(Bowen Island Undercurrent, BC, 2 August 2023) The federal government is trying to reclaim nearly $350 million in insurance paid to Suncor Energy Inc. by Export Development Canada in the wake of political unrest in Libya. The oil giant claimed $300 million in risk mitigation payments for losses linked to Libyan energy assets after fighting between rival political factions spread to the country’s oil crescent region in 2015, a Federal Court judge said in a ruling this week. The total — $347 million with interest — was determined by an arbitrator in 2019. But Export Development Canada, which insures against losses caused by political violence, argues that Suncor’s oil production facilities still deliver returns for the Calgary-based company. The insurance claim was paid under a policy underwritten by Export Development Canada for Petro-Canada in 2006, which Suncor then came into following their merger in 2009.
ECAWatch Newsletter 8
EU’s €45bn plan to tackle Latam productivity woes
(Financial Times, London, 31 July 2023) The European Commission’s recently released EU–LAC Global Gateway Investment Agenda identifies 130 types of projects scattered across the region in which it plans to inject €45bn by 2027. The roadmap targets the green transition, digitalisation, education and health, with projects in Chile, Colombia and Panama. “This is an enormous opportunity for Latin America to increase [European] partnerships, and receive not just investment but also technology transfer and finance to transform these areas,” says José Manuel Salazar-Xirinachs, executive secretary of the UN’s Economic Commission for Latin America and the Caribbean (ECLAC). The €45bn programme consists of funds and guarantees provided by the EU, its member states, development finance institutions and export credit agencies.
Euler Hermes to back €1.29bn financing for Angolan solar infrastructure development
(Bizcommunity, Cape Town, 31 July 2023) Standard Chartered plans to provide the Angolan Ministry of Finance €1.29bn in financing to construct solar photovoltaic electricity distribution infrastructure. The financing is backed by German export credit agency Euler Hermes. Of the €1.29bn total, €1.2bn is supported through Euler Hermes and the remaining €0.09bn is a commercial loan. The loan will fund 48 hybrid photovoltaic generation systems with energy storage that act as ‘mini grids’ and operate autonomously and aim to provide access to 100% renewable electricity for communities not connected to the national electricity grid.
Arafura Rare Earths offered EDC and Euler Hermes support
(AUManufacturing, No Address Provided, 31 July 2023) Arafura Rare Earths pushed ahead with engineering work and construction of its giant Nolans rare earths project in the Northern Territory in the latest quarter despite a softening market for the critical metals. Arafura has received a letter of interest from Canadian export agency Export Development Canada for the provision of up to US$300 million in debt financing. Nolans has support from the Northern Australia Infrastructure Facility of $150 million and in principle support for a loan guarantee of up to US$600 million from German export credit agency Euler Hermes.
Russian ECA plans special loans for African companies
(Punch Nigeria, Lagos, 29 July 2023) President Vladimir Putin of Russia says his country will offer preferential loans to enable African companies to buy industrial goods from the European country and enjoy after-sales services. He said his government was devising a leasing mechanism tailored for Africa, and that the Russian Agency for Export Credit and Investment Insurance would provide insurance for the planned preferential loans. The Russian leader made the disclosure during the ongoing Russia-Africa Summit and Russia-Africa Economic and Humanitarian Forum holding in St. Petersburg, Russia. According to him, the Russia government is also about to establish a dedicated investment fund for co-financing infrastructure projects in the African continent.
Sinosure’s Country Blacklist?
(Lexology, London, 22 August 2023) China’s Sinosure, a major (virtually the only) provider of export credit insurance to China’s factories, plays an instrumental role in facilitating trade between Chinese suppliers and international buyers. However, there’s an under-discussed aspect of their operations that is detrimental for certain countries: the so-called “country blacklist”. Sinosure has a well-documented history of denying (via its infamous blacklist) export credit insurance to companies with outstanding payments to Chinese suppliers. One list outrightly refuses insurance for buyers hailing from certain countries. Though it’s tricky to pinpoint the exact countries on this list, via discussions with industry stakeholders, past Sinosure employees, and clients I have compiled the below list of probable countries allegedly sidelined by Sinosure. The accuracy of this list is dubious. It is not based on any official Sinosure documentation or communications. However, the persistent rumors surrounding this list should not be ignored.
