Arnaud Caudoux, Deputy Chief Executive Officer of Bpifrance, is also a member of the Board of TechnipFMC. TechnipFMC hs also requested BPI support for its participation in the $7 billion Coral LNG project in Mozambique.
Armenia to receive $100-million military export credit loan from Russia
(ARKA, Yerevan, 12 October 2017) At its regular Thursday meeting, the Armenian government okayed a proposal to sign a $100-million loan agreement with Russia to purchase defense armaments. In accordance with the agreement, Russia will provide an export credit loan to Armenia for financing supplies of Russia-made ammunition for Armenia’s army. The loan will be extended for 15 years (from 2023 to 2037) at a 3% annual interest rate, and Armenia has to use these financial resources at a period between 2018 and 2022. In June 2015, Armenia signed a $200-million an export credit loan agreement with Russia for acquiring Russia-made military industry products. The loan was provided for 13 years with a three-year grace period at a 3% annual interest rate. Under this agreement, Armenia buys from Russia Smerch multiple rocket launchers, Igla surface-to-air missile, TOS-1 A multiple rocket launchers, Tigr armored vehicles and 9М113М wire-guided anti-tank missiles as well as sniper riffles, engineering and communications devices.
