(Renewables Now, 13 September 2024) Allied Green Ammonia Pty Ltd has hired Affinity Capital Group as a lead manager and strategic financial adviser to help it raise about USD 6.5 billion (EUR 5.90bn) for the development and construction of a large-scale green hydrogen and ammonia facility in the Northern Territory of Australia. The company is currently in negotiations for preapproval for about 70% of the engineering, procurement and construction contract value from the Spanish Government Export Credit Agency CESCE.
Spain
Cesce backs green loan for Iberdrola renewable expansion
(Global Trade Review, London, 5 August 2024) Spain’s export credit agency Cesce has agreed to cover a €500mn green syndicated loan for Iberdrola, backing its renewable expansion plans globally. The 15-year facility will help fund solar photovoltaic, wind and battery projects in the US, Italy and Australia. The total renewable capacity financed will reach 897MW and is expected to be operational between 2025 and 2026,” Iberdrola says. The facility furthers the Spanish energy company’s goal of diversifying its financing pool and brings its overall volume of export credit agency (ECA)-covered loans to a total of €2.5bn, it says. Last year, Norway’s ECA guaranteed a €500mn loan from Citi for a wind farm off the UK coast.
Spanish ECA supports Siemens Gamesa $1.3 bln guarantee package
(Reuters, Madrid, 15 July 2024) Spanish ECA Cesce has moved to support Siemens Energy’s (ENR1n.DE) wind turbine division, Siemens Gamesa, as part of a 1.2 billion euro ($1.31 billion) guarantee facility. The Spanish state’s backstop will be up to 600 million euros, or 50% of the package to support wind projects, and will be deployed via Cesce. Six banks also support the guarantee facility. Siemens Energy recently announced an overhaul of its struggling wind division, which was affected by major quality issues at its newer onshore wind turbine platforms. Last year the German government agreed to support Siemens Energy with guarantees worth 7.5 billion euros as part of a deal with other stakeholders.
Spain’s CESCE restricts fossil fuel finance, but leaves major gas loopholes
(Price of Oil, Washington, 23 January 2023) Spain has released a new policy for CESCE, the Spanish government export credit agency, restricting public finance for oil and gas. Spain is a major public financier of international fossil fuel projects, providing USD 2.1 billion a year between 2018-20 to fossil fuels, and USD 47 million per year to clean energy, or 97.8% to fossil fuels and just 2.2% to clean energy. Loopholes include support for Liquefied Natural Gas (LNG) processing, transportation and storage, as well as a widely-defined loophole for gas power that could mean gas power plants could be approved in most developing countries. This policy falls short of a major pledge Spain made at the 2021 COP26 UN climate summit to stop financing fossil fuel projects.
Canada and New Zealand map out pledges to axe ECA fossil fuel support
(Global Trade Review, London, 14 December 2022) Canada and New Zealand have mapped out how they will put into action pledges to scrap ECA support for fossil fuel projects, ahead of an end-of-year deadline. At last year’s Cop26 summit in Glasgow, thirty-nine countries vowed to end public finance backing for fossil fuels by the end of 2022, which theoretically bars ECAs and export finance institutions from providing fresh backing for such projects from January 1, 2023. Canada was the second-biggest public financier of fossil fuel projects in the G20 between 2019 and 2021. On the same day, EDC’s fellow ECA New Zealand Export Credit (NZEC) outlined a similar policy to cement its Cop26 commitment, including an end to support for fossil fuel exploration, extraction, transportation, storage and refining, as well as power plants and supporting infrastructure and services. Even for a party which is “in the fossil fuel energy sector” but carrying out an unrelated transaction, “applications may be considered only where that party has a documented and realistic transition plan consistent with a 1.5°C warming limit and the goals of the Paris Agreement [on combating climate change],” the NZEC policy says. The release of NZEC’s policy means there are only five governments that are yet to outline how they will meet their commitments to axing public finance for fossil fuels by the end of this year, according to Oil Change International: Germany, Italy, Portugal, Spain and Switzerland. Of these, Germany, Italy and Spain agreed earlier this year to publicise their plans to wind down ECA support for fossil fuels as part of the Export Finance for Future (E3F) alliance, but so far have not.
