(Zawaya, Dubai, 25 February 2025) Italy’s export credit agency, SACE, has committed $350 million in financial and insurance support to UAE companies AMEA Power and Metito Utilities. The funds will support renewable energy, water infrastructure, and sustainability projects in Africa. This initiative aligns with Italy’s Mattei Plan for Africa and aims to boost Italian exports in the region.
Renewable Energy
ECA’s green export finance bypasses developing nations
(Argus Media, Berlin, 29 January 2025) Export credit agencies’ green financing largely favors wealthy countries, leaving developing nations behind in the global energy transition. Critics call for more inclusive support to help emerging economies adopt sustainable infrastructure.
Africa Investment Forum Market Days 2024: Global Risk leaders gather to unlock Africa’s investment potential
(Africa Development Bank, Abidjan, 4 December 2024) The African Development Bank Group hosted a high-profile meeting of global insurers, export credit agencies and institutional investors to explore innovative risk-sharing solutions on the sidelines of the Africa Investment Forum Market Days 2024. The Insurer and ECA Day on December 3 reinforced the Bank’s commitment to bringing large scale finance into Africa. Participants included representatives of the Berne Union, Axa, Marsh, Allianz, Chubb, Trade and Development Bank, LGIM, Sinosure, JBIC and ICIEC, among others. Presentations highlighted the urgent need to close Africa’s infrastructure investment gap, noting that private investors currently account for just 10% of infrastructure financing on the continent – less than half the level in Asia, with Africa needing $1.3 trillion annually to achieve its SDG targets by 2030.
COP29 outcomes: balancing progress and challenges on the road to climate action
(UN Environment Program, Baku, 4 December 2024) COP29 held in Baku, Azerbaijan, offered an important opportunity for governments and other global stakeholders to put in place the mechanisms, tools and signals required for countries to continue implementing their contributions to the Paris Agreement as urgently needed. The main areas of negotiation were on:
- the design & key elements of future climate financial architecture & the next collective quantified goal (NCQG) on climate finance;
- the rulebook for future international, compliance carbon markets; and
- countries’ collective signaling on mitigation ambition, as follow up to the various energy transition objectives captured in last year’s COP28 ’UAE Consensus’.
As widely reported elsewhere, while opportunities were missed to create the required clarity and determination on finance and ambition, there was some good news, even a breakthrough, on the establishment of government-backed, international carbon markets of the future. This summary highlights the recent, impressive achievements of the UNEP FI-convened net-zero groups, progress on financing climate adaptation, and the implications for financial institutions of some of the summit’s outcomes.
ICIEC Awarded “Insurance Adviser of the Year – Africa” for Advancing Sustainable Development
(Africa.com, Johannesburg, 1 December 2024) The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) (https://ICIEC.IsDB.org), a Shariah-based multilateral insurer and member of the Islamic Development Bank (IsDB) Group, is proud to announce its recognition as the “Insurance Adviser of the Year – Africa” at the prestigious IJInvestor Awards 2024. This honor highlights ICIEC’s role in advancing impactful initiatives that drive sustainable development and improve lives across Africa. The award acknowledges ICIEC’s pivotal contributions to two transformative projects in Côte d’Ivoire (€194 million in insurance support for financing ESG projects) and Senegal (€103 million insurance agreement for 50,000 off-grid solar streetlamps in rural areas). ICIEC has also entered into a Service Agreement with the Islamic International Trade Finance Corporation (ITFC), Jef Vincent, and ActorX GmbH to create a three-year business plan for the proposed Africa-Arab Guarantee Fund (AAGF) a collaboration designed to strengthen trade and investment ties between the Arab and African regions, fostering economic integration and mutual growth.
South Korea and Turkey block landmark OECD deal to end fossil fuel subsidies
(Oil Change Int’l, Washington, 20 December 2024) OECD members have failed to pass a landmark deal to end over $40 billion in public subsidies to fossil fuels. Despite last-ditch attempts by senior government and international figures to sway South Korea and Turkey – the only countries blocking the deal – negotiators could not agree on a proposal to restrict export finance to fossil fuels. They will instead focus on a range of measures to improve transparency in export financing. Last year the UK, Canada and EU tabled a proposal at the OECD to end export finance for all fossil fuels, building on a 2021 OECD agreement that ended export finance support for coal plants. In a surprise move, the US recently switched its position at COP29 and came out in support of the proposal, leaving just a handful of countries blocking it.
