Index for September 2015

Volume 14, Issue 9

  • (Reuters, London, 30 September 2015) China's promise to curb public funding of "highly polluting projects" has isolated Japan and increased the pressure to close a deal to phase-out coal export subsidies after months of wrangling. The Paris-based Organisation for Economic Cooperation and Development has been hosting talks on the issue since last year. Wary of regional competition from China, Japan has been at the vanguard of opposition to phasing out coal export credits that help OECD nations send coal plant technology abroad and benefit companies such as Toshiba Corp. But on Friday in a joint U.S.-China statement on Climate Change, China signaled it would take similar steps to those already promised by the United States, the World Bank and others to end coal financing overseas.

  • (FOE France, Paris, 30 September 2015) Today's publication of new criteria for coal-fired power plant financing by French bank Crédit Agricole suggests that the bank will be unable to finance the controversial €800 million Plomin C coal power plant in Croatia, campaign groups beleive. The policy now rules out finance for coal power plants in high-income countries, which includes Croatia. The new policy from Crédit Agricole has been announced less than a month after the publication by a campaign group study which showing incompatibility of the Plomin C project with the bank's own corporate social responsibility standards. Crédit Agricole had responded to the report and publicly defended its advisory role in the project. However today’s policy changes now rule out the bank’s involvement in Plomin C. Civil society organisations are now focused on stepping up pressure on the worst coal finance offenders, including BNP Paribas in France, Deutsche Bank in Germany and Morgan Stanley in the United States, for example calling on customers of major French banks to switch their accounts away from climate damaging banks to banks with no fossil fuels in their portfolios.

  • (FOE Japan, Tokyo, 25 September 2015) At the proposed project site of the controversial 2,000-megawatt coal-fired power plant in Batang, Central Java, Indonesia, further cases of human rights violations have been reported. On September 25, the undersigned 63 organizations from 20 countries, have submitted the urgent petition as below to call on Japan Bank for International Cooperation (JBIC) to reject financing for the project, which has been pushed through in the forcible way, neglecting the local people’s opinion and rights.

  • (Globe & Mail, Toronto, 28 September 2015) General Electric Co. is planning to build a state-of the art $265-million (U.S.) engine plant in Canada, as it shifts more business out of the United States following the collapse of U.S. government-sponsored export financing. GE said Monday it will close down its operation that makes gas-powered engines in Wisconsin and construct a plant in Canada, creating 350 new jobs there. In mid-September GE said it would invest $26-million in an aircraft engine facility in Winnipeg, including a major upgrade to a massive wind tunnel used for testing jet engines. GE says it is making the moves because it can no longer get U.S. export credit financing and is currently bidding on $11-billion of projects that must have export financing in order to be completed. GE also recently announced an agreement with the UK export credit agency UK Export Finance to access export financing for up to $12 Billion. [It is not yet clear if such efforts are part of an effort to re-establish US export credit financing blocked by the US Republican Tea Party faction, or to stimulate competition amongst OECD ECAs to further sweeten official subsidies to exporting corporations.]

  • OECD Export Credit consultation with CSOs

    (OECD, Paris, 29 September 2015) A Consultation between Civil Society Organisations (CSOs) and Members of the OECD’s Working Party on Export Credits and Credit Guarantees (ECG) and the Participants to the Arrangement on Officially Supported Export Credits will take place on Tuesday, 17 November 2015, from 9.30 a.m. to 1.00 p.m., at the OECD Conference Centre, Paris.

  • (BUSINESS WIRE, London, 29 September 2015) Leading experts involved with project financing in oil and gas will meet this November 23-24 in London, at the Project Financing in Oil and Gas Conference. Project Financing in Oil and Gas has a varied amount of risk attached to a project, and this differs between up – mid – downstream. Sponsors, who are developing the projects, must therefore prove that their investments are not too risky and that satisfactory revenue will be produced once the project is built.
  • (ICC, Barcelona, 7 September 2015) The International Chamber of Commerce (ICC) is launching today the “ICC Global Export Finance Committee” – an export finance working group, chaired by Eric de Jonge, Global Head of Structured Export Finance at ING Bank. The launch event of the Committee took place in Barcelona, Spain, and is supported by many leading banks across the export finance industry. Operating under the umbrella of the ICC Banking Commission, the committee is the first step towards building a real global export finance community - representing medium- and long-term (MLT) export finance banks. The Global Export Finance Committee has three key objectives:

    1. To create a credible standing global discussion forum of banking experts in MLT export financing,
    2. To create a representative body to discuss industry matters with various stakeholders,
    3. To advocate for and help develop improvements and efficiencies through the standardization and harmonization of processes and regulations.

