Index for October 2014

(ECA Watch, Brussels, 29 October 2014) ECA Watch has written OECD ECA's, Finance Ministers and OECD Secretary General Angel Gurría regarding upcoming discussions around coal financing through export credit agencies. We understand that they may be considering proposals to perpetuate coal financing and even to extend preferential terms for certain coal plant technologies. We urge them to reject this proposal, which would pervert the internationally identified goal of curbing support for coal, including export credit agency support. According to the Intergovernmental Panel on Climate Change (IPCC), if planetary warming is to be kept under 2 degrees Celsius above preindustrial levels (the level deemed “dangerous” by world leaders), the majority of proven fossil fuel reserves will have to be left in the ground. The IPCC has also found that, in order to limit temperature rise to 2°, annual investments in conventional fossil fuel power plants over the next two decades (2010 to 2029) have to decline by an average US$ 30 billion, and annual investments in extraction of fossil fuels have to decline by an average US$ 110 billion. Our letter follows on concerns expressed in May and June 2014

Read our letter here

(Reuters, Berlin, 23 October 2014) Big exporting nations are breaking their pledge to fight corruption in global trade, with more than half of the countries that have signed an OECD anti-bribery convention failing to implement it, a report by Transparency International (TI) showed on Thursday. The Berlin-based anti-corruption watchdog named Japan, the Netherlands, Greece, Russia and Brazil as among the worst offenders. [The latest OECD Export Credit Working Group review of member responses to the 2006 survey on ECA measures taken to combat bribery, and individual ECA survey responses, can be found by patient and diligent researchers on the OECD web site, but show previously identified weaknesses in the monitoring of compliance. For example, one OECD member ECA only requires their underwriters to exercise enhanced due diligence if a corporate applicant has admitted to being debarred by the World Bank, the IMF or other IFIs, would allow support if a convicted briber has implemented improved management systems to detect bribery, and only sometimes will invalidate support to a company that is proven to have been involved in bribery.]

(Devex, Washington, 6 October 2014) Congress has voted to reauthorize Ex-Im, the government agency that finances U.S. exports of goods and services — but only through June 30, 2015. The measure passed after it was tucked into a much larger spending bill that also funded the Obama administration’s Ebola response. In a debate largely fought along ideological lines, tea party Republicans argued that Ex-Im has a history of financing politically favored companies. Advocates for Ex-Im, including the Obama administration, insisted that in the face of stiff global competition, the bank’s support is needed to sustain American businesses and jobs. Drawing far less scrutiny and attention in Washington, however, is the reality that Ex-Im is also emerging as a key player in Power Africa, U.S. President Barack Obama’s initiative to double access to energy across sub-Saharan Africa by 2018. In fact, of Obama’s $7 billion, five-year pledge to Power Africa announced last year, up to $5 billion in financing is slated to come from the bank.
 

(Energy Business Review, London, 6 October 2014) The Russian government has approved $10bn credit to Belarus for the construction of a nuclear power plant (NPP) in Belarus... "The Russian side will provide the Belorussian side a state export credit of up to $10 billion to finance the cost of every contract ... on supply of goods, works done and services delivered ... by a Russian organization responsible for the construction of two energetic blocks [nuclear reactors] in Belarus." The project was initiated by Belarus in the 1980s, but was put on hold following the Chernobyl nuclear disaster in 1986 in Ukraine. Additionally, concerns over the project were also raised by Belarusian opposition and environmental activists. These concerns became widespread following the March 2011 disaster at Fukushima nuclear power station in Japan. The new nuclear power plant will also feature advanced technology to ensure accident-free operations.