The International Institute for Sustainable Development (IISD) on December 9th noted: “We have seen the potential of multilateral leadership in export finance before. In 2021, the OECD ended coal-fired power export credit financing, a key milestone in the phase-out of international public finance for coal. Now OECD countries have [had!] the opportunity to replicate this success for oil and gas. This could [have] freed up much-needed public finance to accelerate the uptake of clean energy. Rich countries still provide export credit finance of USD 41 billion per year to oil and gas, following their earlier agreement to end export credit support for coal.
President Joe Biden was poised to back restrictions on international funding for oil and gas projects in a move that could free up billions of dollars for clean energy and crystallize his climate legacy.
Colombia Races for US Climate Funds But Has China as Back Up
(BNN Bloomberg, Toronto, 19 November 2024) Colombia is hurrying to land a deal with the US that would unlock the first tranches of cash for a $40 billion climate investment plan before Donald Trump takes office. If that push fails, then China could be an option. Susana Muhamad, Colombia’s climate minister, said she would go to Washington in the coming weeks to try and secure initial finance for an ambitious strategy to overhaul her country’s fossil fuel-based economy in favor of green investments. The outlook for the deal is now more complicated that Trump won this month’s election, she said. It’s a race against time for the package, which mimics the Just Energy Transition Partnerships (JETPs) that have been signed between rich and developing countries, with a goal of speeding up the move away from fossil fuels. Colombia is looking for as much as $10 billion to come from international financial institutions and developed countries. The move may set a template for other countries looking to transition away from fossil fuels. Colombia is just one of the countries currently scrambling to lock in climate commitments from the US in the two months before Trump takes office. At the Organization for Economic Co-operation and Development, the Biden administration is making a last-ditch push for an international agreement restricting export-credit agency financing of foreign oil and gas projects, supporting an initial proposal made by the European Union.
‘The finance Cop’ delivers a fragile climate pledge, but leaves questions unanswered
(Global Trade Review, London, 27 November 2024) The two-week-long UN Climate Change Conference (Cop29) ended last week with a contentious pledge by wealthy countries to increase climate finance. While the commitment was criticised by developing nations as insufficient, objections from some of the world’s richest nations meant there was nearly no agreement at all. The landmark pledge of Cop29, nicknamed “the finance Cop” due to its supposed focus on funding the green transition, was an increase of climate finance from the wealthiest countries to the poorest from US$100bn to US$300bn a year by 2035. While this is a clear upgrade – and higher than the originally proposed US$250bn – it is far less than the US$1.3tn that developing countries had sought. It is also unlikely to be enough to mitigate the effects of climate change, with NGO WaterAid’s lead policy analyst for water, sanitation and hygiene finance, Lesley Pories, calling it a “death sentence for the millions on the climate frontlines”. Though the official text of the resolution calls for financing from “all public and private sources” to reach US$1.3tn a year by 2035, it is unclear in practice how this will materialise.
U.S. Misses the Mark on ECA Fossil Fuel Finance Agreement
(Friends of the Earth, Washington, 21 November 2024) Today at the conclusion of the OECD Export Credit Group negotiations, participating nations failed to reach an agreement on fossil fuel finance, despite scientists’ repeated calls for urgent climate action. While no formal conclusion has been announced from the talks, the United States appears to have failed to secure an agreement. The proposal has already been championed by the European Union, UK, Canada, Norway and most recently, Australia. It would have potentially restricted financing for the entire fossil fuel value chain. Up to $40 billion per year could be shifted away from fossil fuels to renewable energy projects. This would have paved the way for the agreement to be presented as part of a climate finance package at COP29. Unlike the Paris Agreement, it would have been difficult for the Trump Administration to remove itself from just one piece of the arrangement.
Oxfam calls for a green overhaul of the US Export-Import Bank
(Hacker News, Mountain View CA, 17 October 2024) As mounting climate concerns cause extreme weather events, & global efforts intensify to keep warming below 1.5°C, Oxfam calls on the Export-Import Bank of the United States (EXIM) to cease funding fossil fuel projects to instead champion just & clean energy initiatives. In a new research report published today, “Alignment of the United States Export-Import Bank with the US climate & development policy objectives,” Oxfam America & Perspectives Climate Research found that EXIM has financed hundreds of fossil fuel projects globally since its founding & continues to finance the most climate damaging sectors: at least 60% of its current $40+ billion portfolio directly supports fossil fuel-producing or dependent sectors like oil, gas, & aviation. Despite a requirement in its charter to devote 5% of its funding to renewable energy, energy efficiency, & storage, in 2021, only $72 million – or 1.25% of EXIM’s new authorizations – were considered environmentally beneficial, & only 0.2% were for renewable energies.
