(ECA Watch, Ottawa, 29 September 2008) The OECD's ECG has declined to give a substantive response to ECA-Watch's proposals for Peer Review and has refused to change consultations with civil society organizations to a more meaningful format.
Index for September 2008
Volume 7, Issue 9
-
OECD ECG declines substantive response to ECA-Watch peer review proposals
-
ECAs and Nuclear Power
A. OECD ECG reviewing nuclear power understanding under the Arrangement
A. OECD ECG reviewing nuclear power understanding under the Arrangement
(ECA Watch, 10 September 2008) The first ECG discussions on an updating of the Sector Understanding on Export Credits for Nuclear Power Plant (Annex II, p.37 of the Arrangement), were to have been held on 24 September 2008.
B. JIBC to be merged into new Japanese financial body to facilitate nuclear power credits (PDF)
(JAIF, Tokyo, 17 September 2008) The Japan Finance Corp. will be launched October 1 via a merger of several Japanese financial companies, including JIBC. JFC will be a government-owned joint stock company that will provide the equivalent of a loan guarantee that would supplement such guarantees provided by the U.S. DOE for the construction of new US nuclear reactors where Japanese investors are involved. Concerns re the availablility of new finance for such high risk projects in the current financial crisis is undoubtedly a factor behind efforts by the nuclear power industry to encourage ECA support for new plants. France is also said to be considering loan guarantees for new reactors in the US. -
JIBC has published it's list of new projects from August 2 to September 19, 2008. These links may not be available as the JIBC web site seems temporarily suspended.
-
ECAs and Corruption
A. KBR executive pleades guilty in ECA supported Bonny Island bribe scandal
A. KBR executive pleades guilty in ECA supported Bonny Island bribe scandal
(Wall Street Journal, New York, 4 September 2008) In a wide-ranging foreign-corruption investigation, fired former Halliburton Co. executive Albert J. "Jack" Stanley has pleaded guilty to orchestrating more than $180 million in bribes to senior Nigerian government officials. The bribes were used to win a contract to build a U.S. ExIm and UK ECGD supported liquefied-natural-gas plant at Bonny Island in Nigeria.
B. San Antonio businessman pleads guilty in U.S. ExIm Mexico bribery case
(Export Import Bank, Washington, 22 August 2008) In a plea bargain, San Antonio businessman Andrew Parker, accused of scamming more than $160 million dollars from the Export-Import Bank, has pleaded guilty. Parker was accused of falsifying loan applications from Mexico, submitting false reports that goods were bought with the loans, and diverting millions of the loan proceeds for his personal use. -
(flightglobal.com, Sutton, 22 September 2008) "The market is set to go through a radical change as the number of active banks in aviation finance has shrunk to about 30, down from 50 in the last downturn. The tightening market will inevitably see the airframers moving again into aircraft financing, many believe... In terms of funding sources, Export Credit Agency financing is the only indicator that has remained "green or satisfactory" according to the Boeing Capital Corporation chart of capital providers over the past year. Airbus estimates ECA financing will account for 17% of this year's deliveries but anticipates ECAs will slightly increase support next year. [Airbus] is predicting a rise to about the 20% level."
-
(IRN, Berkeley, 5 September 2008) The high drama over Turkey’s Ilisu Dam continues. A new report by the official monitoring team demonstrates that the project continues to violate the conditions under which Austria, Germany and Switzerland agreed to fund the project. Ilisu has become a test case for the dam industry’s efforts to strengthen the social and environmental acceptability of its projects.
-
Indonesian military purchases to be supported by ECA credit facilities
A. Indonesian submarine, tanks, missles to be bought with export credits
A. Indonesian submarine, tanks, missles to be bought with export credits
(Jane's Navy International, 25 September 2008) The Indonesian Navy has outlined plans to procure submarines from a foreign supplier over the next few years through export credit, a funding facility being increasingly used by the southeast Asian country Speaking through the state-owned Antara news agency on 23 September, Navy Chief of Staff Vice-Admiral Tedjo Edhy Purdijatno said that "several countries" had offered to sell submarines to Indonesia, including Germany and South Korea. He added that export credit facilities would be used for the purchase. It was also decided that 17 BMP-3F tanks would be bought from Russia while the number of missile destroyers and the country of origin of one submarine had yet to be decided.
B. Expanded cover of Dutch ECA for Indonesia used for military exports
In the last ‘What’s New’ of August 2008 a news release of the Dutch Ministry of Finance was published, reporting that it had hedged a total €210 million of the export credit risks of the Netherlands in Indonesia through credit default swaps (CDS's). Early this month the signing of a new insurance policy for a Dutch export to Indonesia was reported for the supply of additional goods to the Indonesian Ministry of Defence for the 4 Dutch military navy vessels already insured by Atradius DSB for an amount of €1 billion. Since 2002, Atradius DSB insured in total 6 Dutch export transactions with a military nature, and only one civilian export transaction. -
(ZBC News, Harare, 23 Septmeber 2008) The opening of credit facilities by the international community has been commended as a step in the right direction in the stabilization of the country’s economy. The African Export-Import Bank has pledged to extend a credit facility worth US$80 million. It is hoped that the signing of an agreement to facilitate the formation of an inclusive government by the principals of the three main political parties in the country, will see the international community coming forthwith to re-open credit lines.
-
(Nazret.com, Washington, 8 September 2008) Indian companies organized as the Chadha Group are to invest on sugarcane plantation, and sugar, paper and ethanol production in Ethiopia with a total capital of 190 million dollars. Apart from soft loans from India amounting to US$700 million in the last 2 years a new trend is emerging from India for financing various projects in Ethiopia. In the last 6 months various Indian companies received supplier credits amounting to US$100 million through Indian commercial banks supported by the Export Credit Guarantee Corporation of India (ECGC), to execute electricity projects in Ethiopia.
-
(Reuters, London, 22 September 2008) - Katanga Mining Ltd does not expect the credit crisis to impede plans to raise $550 million to develop a new copper mine in Congo. "That facility is primarily ECA funded so this financial calamity ... really should not have much of an impact on the financing," Chief Financial Officer Stephen Jones said. Up to half of the funding is expected to come from South Africa's Export Credit Agency.
-
(Business Standard, New Delhi, 23 September 2008) Indian companies will have to stagger their expansions as financial instutions have started tightening lending to cope with the liquidity crunch in the aftermath of the turmoil in financial markets. But what’s interesting is that funds from ECAs are significantly cheaper and are available for a longer tenure (10-13 years, including three years of construction). Typically, imports form 30-40% of project costs (large, industrial project) and corporate groups like JSW are using ECAs to fund the debt component (85%) of project imports.
-
(IPS, Washington, 15 September 2008) After funding a predictable boondoggle of a pipeline, the international lender hightails it out of an impoverished African nation. While this commentary focuses on the role of the World Bank, the U.S. Export Import Bank and French ECA Coface also supported this project despite NGO warnings that " it would only exacerbate conflict in a country where corruption, poverty, illiteracy and ill health was at record levels." ECA Watch would like to know if OECD ECAs have followed the example of the World Bank and foreclosed their loans and/or loan guarantees which were based on the conditions the World Bank now acknowledges have not been met.