(Alliance News, 23 September 2013, London) – Aureus Mining Inc. Monday said the Export Credit Insurance Corporation of South Africa has approved export credit support for the company’s US$88 million project debt finance facility to fund the development of its Liberian New Liberty Gold Project, with the finance facility being provided by Nedbank Ltd and Rand Merchant Bank. South Africa’s ECIC has experienced a “phenomenal” growth in its insurance portfolio to R17bn (US$1.69bn) in the year to end-March from the previous year’s R11bn (US$1.01bn).
ECAWatch Newsletter 9
Are US Senators regretting Ex-Im vote?
(Heritage Foundation, 3 September 2013, Washington) For some lawmakers, corporate welfare is okay, unless it hurts someone in their district. Four lawmakers from Minnesota and Michigan are up in arms over a proposed $650 million financing deal for Roy Hill, an Australian mining company. The deal, backed by the Export-Import Bank, the U.S. government’s export credit agency, is for the purchase of Caterpillar mining equipment manufactured in the U.S. But Senators Amy Klobuchar (D–MN), Al Franken (D–MN), Carl Levin (D–MI), and Debbie Stabenow (D–MI) don’t like this deal because Roy Hill competes with American iron ore producers, the majority of which operate in the Senators’ home states of Minnesota and Michigan.
US Ex-Im and OPIC brace for shutdown
(Trade Finance, 27 September 2013, Washington) The Export-Import Bank of the United States (US Ex-Im) and Overseas Private Investment Corporation (OPIC) have published contingency plans in the event that Congress fails to agree to a continuing resolution to fund the US government. For OPIC, “commitments of new loans, loan guarantees, and political risk insurance will not take place during shutdown – not because of a hiatus in appropriations, per se , but because a temporary reauthorisation provision dependent on the appropriations process will lapse during the shutdown”. At US Ex-Im, new obligations as well as delegated authority to exporters and/or banks under insurance and guarantee programmes will be suspended. The bank will continue to process and deposit funds received, and will pay claims under its guarantee and insurance programme, which carry the full faith and credit of the US government. Of Ex-Im’s employees, 17 will be retained out of the total of 409 (4.1%) in addition to three contractors, three Presidential appointees, and 24 employees on an on-call status. Details of US Ex-Im’s plans can be found here, and OPIC’s here.
US and French ECAs Keep Spigots Open for Space Ventures
(SpaceNews, 23 September 2013, Paris) Representatives of the U.S. and French export-credit agencies gave no sign of pulling back on their support for their domestic rocket and satellite builders despite ongoing concerns by private-sector bankers that the agencies are funding projects that cannot survive. The allegation that ECA low-interest financing stimulates projects of dubious long-term solvency is not new. But it has assumed a new relevance with the spate of emerging-market nations using ECA support for telecommunications satellite systems whose national markets raise questions of their survivability.
European ECAs to Fund Russian Superjet Project
(Moscow Times, 13 September 2013, Moscow) European credit agencies will help finance the sales of Russia’s Superjet 100 aircraft, Vedomosti reported Thursday. A source close to Sukhoi Civil Aircraft, which produces the planes, said the Superjet has been deemed a European product because 70 percent of its components are European. The move paves the way for European export credit agencies, which can provide government-backed loans without seeking a commercial return, to push the plane on the international market… The U.S. and European financing deals allow the Superjet to compete with its biggest rivals, the Embraier 190 and CRJ 1000, bringing it a step closer to Russia’s ambitious goal of manufacturing $250 billion worth of aircraft by 2025.
