(Trade World News, Dubai, 12 December 2024) Algeria is positioning itself as a major force in trade insurance across Africa and the Arab-Muslim world, reflecting its commitment to fostering fair and dynamic international trade. Algeria’s ambitions align with its broader strategy to diversify exports beyond hydrocarbons. The Finance Minister underscored that Algeria views fair international trade as a strategic pillar for economic growth and an essential mechanism for achieving the Sustainable Development Goals (SDGs) by 2030. Meanwhile, a December 11-12 French summit conference on the future of economic relations between France and Arabic countries was jointly organized by the Arab-French Chamber of Commerce, the Union of Arab Chambers and the Federation of Small and Medium Enterprises (CPME), with the support of CCI France, the International Chamber of Commerce – France, Medef International, and Business France.
(Business Times, Colombo, 15 December 2024) The new management of the Sri Lanka Export Credit Insurance Corporation (SLECIC), while celebrating its 46th anniversary, has an onerous task ahead of reforming an institution that has been marred by corruption and malpractice for the past 12 years. A forensic audit, initiated at the instance of the Parliamentary Committee on Public Enterprises (COPE) in the previous Parliament is afoot to investigate the alleged financial mismanagement of the state-run corporation. An investigation is underway into the controversial payment of an insurance claim of over Rs. 400 million to a single exporter, which had been made in a manner contrary to standard procedures. The Treasury has conducted two additional inquiries, clearing some officers accused of assisting the General Manager in carrying out corrupt practices. However, COPE intervened, ensuring the General Manager’s compulsory leave and the forensic audit.
(Politico, Brussels, 11 December 2023) Britain will hand over two Royal Navy minehunter ships to Ukraine as the war-torn country grapples with a continued blockage of the Black Sea by Russia. U.K. Defense Secretary Grant Shapps will on Monday announce Ukraine’s armed forces have “procured” the Sandown Class vessels from Britain’s Royal Navy, although the details of the transfer are still being arranged through U.K. Export Finance, London’s export credit agency. The move is part of a new Maritime Capability Coalition, set up with Norway, to help bolster Ukraine’s maritime training, equipment and infrastructure. Norwegian Defense Minister Bjørn Arild Gram will be in London on Monday to launch the initiative. The new coalition wants to help Ukraine transform its navy to make it “more compatible with Western allies, more interoperable with NATO, and bolstering security in the Black Sea,” the Defense Ministry said.
(LNG Prime, Sarajevo, 15 December 2023) Geneva-based trader Gunvor has clos
ed a 400 million euro ($437 million) loan, backed by the Italy’s SACE, to secure supplies of natural gas and LNG for Italian industry. The five-year term loan is guaranteed by SACE, the Italian export credit agency controlled by the country’s economy and finance ministry. Gunvor said in a statement that UniCredit acted as a global coordinator. The goal of the facility is to support Italian industry by securing natural gas and LNG supplies while promoting the export of Italy’s goods and services, the trader said.
(TFX News, London, 22 December 2023) ECAs have looked to adapt their support for buyers and exporters in a high interest rate environment, revisiting and revamping older policies. The success of this evolution can be seen in the data – export finance is set for a record-breaking year. Greater flexibility brings diversification in financing instruments – the rise of untied support schemes for large corporates has continued with major new deals involving Trafigura, Siemens Energy and Gunvor. This has also given ECAs a prominent new geopolitical role. Realpolitik has driven ECAs into the world of energy security and they must now be more proactive than ever in their support for national interest. Reforms to the OECD Arrangement on Officially Supported Export Credits arrived after years of negotiation and debate. While the impact of these changes will only be truly felt over the coming year, the market has reacted with optimism. Tenors for large-scale renewables projects have been pushed out to up to 22 years while most other projects can now go up to 15 years. The premium rate curve has also been adjusted for obligors with high credit risk ratings. These changes increase the affordability of the ECA product at a time of economic turmoil. However, questions remain: how will ECAs balance their portfolios as longer maturities become the norm? Should the Arrangement set a common position on support for fossil fuel projects? Can ECAs plug the funding gap as critical minerals make headlines? The phrase ‘critical mineral’ has now become standard parlance as countries look to secure the green energy transition with a steady supply of metal. However, the mining industry continues to suffer from a chronic lack of investment. ECA financing is increasingly available for projects that are deemed significant for national security. Over the course of 2023 ECAs supported several project financings including the Kathleen Valley lithium deal and the Hybar rebar steel mill facility. Expect to see this deal flow rise over 2024 if ECAs can make good on their expressions of interest. Talks are under way for three new mines led by Cerrado Gold, while BNP Paribas will lead the financing for Vulcan Energy’s zero-carbon lithium project.
