(Inclusive Development International, Asheville NC, 7 February 2023) Ugandan, Tanzanian and U.S.-based human rights and environmental groups have lodged a formal complaint alleging that Marsh is violating OECD guidelines for responsible business conduct by serving as insurance broker for the planned East African Crude Oil Pipeline (EACOP). The complainants are calling for Marsh to drop its insurance brokerage role for the EACOP. Inclusive Development International and 10 human rights and environmental organizations in Uganda and Tanzania, which are remaining anonymous due to fear of reprisals, filed a complaint to the U.S. government today alleging that New York-based insurance giant Marsh, a member of the Marsh McLennan group, violated international guidelines for responsible business conduct by serving as insurance broker for the highly controversial East African Crude Oil Pipeline (EACOP). The groups submitted the complaint to the U.S. National Contact Point (NCP) for the OECD Guidelines for Multinational Enterprises, an office within the U.S. State Department tasked with handling allegations against American companies.
ECAWatch Newsletter 2
New ECGC policies to support Indian Exporters: Economic Survey Report 2023
(Taxcan, New Delho, 1 February 2023) The Economic Survey Report 2023 points out the significance of new Export Credit Guarantee Corporation (ECGC) policies to support Indian Exporters and the expectational changes by the 2023 Budget. The Export Credit Guarantee Corporation (ECGC) supports Indian exporters and banks by providing export credit insurance services. The new scheme launched in July 2022, under its ECIB products, has the enhancement of the mechanism of insurance cover to banks providing pre-shipment and post-shipment financeto 90 per cent from an average coverage of 70% for accounts with an export working capital limit of up to X20 crore to support small exporters. This framework could largely reduce the net demand for foreign exchange, the US dollar in particular, for the settlement of current account-related trade flows. Further, the use of INR in cross-border trade is expected to mitigate currency risk for Indian businesses. The Key aspect of this was that it could assist Indian exporters in getting advance payments in INR from overseas clients and in the longer term promote INR as an international currency once the rupee settlement mechanism gains traction.
OECD Civil Society Joint Position on ECA oil and gas restrictions
(Oil Change International, Washington, 27 February 2023) Over 175+ organizations from over 45 countries have signed onto a Joint Civil Society Position calling for a robust prohibition on oil and gas finance under the OECD Arrangement on Export Credits. Export Credit Agencies (ECAs) are the world’s largest international public financiers of fossil fuels, supporting an average of over $33 billion USD per year in fossil fuels- which is 7x the amount of their support for renewable energy. The Joint Position calls on OECD negotiators, including the US, EU Commission, Canada, UK, and others, to table a robust proposal on oil and gas prohibition to listen to the science and align the Arrangement with a 1.5C warming trajectory. One week before international negotiators meet at the Organisation for Economic Co-operation and Development (OECD) in Paris (March 6-9) to discuss aligning export finance with international climate goals, more than 175 civil society organizations (CSOs) from over 45 countries have released a Joint Position calling on world leaders to end OECD export finance for oil and gas, and explaining how it can be done. They urge OECD members who consider themselves climate leaders to table a proposal for doing so. The position is also supported by the Co-presidents of the Club of Rome,
LNG at forefront of Dutch Atradius foreign fossil fuel funding
(Argus Media, London, 22 February 2023) The Netherlands is assessing several applications for international fossil fuel projects that could be granted state funding until the end of 2023, most of which target the LNG supply chain. Dutch export credit agency Atradius — in charge of the country’s public financing for foreign fossil fuel projects — received 10 such applications before the end of last year that amount to €3.9bn in state funding if granted, according to a government document. The government in 2021 committed to ending all public financing for international unabated fossil fuel projects by 2022 but granted a one-year exemption to applications that were submitted before the deadline. Six of the 10 applications submitted before the end of 2022 concern transactions related to projects in the upstream sector, including the processing system for a new LNG project, a new offshore LNG project and the construction of a floating production platform for new fossil-fuel infrastructure, the government said today. Other applications concern the supply and delivery of vessels for existing and new fossil-fuel infrastructure. In addition, Atradius already granted coverage commitments for €8.4mn, with three projects related to the sale of LNG and two to the development of a new gas pipeline and the adaption of existing storage tanks. The government said that for “business sensitivity” reasons, it did not disclose the names of the applicants or the country where the projects would be located. The government’s commitment in 2021 to ending public financing for international unabated fossil fuel projects built on a pledge made at the UN Cop 26 climate summit in Glasgow, which had already made room for exceptions “in limited and clearly defined circumstances that are consistent with a 1.5-degree warming limit and the goals of the Paris agreement”. This included projects that “safeguard security of supply in Europe”, such as LNG terminals and infrastructure developed for existing LNG sources, the Dutch government said last year. By Florence Schmit
[Dutch police arrested six climate activists at their homes on January 26th for planning to block the A12 highway to nonviolently demand an immediate end to the government’s annual fossil subsidies. Nearly 40 civil society organizations and more than 1,000 people held a solidarity demonstration on the highway on January 28th – 768 were arrested and another demonstration is planned for March 11.. Dutch and Brazilian CSOs have also written to Dutch officials protesting support for a Brazilian floating production storage and offloading (FPSO) vessel ]
