Charged Affairs, Washington, 23 February 2025) The Trump administration’s cuts to USAID and foreign aid programs could reshape U.S. global influence, with a focus on strategic investments over humanitarian assistance. The shift may open opportunities for China to expand its influence, particularly in developing countries like the Cook Islands, where USAID’s withdrawal has led to Chinese funding. However, this move could also impact U.S. competitiveness in global infrastructure projects.
Human Rights
Sinosure reportedly begins refusing to insure exports to Russia
(Kyive Independent, Kyiv, 6 November 2024) Chinese state-owned company Sinosure that insures export supplies against the risk of non-payment has begun to refuse to cooperate with Russian entrepreneurs, Russian newspaper Vedomosti reported on Nov. 5, citing four unnamed sources from importing companies. Trade between Russia and China has reportedly surged by 121% since 2021, underscoring Beijing’s role as Moscow’s economic lifeline. One Chinese supplier told a Russian importer that the company refused to insure their deal because of the nature of the exported goods. Since July, China has tightened export controls on military and dual-use products, the Moscow Times reported. Beijing has positioned itself as neutral in the ongoing war but has deepened economic ties with Russia and become Moscow’s leading source of dual-use goods, feeding the Russian defense industry.
Does Italian ECA stifle Mozambique LNG atrocities?
(Barrons/AFP, Paris, 15 November 2024) French energy giant TotalEnergies, recipient of Italian (& French?) ECA funding, was aware of accusations of abuses committed by soldiers charged with protecting its gas site in Mozambique as early as 2021. “Complaints of extortion, disappearances and even violence leading to the deaths of two fishermen are recorded in quarterly social reports written by teams of Mozambique LNG,” TotalEnergie’s subsidiary in the country, according to Le Monde. The reports were sent to the Italian export credit agency SACE, from which an Italian NGO, ReCommon, and Le Monde obtained them under a right of access to information legislation. TotalEnergies used hired guards of the local affiliate of UK security firm G4S linked to a former liberation figure and ex-minister of security in the 1980s. ECA-Watch noted in 2016 that Korean, French, Italian and Chinese ECAs were set to play a key role in the financing of two LNG projects planned in the north of Mozambique despite widespread concerns about gross human rights violations by local authorities.
NGOs urge banks & China to refuse support for Ugandan oil projects
(Mongabay, Menlo Park, 17 October 2024) A group of 28 NGOs have written to 34 banks, insurance companies and the Chinese government, urging them to deny financing and other support for oil and gas projects in Uganda. The letters, written by U.S.-based Climate Rights International (CRI) and 27 Africa-based NGOs, follow a report detailing numerous human rights violations and environmental harms at the Kingfisher oil project sites in Uganda. Similarly, Uganda’s Tilenga oil fields also face scrutiny over their ecological and social harms, including impacts on wildlife and displacement of local communities. Both Kingfisher and Tilenga are co-owned by French oil and gas giant TotalEnergies, the Chinese National Offshore Oil Company Uganda Ltd. (CNOOC), and the Uganda National Oil Company (UNOC). Both projects are also part of the East African Crude Oil Pipeline initiative (EACOP), where TotalEnergies is a major partner. The initiave aims to transport oil and gas from Uganda to Tanzania for export.
Ukranian ECA insures first investment loan against war risks
(Government of Ukraine, Kiev, 16 September 2024) The Export Credit Agency (ECA) has signed the first war risk insurance contract for an investment loan. This was announced by First Deputy Prime Minister and Minister of Economy of Ukraine Yuliia Svyrydenko during the event “Economic Policy of Ukraine. Recovery During the War” in Kyiv on 16 September.
US EXIM enters the battle against Chinese boycott of Lithuania
(ABC News, Washington, 27 May 2024) After Lithuania allowed Taiwan’s de-facto embassy in Vilnius to bear the name Taiwan, instead of Taipei — Taiwan’s capital city — as preferred by Beijing, Lithuanian businesses saw their cargo shipments to and from China stranded, and they were warned by major European businesses that Lithuanian-made auto parts would be barred from products for the Chinese market. Instead of caving in, Lithuania asked for help and American diplomats sought new markets for Lithuanian goods. The Export-Import Bank in Washington provided Vilnius with $600 million in export credit, and the Pentagon signed a procurement agreement with the country. The U.S. State Department has set up an eight-person team known as “the firm” to provide help to countries cut off from Chinese trade. Other examples: When a Norwegian committee in 2010 awarded the Nobel Peace Prize to a Chinese dissident, Beijing stopped buying salmon from the Nordic country. Two years later, China rejected banana imports from the Philippines over a territorial dispute in the South China Sea. In 2020, Beijing responded to Australia’s call for an investigation into the origin of the COVID-19 pandemic by raising tariffs on Australian barley and wines.
