(UK Government, London, 8 August 2024) UK Export Finance (UKEF) and KUKE, the UK and Polish export credit agencies, have guaranteed a €249 million loan being arranged by Standard Chartered Bank for Turkish renewable energy investment company Kalyon Enerji, enabling the construction of Turkey’s second-largest solar project to date. This deal is expected to support UK jobs in the renewable-energy sector supply chain, particularly in the Midlands.
ECAWatch Newsletter 8
India’s RIL secures over $7 billion in offshore finance
(Hindu Business Line, Mumbai, 7 August 2024) Reliance Industries (RIL), India’s largest private sector company, secured over $7 billion in various offshore financing initiatives in FY24, and it would continue to monitor financial markets to seize suitable opportunities for capital raising to support its growth plans.. It obtained $4.45 billion in syndicated term loans facilities offshore. RJio also secured $2.2 billion to finance equipment and services for its pan-India 5G rollout comprising first-ever Finnish Export Credit Agency (Finnvera) supported facilities of $1.6-billion equivalent and $600-million equivalent facilities from Canadian Export Credit Agency. It also tied up $625 million with Korean Export Credit Agency to finance the purchase of floating, production, storage and offloading vessel in the oil and gas business.
EU launches export credit facility for Ukraine
(Global Trade Review, London, 2 August 2024) The European Union has launched an inaugural risk-sharing facility for the export credit industry, with an initial €300mn pilot aimed at boosting SME exports to buyers in war-torn Ukraine. The move comes after years of discussions in Brussels over a potential EU export credit facility with the Commission first floating the idea of such an instrument in 2021, citing “harsh competition” in key markets. The facility will extend guarantees to export credit agencies (ECAs) for transactions involving European SMEs and small mid-caps looking to export goods and services to buyers in the Ukrainian market. It is hoped the export credit facility will drive an uptick in European exports to Ukraine and support Kyiv’s reconstruction plan, forecast by the World Bank to cost US$486bn over the next decade.
UKEF reveals £8.8bn government support for UK firms in 2023/24
(Insider Media, Manchester, 1 August 2024) Businesses across the UK benefited from £8.8bn of funding support underwritten by UK Export Finance (UKEF) in the 2023/24 financial year. As the UK government’s export credit agency, UKEF provides loans, guarantees and insurance to help businesses sell their products around the world. The agency’s support in the last financial year enabled 650 UK companies to win or undertake export contracts – an average of almost two businesses securing export financing every day of the year. Businesses across the UK benefited from £8.8bn of funding support underwritten by UK Export Finance (UKEF) in the 2023/24 financial year.
Export credit agencies roar back in Africa
(Global Trade Review, London, 31 July 2024) There was a rebound in export credit agency activity in Sub-Saharan Africa last year, as agencies struck big-ticket deals across infrastructure and renewable energy sectors, fresh data shows. In its annual State of the Industry Report, the Berne Union reveals that export credit agencies (ECAs) and insurers recorded US$23bn in new medium and long-term (MLT) business in Sub-Saharan Africa in 2023, marking a resurgence in activity following a lull period in the immediate aftermath of the Covid-19 pandemic. In its annual State of the Industry Report, the Berne Union reveals that export credit agencies (ECAs) and insurers recorded US$23bn in new medium and long-term (MLT) business in Sub-Saharan Africa in 2023, marking a resurgence in activity following a lull period in the immediate aftermath of the Covid-19 pandemic. New ECA and insurer-backed transactions worth US$12bn were signed in Sub-Saharan Africa in 2022, and US$14bn in 2021, says the Berne Union, which represents ECAs, multilateral insurers and commercial underwriters. But last year an “infrastructure boom” triggered a rebound in the export finance market.
Biden Urged to Make EXIM Stop Fueling Climate Crisis
(Common Dreams, Portland, 7 August 2024) Climate advocates on Wednesday formally urged the Biden administration to instruct the United States’ export credit agency to stop financially supporting activities that are fueling the climate emergency. “Over the last two centuries, human-caused greenhouse gas emissions have led to global warming of 1.1ºC above preindustrial levels by 2020 and caused detrimental changes in Earth’s climate,” Friends of the Earth (FOE) and the Global Law Alliance for Animals and the Environment wrote to U.S. Secretary of State Antony Blinken. Their letter calls on Blinken to “make a determination pursuant to the Chafee Amendment in the Charter of the U.S. Export-Import Bank… that EXIM should deny applications for financial support for all activities and projects whose life-cycle emissions intensity substantially contributes to greenhouse gas emissions and the climate crisis.”
Ukraine’s State Property Fund Plans ECA War Risk insurance
(Ukraine Business News, Kyiv, 26 August 2024) The State Property Fund of Ukraine (SPFU) is actively seeking opportunities to expand export insurance instruments to cover war risks for privatization objects, said the head of SPFU, Vitaliy Koval. The SPFU is also appealing to international insurance companies with a proposal to expand export insurance instruments and involve them in covering war risks. This will help demonstrate to international insurers such as Czech EGAP, Japanese JICA, export credit agencies from Germany (Euler Hermes), France (Bpifrance Assurance Export), Italy (SACE), British (UK Export Finance), and Swedish (EKN) the presence of real demand for such services and will contribute to the activation of their work in Ukraine,” said Koval.
EXIM Board approves landmark $1.6 billion solar energy and water project in rural Angola
(Smart Water Magazine, Madrid, 29 August 2024) The Board of Directors of the Export-Import Bank of the United States (EXIM) approved a historic $1.6 billion direct loan to support the construction of 65 solar photovoltaic energy mini-grids with energy storage facilities that will power water collection, treatment, and purification systems in four southern provinces in Angola. The project will increase access to electricity and potable drinking water in several provinces in Angola that previously had little access and will promote improved health, education, and social wellbeing. The transaction, involving ING Capital, Sun Africa, and Omatapalo is estimated to support 3,100 U.S. jobs.
Canada’s EDC ‘nursing losses’ after lending $1bn to Thames Water
(Guardian, London, 20 August 2024) Canada’s state-backed export credit agency is reportedly nursing steep losses after lending debt-ridden Thames Water as much as a billion Canadian dollars. The British utility, which has said it could run out of cash by next June, received five loans from Export Development Canada (EDC) between 2018 and 2022 after the Canadian pension fund Omers had invested. The total value of the loans was between C$750m and C$1.45bn (between £422m and £820m), EDC said, while declining to give an exact figure. EDC sold the loans at a deep discount in recent weeks, according to the Financial Times, which cited unnamed investors.
The Role of Export Finance in Global Shipping’s Sustainable Growth
(Hellenic Shipping News, Cyprus, 12 August 2024) From mitigating risks associated with financing large-scale maritime projects to promoting sustainability and compliance, export finance plays a pivotal role in the shipping industry. Shipping moves 11 billion tons of goods each year, amounting to 1.5 tons per person worldwide, underscoring its indispensable role in international trade and economic development. Therefore, export finance strengthens the financial backbone that facilitates global trade operations. Investments in modernizing fleet technologies can lead to significant reductions in emissions, operational costs, and improved competitiveness on a global scale. While the global shipping industry represents a critical component of international trade, its operations have significant negative impacts on the environment, ranging from emissions to disturbances in marine ecosystems. In fact, even though maritime shipping is the most carbon-efficient method of transporting goods, it still accounts for 3% of all CO2 emissions worldwide. To achieve massive measurable impact in the shipping industry, strategic initiatives focusing on sustainable technologies and innovative financing solutions are paramount. Export finance [could act] as a key enabler by providing the necessary funding and financial instruments to support these large-scale retrofitting projects.