Cesce and Alstom sign a strategic agreement to promote green exports
(WebWire, Atlanta, 12 October 2022) Cesce, the Spanish Export Credit Agency, will support France’s Alstom Group’s export activities focused on green projects with a dedicated amount of €500 million. -The agreement seeks to strengthen and consolidate the Spanish railway industrial footprint, in which Alstom is a key player with more than 3,000 employees in Spain and a volume of local purchases close to 700 million euros in the last year. The agreement provides for an overall annual maximum of €500 million and will be reviewed on a yearly basis, depending on the evolution of employment levels, investment and exports of Alstom Group companies in Spain. The agreement’s scope focuses on green operations, in line with Cesce’s climate change policy, the importance of promoting sustainable mobility initiatives and the need to boost digitalisation and sector transformation for a decarbonised future.
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.
Spanish ECA’s US$1.3 billion loan to PetroPeru pushes delayed audit
(Paris Beacon-News, Paris, 5 May 2022) Price Waterhouse Coopers (PWC) will carry out the external audit of the 2021 financial statements of the state company Petroperú in an effort to recover the confidence of creditors, bondholders, banks and risk rating agencies and hopefully allow negotiation of a request for consent from bondholders and the Spanish Export Credit News (CESCE) to reschedule presentation of last year’s financial statements. CESCE granted PetroPeru a loan of US$1,300 million in 2018 for the modernization of the Talara refinery and, a year earlier, Petroperú placed US$2,000 million in bonds in international debt markets to finance the same project, which has started performance tests last April. The recent PetroPeru crisis led debt rating agencies Standard & Poor’s and Fitch to reduce Petroperú’s credit rating due to a lack of financial transparency, exacerbated by the delay in having last year’s financial statements audited. Petroperu was downgraded earlier this month to junk by credit agencies after accounting firm PwC declined to audit the company’s financial statements in the middle of a corporate governance crisis in which Petroperu’s previous CEO Hugo Chavez resigned on amid allegations that he had improperly hired a company to provide him with personal security and people were saying audit firms did not feel comfortable enough to audit Petroperu while Chavez was in charge. On top of this, PetroPeru is demanding compensation of up to $34.5 million from the Spanish oil giant Repsol after freak waves from a volcanic eruption near Tonga caused an oil spill described as the worst ecological disaster to hit Peru in recent history, claiming that Repsol’s Pampilla refinery “apparently” did not have a contingency plan for an oil spill.
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.
CSOs say newly launched export finance coalition (E3F) fails to lead
(Oil Change International, Washington, 15 April 2011) In response to the launch of a new Export Finance for the Future coalition (E3F), 21 civil society organizations (CSOs) from 14 countries released a statement criticizing the lack of ambition from the coalition. The seven European countries, which according to French Finance Minister, Bruno Le Maire represent around 40% of export financing in the OECD, pledged to end formal trade and export financing directed at thermal coal mines and coal supply chain infrastructure. While welcoming the initiative as a step in the right direction, the CSOs, including Oil Change International, state that the coalition fails to take the urgent action that is required to meet climate goals: “Rather than adding new commitments, the E3F principles are simply a reiteration of what most signatories are already doing: not supporting the coal sector, increasing support for ‘green products’, and being more transparent about their support for oil and gas. For this coalition to make a real difference, it needs to take decisive action to end all export finance for fossil fuels, following at least the level of ambition shown by the UK, which put an end to virtually all new export finance for fossil fuels last month.” Seven European countries (Denmark, France, Germany, the Netherlands, Spain, Sweden and the United Kingdom) formally pledged to end their support for agencies that finance export projects Fossil fuels. CSOs note that a few countries are embarrassingly absent from the coalition, including the US and Canada. In January, the White House published an Executive Order stating that it would “promote ending international financing of carbon-intensive fossil fuel-based energy,” including finance provided by US EXIM. And while Canada’s export finance institution, Export Development Canada (EDC), was among the first ECAs to adopt a climate change policy, it remains a top provider of export support for fossil fuels.