BNDES president says Cuba and Angola have requested confidentiality in financing contracts
(Folha de Sao Paulo, 27 August 2013, Brasilia) BNDES President Luciano Coutinho said that financing granted to Angola and Cuba were classified as secret by the government because of an agreement made between the two countries and Brazil. “The contracts are subject to provisions from the countries of destination. They are subject to a treaty or a provision by a sovereign country benefiting from an export,” he said on the 27th during a public hearing at the Senate’s CAE (Committee on Economic Affairs). Folha revealed in April that the Development, Industry and Foreign Trade Minister Fernando Pimentel had declared documents on loans to the two nations secret, which did not occur with another 13 beneficiaries of funding from the state bank. At that time, the ministry claimed that the contracts contained “strategic” information and were “covered by commercial confidentiality”. In 2012 alone, BNDES disbursed $ 875 million to Cuba and Angola. According to Coutinho, the global values involved are public, but the details of the transaction can not be revealed. He said the loan money was destined for supporting the production and export of capital goods and engineering services to both countries.
POTATOMATION: Jubilee Australia brings its concerns about the ECA-backed PNG LNG project to the Sydney Fringe Festival
Jubilee Australia has teamed up with a group of Sydney visual artists to create a visual arts installation for the Sydney Fringe Festival that profiles the themes in Jubilee Australia’s 2012 report Pipe Dreams: The PNG LNG Project and the future hopes of a nation. The report is the most complete discussion to date of the potential risks and benefits to the people of PNG of the LNG Project, which was provided with financial support by no fewer than five ECAs and pivotal diplomatic support from the Australian government. The report argues that, contrary to the official discourse, there are serious risks that the revenues generated by the Project will not mitigate the negative economic and social impacts of the Project. In fact, it is very likely that the Project will exacerbate poverty, increase corruption and lead to more violence in the country.
Potatomation Art Collective’s installation entitled Retelling PNG Pipe Dreams will be on exhibit at the 2013 Sydney Fringe Festival through Saturday 21 September.
Jubilee Australia published Pipe Dreams in December 2012 as a follow to its 2009 report on Australia’s export credit agency, Export Finance and Insurance Corporation (EFIC) called Risky Business: Shining a spotlight on Australia’s export credit agency. Jubilee Australia advocates for reforms to EFIC and keeps a close watch on its business providing financial products to Australian multinationals in the extractives industry.
Australia’s EFIC considers financing Mongolia’s Oyu Tolgoi Copper-Gold Mine
(EFIC, Sydney, 11 September 2012) Australia’s EFIC has announced it is considering support for the Oyu Tolgoi Copper-Gold mine in Mongolia and requests comments in the period 10 September – 12 October 2012. A report released in December 2011 by CEE Bankwatch Network, urgewald, Bank Information Centre and Oyu Tolgoi Watch in Mongolia, with the financial assistance of the European Union says: “The future of herding in the South Gobi is under threat as the development of extensive mine infrastructure pushes herders out of traditional camps, fragments pasture land and puts pressure on water resources.” The World Bank has also announced plans to consider the project.
Ex-Im Bank approves $2 billion loan to Barakah nuclear power project in UAE
(Reuters, Washington, 7 September 2012) The U.S. Export-Import Bank said on Friday it authorized a $2 billion direct loan to Barakah One Co of the United Arab Emirates to purchase U.S. equipment and construction services to build one of the world’s largest nuclear power plants.
Ex-Im Bank touts 18K U.S. jobs in $5B loan for Saudi petrochemical complex
(E&E Publishing, Washington, 28 September 2012) Saudi Aramco and Dow Chemical Co. are $5 billion closer to building a world-scale petrochemical complex in Saudi Arabia, thanks to the U.S. government. Yesterday, the Export-Import Bank authorized a $4.975 billion loan to Sadara Chemical Co., a joint venture between Dow and Saudi Aramco… making it the largest job-creating deal in the bank’s history… Doug Norlen, a policy director at Pacific Environment, said the environment is also a loser in the deal. He pointed to Ex-Im’s estimates that Sadara will release 4.4 million metric tons of CO2 a year. “Ex-Im Bank’s support for the Sadara project is another example of the agency’s ongoing fossil fuel binge,” he said.