Watch the TXF highlights of 2023 video!
(ProPakistani, Islamabad, 14 December 2023) The Private Power and Infrastructure Board (PPIB) announced the $2 billion financial close of the Thar coal-fired power project, which is currently under Chinese management. The project’s main sponsor is Shanghai Electric Group Corporation, while the coal supplier from Thar Block-1 is Sino-Sindh Resources Limited (SSRL). The ICBC, China Development Bank, Bank of Communications Co. Limited, China Minsheng Bank Corporation, Postal Savings Bank of China Co Limited, and Agriculture Bank of China are the main sponsors while Sinosure, China’s premier provider of export credit insurance, was the insurer. The project, which has a power capacity of 1,320MW, is part of the China-Pakistan Economic Corridor (CPEC). This plant brings the total installed capacity of five commissioned Thar coal-based power plants to 3,300MW.
(Daily Sabah, Istanbul, 19 December 2023) The funding that Türkiye’s state-owned financial institution providing banking services to exporters extended this year is expected to reach $41 billion (TL 1.19 trillion) by the end of 2023, its chairperson said Tuesday. Export Credit Bank of Türkiye (Türk Eximbank) has provided $38 billion from January through November, General Manager Ali Güney said, adding that they supported 16,800 exporters, with the small and medium-sized enterprises (SMEs) ratio reaching 84%. “In 2022, we supported a total of 15,440 exporters, of which 81% were SMEs, while in 2023, the number of supported exporters increased to 16,800, with an SME ratio of 84%,” Güney told Anadolu Agency (AA). In another Daily Sabah article of 29 December, it was noted that Türk Eximbank had become a shareholder in the Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider. Türk Eximbank’s first investment in an African entity makes it the first non-African sovereign shareholder in the AFC, it said in a statement.
(Environmental Defense, Toronto, 4 December 2023) At COP28, Export Development Canada (EDC) joined other export credit agencies to launch the Net-Zero Export Credit Agencies Alliances (NZECA), an alliance of international public finance institutions committed to reaching net-zero greenhouse gas emissions by 2050. However, EDC continues to provide public financing to oil and gas companies. In 2022, EDC provided around CAD $20 billion in public financing to oil and gas companies (which includes $12 billion for the Trans Mountain Expansion, or TMX, pipeline). So far this year, they have provided around CAD $12 billion (which includes $6 billion in loans for the TMX pipeline). “Crown corporation Export Development Canada has no place in a net zero alliance. Canada’s export credit agency continues to provide tens of billions each year to oil and gas companies, using publicly-back money to finance the companies and the activities that are fueling the climate crisis. Years of climate promises, including their own net zero commitment, have not made a difference.” said Julia Levin, Associate Directorof Environmental Defense in Dubai.
(UNEP, Dubai, 4 December 2023) At COP28 today, 8 leading export credit agencies, in partnership with the University of Oxford, Future of Climate Cooperation, and the UN Environment Programme Finance Initiative (UNEP FI) launched the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA), the first net-zero alliance comprising public finance institutions globally. In working to deliver net-zero economies by 2050, the NZECA will help decarbonise global trade and facilitate joint action from public and private finance. Combined, these ECAs supported an estimated US$120 billion in global trade in 2022 alone, providing finance and other services such as insurance and guarantees to facilitate local companies’ international exports. The export credit industry is hugely influential globally, with up to $28 trillion – comprising 80 to 90 per cent – of international trade relying on export financing, much of it provided by governments via export credit agencies and export-import banks. But NGOs note that a study by Net Zero Tracker found the bulk of “net zero” commitments from fossil fuel companies were meaningless as they either included no short-term emissions reduction plans, or did not fully cover scope 3 emissions (that is, the pollution released when a company’s products are used). Net Zero hopes/assumes that in the future technology will come along that can suck the carbon out of the atmosphere so that they can just keep going as it is until then.