Gaza/Red Sea crisis: Export credit availability called to limit impact on Indian exports
(Business Standard, Delhi, 11 April 2024) The Ministry of Finance has written to the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai) to monitor export credit availability, and insurance premium increases to help Indian exporters deal with trade disruptions in the Red Sea due to Houthi attacks on cargo ships.
ECAs continue to debate fate of Mozambique LNG project
(Global Trade Review, London, 17 April 2024) Financial backers are continuing to assess whether they should reaffirm their support for a multi-billion-dollar LNG project in Mozambique as operator Total looks to restart work. The project was suspended in 2021 after insurgents known as the Islamic State Mozambique attacked Palma, a town in the northern province of Cabo Delgado. Total declared force majeure and withdrew its staff from the nearby Afungi project site. But earlier this year, the French energy major announced its intention to restart the project, meaning its financial partners are also expected to confirm their commitment. A coalition of 124 civil society groups, including BankTrack and Friends of the Earth, have called on financial backers to reconsider their support of the project and urged them to withdraw their funding due to “the continuation of insurgent attacks and the failure of the Mozambican government and TotalEnergies to tackle the drivers of the conflict”. They also cite “ongoing human rights violations” and “irreversible climate and environmental impacts” as reasons to end support. The project is backed by a range of public and private financial institutions, including eight export credit agencies (ECAs) and 15 commercial banks. The ECAs involved are the Export-Import Bank of the United States (US Exim), UK Export Finance (UKEF), the Export-Import Bank of Thailand, Italy’s Sace, Japan’s Nippon Export and Investment Insurance (Nexi), the Export Credit Insurance Corporation of South Africa (ECIC), Atradius DSB of the Netherlands and the African Export-Import Bank (Afreximbank).
EXIM on International Women’s Day 2024
(Talk Business, Arkansas, 7 March 2024) International Women’s Day provides the opportunity to highlight the social, economic, cultural and political achievements of women and to address the diverse challenges women face every day. For the last 25 years, EXIM’s Minority- and Women-Owned Business division has been hard at work educating U.S. small businesses about the financial services available to help their businesses compete globally. In the last dozen or so years, this small, independent government agency that punches above its weight has provided over financing to about 1,000 women-owned businesses exporting to 150 countries. [Women face unique challenges both in the U.S. and globally, yet the entrepreneurial spirit of woman business owners and leaders remain inspiring, writes former Export–Import Bank of the United States (EXIM) CEO Kimberly Reed.]
Total ECA Funders Weigh Mozambique Restart After 3 Year Halt
(Bloomberg, 1 March 2024) Lenders to TotalEnergies SE’s Mozambique liquefied natural gas project are weighing the release of billions of dollars in funding as the company plans to resume construction three years after development was halted by Islamist insurgent attacks. The planned onshore facility designed to export the southern African nation’s major gas discoveries attracted the biggest project financing yet seen in Africa. That was before Islamic State-linked militant attacks near the site in 2021 prompted Total to evacuate its personnel and declare force majeure. The US Export-Import Bank, which committed the biggest share of $4.7 billion in financing — and other lenders that comprise a total of about $15 billion in debt — are conducting assessments on reactivating the funding. The assessment of whether to resume financing coincides with a decision by the Biden administration in January to pause approval of new liquefied natural gas export licenses, in recognition that the climate impact from the fossil fuel needs to be reassessed. The US Eximbank’s loan to the Mozambique project was initially provided in 2020, during the administration of former President Donald Trump. While Russia’s invasion of Ukraine sent Europe on a scramble for alternative energy supplies that boosted interest in upcoming LNG production, projects in nations across Africa are still susceptible to a range of issues including political instability and construction delays. Mozambique has the added obstacle of an insurgency that’s become subdued by armed forces, though the Islamist fighters still carry out sporadic deadly raids. Atradius Dutch State Business, the Amsterdam-based Dutch export-credit agency that’s committed $1 billion to Mozambique LNG, said it’s also assessing the situation. “Due diligence is currently ongoing to assess whether we can allow drawdowns under the loan,” it said.