African Rail Projects Become Battleground For US-China Competition In Strategic Mineral Supply Chains
(Benzinga, Detroit, 12 February 2024) A U.S. delegation to a major mining conference in South Africa last week included officials from the Treasury and State departments and the chair of EXIM. Mining and building infrastructure on the continent hasn’t traditionally been a U.S. government priority but that is changing now that decarbonization of the economy has taken a front seat and Washington has grown worried about China’s dominance of supply chains for strategic materials, including cobalt and copper, used in electric vehicles and renewable energy systems powered by wind turbines and solar panels. The Democratic Republic of Congo (DRC) and Zambia hold more than a 10th of the known copper deposits in the earth’s crust. The DRC produces around 70% of the world’s cobalt, which is generally a byproduct of copper mining. Most of that cobalt is exported to China, which is by far the world’s biggest importer of copper ores and concentrates. So it’s no surprise that China has been investing heavily in the African mining and transportation sector. Chinese entities own all or part of most of the producing mines in the DRC. China provided interest-free financing for a railway built in the 1970s linking Zambia’s Copperbelt to a port in Tanzania on Africa’s east coast. China this week announced a plan to revitalize that railway, providing direct competition to a U.S.-backed rail corridor from the mineral-rich area to Angola on the Atlantic side of the continent. The United States is ramping up its efforts to secure critical metals and in May said it was performing due diligence for a potential financing package to fund and upgrade a rail line from the DRC border to the Lobito Port in Angola on Africa’s west coast, expected to greatly reduce the time and cost of trucking copper and cobalt to ports. Canadian company Ivanhoe Mines Ltd is the first mining customer for this Lobito corridor, having this week signed an agreement for the right to transport 120,000-240,000 metric tons a year along the line for five years starting in 2025
Africa’s Fossil-Fuel Investment Trap
(Foreign Affairs, Congers NY, 17 February 2022) By continuing to finance gas expansion in Africa Nnimmo Bassey and Anabela Lemos argue that outside investors, including ECAs, are in fact displacing renewables, delaying Africa’s energy transition, and making it harder for countries to decarbonize and escape a harmful extractive economic model. Investments in renewable energy would produce an economic model that is cheaper, more reliable, and more democratic. Africa need not be seen as a site of destitution and need. It is a continent with rich knowledge, practices, and potential for establishing ecologically sound socioeconomic systems — ones that don’t replicate the mistakes made by so many others in the past century. Ending coal finance now but oil and gas investments later, as advocated by Nigeria’s Vice President Yemi Osinbajo, puts off African development now and continues to channel these investments into corrupt regimes and/or inefficient technologies, and not into more immediate benefits from new efficient long-term electricity/energy technologies for Africans now.
Ukraine: TFX Trade Risk Briefing – What might be the impact of sanctions?
(TFX News, London, 25 February 2022) In a 20 minute TFX video, Rebecca Harding, CEO of Coriolis Technologies discusses the practical impact of sanctions on commodity trade and oil and gas prices, the shift surrounding Nord Stream 2, second the involvement of international payments mechanisms, specifically SWIFT in the fast-moving situation and third the potentials for rebalancing trade power relationships – specifically around Russia’s relationship with China and a pivot from East West to East East – and its limitations.
Building a bank for entrepreneurs is crucial, says CEO of Bpifrance
(New African Magazine, London, 11 February 2022) Bpifrance Assurance Export, a department of the investment bank Bpifrance, administers French state export guarantees management, transfered from the the Coface Group in 2015. Bpifrance notes that it helps stimulate French business’ growth by offering loans, providing guarantees and awarding buyer credit and supplier credit to encourage business abroad. It finances over 80 000 companies and provided over 6000 investment loans and 50000 short term loans in 2018 with a total production of 19 billion euros. Bpifrance is also the innovation agency for entrepreneurs with 1,3 billion euros of innovation soft loans distributed to 6000 companies every year.
EXIM’s first Black leader faces challenges on China, climate, equity
(Sherrod Brown, Washington, 10 February 2022) U.S. Sen. Sherrod Brown (D-OH), Chairman of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, applauded Reta Jo Lewis’ confirmation as President of the Export-Import (EXIM) Bank. Lewis was confirmed by a vote of 56-40. Lewis currently serves as a Senior Fellow and Director of Congressional Affairs at the German Marshall Fund, where she leads bipartisan efforts to strengthen transatlantic cooperation. Before joining the German Marshall Fund, Ms. Lewis served in the Obama Administration as the State Department’s first-ever Special Representative for Global Intergovernmental Affairs. Reuters noted that EXIM starts a new era as Lewis takes office as the first person of color and the first Black woman to lead the agency, facing challenges on competing with China’s massive export financing, climate change and racial equity.
AfCFTA Secretariat, Afreximbank Seal Deal on $10bn Fund to Boost African Economies
(This Day Live, Lagos, 10 February 2022) The African Continental Free Trade Area (AfCFTA) Secretariat and the African Export-Import Bank (Afreximbank), yesterday in Cairo, signed an agreement on the management of the AfCFTA Adjustment Fund (ADF) that would require $10 billion over the next five to 10 years. The base fund is a facility that would support African countries to cope with the loss of revenues from import tariffs and the private sector to effectively participate in the new trading environment established under the AfCFTA. Already, Afreximbank has committed $1 billion towards the ADF, which is made up of a base fund, a general fund and a credit fund.