  • (All Africa News, Harare, 2 September 2015) The Reserve Bank of Zimbabwe (RBZ) is discussing with banks an insurance package for exports, as it moves to tackle a high political risk premium that has affected international trade. Zimbabwe's import bill has been rising while exports have been retreating, fuelling a widening trade deficit estimated at over US$700 million in the first quarter of 2015. Industry and Commerce Minister, Mike Bimha, said the RBZ had agreed to mobilise funding, estimated at not less than US$7,5 million, for the country to join the African Trade Insurance agency (ATI), which was set up by the Common Market for Eastern and South Africa (COMESA) to cover exports. Launched in 2001, ATI has supported over US$13 billion worth of trade and investment across Africa, and government says joining the agency would open doors to more markets for local products. Meanwhile, a delegation from the China Export and Credit Insurance Corporation was in Zimbabwe from September 21-25 to facilitate insurance cover on loan facilities extended to Zimbabwe's companies by Chinese banks.

  • (Global Capital, London, September 2015) The stated aim of the China-backed Asian Infrastructure Investment Bank (AIIB), officially launched in June 2015, is to respond to a need for massive spending across Asia. But its creation has caused political controversy, with supporters arguing it shows up previous iniquities while opponents fear it will be a mere tool for China's projection of power. An American campaign to boycott the AIIB collapsed in March when George Osborne, Britain’s chancellor of the Exchequer, announced that Washington’s staunchest ally would be joining the Chinese-initiated bank. Membership of the AIIB has since swelled to 57 countries, more than twice the number that half a century ago joined the Asian Development Bank (ADB), the incumbent Japanese- and American-led rival based in Manila. There will be significant support from Chinese policy banks for the One Belt, One Road strategy. State-owned banks experienced in financing overseas, such as ICBC or Bank of China, will be very well placed to provide support. There will probably be policy bank support from either Export-Import Bank of China or China Development Bank. And Sinosure will also have a role to play in terms of some of their export credit insurance. Canadian absence from the AIIB roster has largely escaped notice, although China is Canada’s second-largest trading partner after the US. Jack Austin, a former Canadian senator and influential politician who helped establish Canada’s diplomatic relations with China back in the 1970s, notes that Prime Minister Stephen Harper belongs to an evangelical Christian church that believes in the inerrancy of the Bible, and Christian fundamentalists are a core part of his support base. Austin says “The constituency sees China’s regime as totally hostile to their values”.

  • (PortNews, Moscow, 21 Septeember 2015) The Dutch export credit agency is ready to finance shipbuilding projects in Russia, Jan Fijnekam, Customer Finance Manager at Damen Shipyards, said today, September 21, at the International Conference “Advanced port fleet - the basis of safety” organized by media-group PortNews.

Volume , Issue

  • (Hasankeyf Action Day, Hasankeyf, 20 September 2015) On September 20th, activists, social movements and NGO's joined an international action day for the conservation of Hasankeyf and the Tigris River. Protesting against the Ilisu Dam Project, a large demonstration took place in the 10.000 year old town of Hasankeyf, which is threatened by the Ilisu Dam and Hydroelectric Power Plant Project. If the ongoing construction of the project is completed, there will be a massive social, ecological and cultural destruction in Turkish-Kurdistan, the North of Mesopotamia. The Ilisu Project will also intensify ongoing Middle East conflicts within and outside Turkish borders, in particular in Iraq and Syria. Protesters requested UNESCO designation of Hasankeyf as a world heritage site. In July 2010 after several years of local and international campaigns, the Export Credit Agencies of Germany, Austria and Switzerland suspended credit guarantees due to Turkey's failure to comply with required environmental, social and cultural heritage conditions. However, the Turkish state and the companies found new financing and continue with the project.