Australian Government sued for failing to report the climate and biodiversity impacts of subsidising fossil fuel projects
(Jubilee Australia, NSW, 18 July 2023) Jubilee Australia, a human rights and environmental organisation, has filed legal proceedings this morning (18th July) in the Federal Court of Australia against federal government agencies that subsidise new fossil fuel projects but don’t disclose the full environmental impacts of those activities. The claim is against Export Finance Australia (EFA) which is Australia’s export credit agency, and the Northern Australia Infrastructure Facility (NAIF), a $7bn fund for infrastructure in northern Australia. Both provide taxpayer-subsidised finance for risky new fossil fuel and related projects that would otherwise not go ahead. “There are very real fears that without clearer climate commitments, EFA and NAIF could fund infrastructure in Darwin designed to support a massive expansion of fossil gas – such as Middle Arm, or to subsidise some of the world’s largest fossil fuel companies such as TotalEnergies and ExxonMobil’s Papua LNG project in Papua New Guinea, similar to what EFA has previously done,” Luke Fletcher Director of Jubilee Australia said.
Green Groups Call on EXIM to Reject PNG LNG Project
(Common Dreams, Portland, 29 August 2023) More than two dozen advocacy groups from Papua New Guinea, the Asia Pacific region, and the United States on Tuesday urged the U.S. export credit agency to reject a liquefied natural gas project that they warned “presents significant financial risks and opportunity costs, as well as harmful climate impacts.” The groups — including the Center for Environmental Law and Community Rights Inc. (CELCOR), Food & Water Watch, Friends of the Earth (FOE) United States, Global Witness, Oil Change International (OCI), and Sierra Club — wrote to U.S. Export-Import Bank (EXIM) Chair Reta Jo Lewis about the Papua LNG project led by TotalEnergies. The coalition argued that approving Papua LNG not only would contradict the Biden administration’s 2021 pledge to end new public support for fossil fuel energy projects abroad and “further position the United States as an international laggard on climate, but would further jeopardize international climate goals, risk $13 billion USD in stranded assets, and put Pacific frontline communities at further environmental, social, and economic risk.”
US fossil fuel hypocrisy is betraying the planet
(Al Jazeera, Washington, 30 July 2023) While the president’s rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects. Ahead of its Climate Ambition Summit in September, the United Nations is calling on global leaders to phase out fossil fuels. US President Joe Biden is painfully falling behind on this agenda and must urgently get back on track to maintain any credibility in these climate discussions. As we suffer through extreme heat in the US and across the globe, President Biden has been protecting fossil fuel profits instead of people. From the Willow Project in Alaska to Gulf LNG exports, Biden props up dangerous oil and gas projects and the corporations that value their bottom line over our future… skipping important permitting processes meant to protect people and the environment, The latest reports from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) show that maintaining a 50 percent chance of limiting global warming to 1.5 degrees Celsius (34.7 degrees Fahrenheit) requires an immediate end to investments in new coal, oil and gas production and hazardous liquified fossil gas (LNG) infrastructure. While Canada, the United Kingdom, and France have published policies keeping their promises to stop international funding for fossil fuels, the United States has refused to publish a policy.
Feet to the Fire: Big Oil and the Climate Crisis
(Energy Portal EU, London, 12 August 2023) The transition to clean energy is sparking intense debates as the climate crisis worsens. While cities, universities, and pension funds across the U.S. have divested from fossil fuels, the divestment movement has faced obstacles. In California, a bill that would have required public pension funds to stop investing in the largest oil, gas, and coal companies was killed for the second consecutive year. The bill’s rejection was due to concerns over its impact on workers’ retirement funds. Banks also play a significant role in the climate crisis by financing governments in dealing with its effects and lending to fossil fuel companies. The frequency and intensity of climate-induced emergencies have overwhelmed scientists and journalists, calling for a new approach to disaster reporting. Instead of treating each disaster as unrelated, climate change should be recognized as the connecting factor among them. Germany recently released a draft policy for the provision of guarantees in the energy sector, contradicting its pledge to end international financing for coal, oil, and gas projects made at COP26. Germany’s export credit agency’s policy raises questions about its commitment to ending fossil fuel funding.
