Index for August 2012

Volume 11, Issue 8

  • Draft version of Equator Principles III released for comments

    Draft version of Equator Principles III released for comments After much delay, the Equator Principles (EP) Association has released the draft of the updated Equator Principles (EP III) on 13 August 2012 for stakeholder consultation and public comment. The consultation period will continue until Friday 12 October 2012. Some NGOs have noted that once EPIII is in place, the situation will be much the same - an seemingly lofty standard with no external monitoring on its compliance, let alone a mechanism for  grievances and complaints.
  •  Lawsuit Launched Against Multi-billion-$ U.S. Ex-Im Subsidy of Fossil Fuel Projects in Australia(Pacific Environment, San Francisco, 2 August 2012) Three conservation groups initiated a legal challenge on August 2nd to the U.S. Export-Import Bank's nearly $3 billion in financing for two massive coal seam fossil-fuel facilities in Australia's Great Barrier Reef. The groups provided notice that the Export-Import Bank of the United States (“Ex-Im”) has violated or is likely to imminently violate U.S. environmental law by financing the Australia Pacific Liquefied Natural Gas (“LNG”) Project and the Queensland Curtis LNG Project. The construction, dredging, operation, and shipping associated with these facilities are likely to diminish water quality, destroy habitat, and otherwise harm several ESA-listed species, including endangered dugongs, threatened green and loggerhead sea turtles, and threatened saltwater crocodiles. Even Ayn Rand fan Paul Farrell has written on "How big mining deal will sabotage America
  •  Six Export Credit Agencies Offer Indonesian Ferro-Nickel Smelter Funding (Jakarta Globe, Jakarta, 9 August 2012) Six export credit agencies from Europe and Asia have expressed interest in providing $520 million to $790 million in financing to Indonesian state-controlled miner Aneka Tambang (Antam) to build its ferronickel smelter plant in Halmahera, on the island of Maluku. 
  •   Barrick Gold reveals exorbitant cost overruns on ECA rejected Pascua Lama mine (PDF)(Halifax Initiative, Ottawa, 3 August 2012) On July 26, Barrick Gold presented its second quarter results, announcing a further, year-long delay and exorbitant cost overruns of between 50 and 60% of recent estimates for its Pascua Lama mine on the Chile/Argentina border. Project costs will increase by as much as US$3 billion, bringing the total expense to an astounding US$8 billion, a marked contrast from initial estimates in 2001 of US$950 million. In 2010, Barrick applied for loans for the project from public financial agencies in Canada (Export Development Canada) and the United States (Export-Import Bank). Affected communities then provided the agencies with information about Barrick’s operations in their territories and this year, Barrick withdrew its requests, forfeiting both the loans and the accompanying political endorsement. It seems clear that both public agencies were poised to reject the company’s request, which would have sent a negative signal to shareholders. 
  •   Gazprom Neft secures 10-year EUR 258 million loan covered by Czech ECA (4-Traders, Annecy, 10 August 2012) Gazprom Neft has reached an agreement with a group of international banks to take out a EUR 258 million, 10-year syndicated unsecured loan facility supported by the Czech Export Guarantee and Insurance Corporation. The proceeds will be used for the purchase of equipment and services to upgrade oil refinery of NIS , Gazprom Neft's Serbian subsidiary. This is one of the largest loans covered by an export credit agency to a Russian counterparty this year.  
  •   New Ex-Im Bank Loans Guarantee Pre-Delivery Interest Rates(Aviation Week, Washington, 1 August 2012) Latam Airlines Group, the recently formed parent company of LAN Airlines and Grupo TAM, is the first airline to use the new US Ex-Im facility for pre-funded loan guarantees for aircraft purchases. The loan will be used to purchase two Boeing 767-300ERs from capital markets. 
  •  Will Pemex bonds trigger new wave of ECA capital guarantees?(PRNewswire, Washington, 25 June 2012) The Export-Import Bank of the United States (Ex-Im Bank) has authorized $1.2 billion in export financing in four separate transactions to support the export of U.S. goods and services to Petroleos Mexicanos (Pemex), Mexico's national oil and gas company. For the first time, Pemex will offer Ex-Im-guaranteed bond issuances to capital markets to fund the transactions. Pemex anticipates four-to-seven bond offerings that will occur from June to September 2012. Pemex ranks as Ex-Im Bank's top borrower. ECA capital market offerings are rare outside of the aircraft finance sector, but may become more widespread. 
  •  Indian ECA ECGC expects more claims as EU crisis continues(SME Times, New Delhi, 29 August 2012) India's state-owned export credit insurer ECGC has expressed concern that the number of claims against insurance cover is likely to rise in the coming months due to the ongoing Eurozone crisis, resulting in higher costs. "This year the Eurozone affect is still there and we have to pay higher claims in the current year or year after that. So far, in the last five months it (the claims) is not very high. But in the coming six months we have to pay higher claims," said Shri Shankar, Chairman & Managing Director of the Export Credit Guarantee Corporation of India. 
  •  Ten Ethiopian Boeing B787s Mainly Financed by J.P. Morgan with US Ex-Im Guarantee (, Addis Ababa,17 August 2012) Ethiopian Airlines has secured $1 billion of financing from J.P. Morgan for 10 Boeing B787-8- Dreamliners. The US Ex-Im Bank has provided export credit agency support via guaranteed loans that cover 85% of the total cost of the aircraft. The balance will be financed by a group of financial institutions including ING Capital, the Emerging Africa Infrastructure Fund (EAIF), The Netherlands Development Finance Company (FMO), the ICF Debt Pool LLP (ICF), and from internal cash resources of Ethiopian Airlines.