(International Business Times, 20 December 2013, Washington) Heavy equipment maker Caterpillar Inc., General Electric and Atlas Copco AB, a Swedish industrial holding company, are the latest beneficiaries of credit financing from the U.S. Export-Import Bank. The federal government’s export-promoting agency said Thursday it would extend $694.4 million in loans (backed by the full faith and credit of the U.S. taxpayer should the lending go sour) to Australia’s Roy Hill Holdings. The mining giant controlled by Australian heiress Gina Rinehart is trying to shore up $6.2 billion in capital before the end of the year to fund a massive $8.9 billion iron ore project in Pilbara, a mineral-rich region in the arid western part of the country. The announcement came two days after the Korea Export-Import Bank committed $1 billion to one of the world’s largest financing deals to fund a private project.
ECAWatch Newsletter 12
Russian VTB Bank boosts trade and export finance business
(4traders.com, 31 December 2013, Moscow) VTB Bank arranged deals worth more than US$ 4 billion in 2013 as part of a large-scale project to develop its trade and export finance business, thereby increasing the relevant portfolio by over 150%. The project was advanced by new financial solutions for corporate clients, consistent development of relations with foreign financial institutions, priority development of new products and optimisation of the trade and export finance business process… VTB Bank has been working efficiently to optimise and expand cooperation with several Export Credit Agencies, including the Export Insurance Agency of Russia (EXIAR).
Aman Union Launches Export Credit Database
(Zawya, 10 December 2013, Qatar) During the 4th Annual Meeting of the Aman Union Dr. Abdel Rahman El-Tayeb Taha, the Secretary General of the Aman Union, who is also the Chief Executive Officer of the Islamic Corporation for the insurance of Investment and Export Credit Insurance (ICIEC), and Mr. Abdulaziz Bin Nasser Al-Khalifa, Chief Executive Officer of Qatar Development Bank launched the Aman Union Database… The Database is the first of its kind in the Arab and Islamic region, established for the benefit of national export credit insurance agencies in the region and will enable the Subscribers in the Database to share and purchase credit information reports, credit opinions on entities worldwide and to exchange their underwriting experience on buyers and banks.
Novel structure for Chinese export credit bond
(International Financing Review, 14 December 2013, London) Standard Chartered has come up with a novel way of transferring the risk of lending to unrated Chinese exporters and importers to the capital markets. The bank has brought two structured financings to the international markets in recent months backed by loans to Chinese entities. Each loan benefits from a Chinese export credit agency guarantee… The most logical candidates for these deals are exporters and importers, which would be eligible for guarantees from credit agencies, such as Sinosure and the Export-Import Bank of China.
Oxfam Australia submission to EFIC on Mongolian Copper-Gold Mine project
(Oxfam Australia, Brisbane, 1 November 2012) As EFIC would be aware, the Oyu Tolgoi Copper-Gold mine located in southern Mongolia is a massive project. Oyu Tolgoi is reportedly the largest copper-gold deposit in Mongolia and is one of the world’s largest undeveloped copper-gold deposits. The scale of Oyu Tolgoi means that it’s many impacts – both positive and negative – will be acutely felt by both local communities and across Mongolia more generally. The project has been classified as a Category A project by the International Finance Corporation (IFC) and otherfinanciers.
ECAs and IFIs Financing Human Rights Abuse
(Halifax Initiative, Ottawa, December 2012) A complex range of public and private institutions provide financing for both corporate and state activity that is associated with human rights abuses. These financial institutions present an opportunity for the widespread dissemination and implementation of the UN Framework on Business and Human Rights. Many of these institutions require borrowers to comply with social and environmental requirements as a condition of financing, but none currently has policies in place to ensure respect for the human rights of those people who are affected by the activities that they finance.
Consultation between OECD Export Credit Committees & CSOs
(OECD, Paris, 13 November 2012) The OECD’s Working Party on Export Credits and Credit Guarantees (ECG) and the Participants to the Arrangement on Officially Supported Export Credits held a 1/2 day consultation with CSOs on 13 November. The purpose was two-fold: 1st, to update CSOs on recent developments, such as agreement to a new Sector Understanding on Export Credits for Renewable Energies, Climate Change Mitigation and Water Projects (CCSU) and to a revised Recommendation of the Council on the Common Approaches; and, 2nd, to exchange views on issues of interest to CSOs. CSOs represented were: Amnesty International, the Business and Industry Advisory Committee to the OECD, the Coalition for Employment through Exports Inc. of the United States, the Danish Institute of Human Rights, ECA Watch, the Equator Principles Financial Institutions, the European Banking Federation and the Trade Union Advisory Committee to the OECD.
India’s Government Auditor criticizes ECA ECGC for inadequate controls
(Business Standard, New Delhi, 5 December 2012) Government auditor CAG today pulled up Export Credit Guarantee Corporation for not having proper arrangements with banks to finance exporters resulting in a loss of about Rs 310 crore (US$56.6 million) during the period between 2008-09 and 2010-11. Export Credit Guarantee Corporation of India Ltd (ECGC), which comes under the administrative control of the Commerce Ministry, provides export credit insurance cover to exporters and banks.
Lawsuit targets US Ex-Im LNG fossil fuel project threatening Great Barrier Reef
(Pacific Environment, San Francisco, 13 December 2012) Conservation groups filed a lawsuit today challenging the U.S. Export-Import Bank’s nearly $3 billion in financing for a massive Australian fossil fuel facility in the Great Barrier Reef World Heritage Area. Construction and operation of the liquefied natural gas facility will threaten sea turtles, dugongs and many other protected marine species, as well as the Great Barrier Reef itself.
How ECAs create debts and inflate aid budgets: the example of Sudan
(Eurodad, Brussels, 13 December 2012) Export credit debts constitute the largest component of the external bilateral debt of developing countries. Last year, Eurodad research revealed that almost 80% of poor countries’ debts to European governments come from export credit guarantees, which are in most cases driven by commercial, not development objectives.
