Index for October 2015

Volume 14, Issue 10

  • (New York Times, Washington, 27 November 2015) The House acted with rare bipartisanship on Tuesday to approve legislation that would reopen the federal Export-Import Bank, after a debate that underscored the split between the party’s traditional pro-business members and ascendant free-market conservatives who are suspicious of big corporations. The lopsided final vote of 313 to 118 belied that split, as a majority of Republicans allied with all but one Democrat to reauthorize the 81-year-old bank agency, but only once the bill’s passage was assured... But the bank’s future may not be resolved until December. The House bill now goes to the Senate, which approved a similar bank reauthorization measure as part of an unrelated transportation bill.

  • (ClimateWire, Washington, 27 October 2015) The Obama administration has crafted a deal with Japan to restrict financing for overseas coal projects, several sources told ClimateWire. The agreement is aimed at influencing other members of the Organisation for Economic Co-operation and Development (OECD), which will meet next month in Paris for a contentious decision over setting common rules to phase out coal financing for export credit agencies. Yet other OECD countries have not yet signed onto the deal, which could curtail 80 percent of coal projects in the export credit agency pipeline. Sources say the talks are in a sensitive phase and the administration wants to bring in other countries before making an announcement.

  • (CS Solutions Blog, 26 October 2015) International owner, operator and manager of LNG carriers, GasLog Ltd. has completed an export credit agency-backed debt financing of USD 1.3 billion with 14 banks for its newbuilding program. The so called Newbuild Facility will include eight vessels, which will be delivered between 2016 and 2019. Seven of the eight vessels have long-term contracts of between 7 and 10 years and will be chartered to a subsidiary of BG Group plc following delivery... . Korea Eximbank and Ksure either directly lent or provided cover for over 60% of the facility.
  • (Management Today, London, 30 September 2015) Evraz, the steel and mining giant that is 30.8% owned by the Russian oligarch and Chelsea FC owner Roman Abramovich, is due to receive a £45m loan from Britain's export credit agency. The loan is part of the UK Export Finance 'direct lending' scheme launched last year by the Government in a bid to meet its target of doubling exports by 2020. The scheme lends money to overseas importers of British goods and services in the hope that it will create jobs in the UK. According to the Times, Evraz will use some of the cash to pay Primetals Technologies (a joint venture between Siemens and Mitshubishi Heavy Industries) to upgrade its steel factory in northern Canada.

  • (New York Times, New York, 10 October 2015) In 2013 the people who dreamed up Big River Steel in Arkansas wanted government aid that would help make the project successful — the kind of aid that groups like Heritage Action and Americans for Prosperity, both generously supported by the right-wing billionaires Charles and David Koch, derisively describe as “corporate welfare.” The Arkansas Legislature was considering a $125 million bond issue to help pay for the mill’s construction, as well as over $200 million in tax credits for buying and installing recycling equipment... The deal also depended on an $800 million 10-year loan from a German bank, KfW IPEX-Bank which in turn, was contingent on credit insurance provided by Euler Hermes, an ECA like the Export-Import Bank of the United States. In America, of course, Koch-funded groups have led the battle to defund the Ex-Im Bank. The Germans have no such ideological hang-ups, because Big River Steel would be buying its steelmaking equipment from a German company. In February 2013, Koch Minerals, part of Koch Industries took a 40% equity stake in Big River Steel, making them the project’s biggest investor. The Arkansas incentive package ultimately passed, the German government-insured loan was completed and the plant should be up and running next year.

  • (Reuters, Moscow, 29 October 2015) A deal to raise financing for the Novatek-led Yamal LNG project in Russia is in its final stages, the chairman of the management board at Gazprombank, Andrey Akimov, told Reuters. Financing for the $27 billion project is seen as a test for Russia in securing foreign loans, at a time when the country's access to capital markets is limited by Western sanctions over its involvement in the conflict in eastern Ukraine. In a rare interview, Akimov said Chinese lenders are set to provide $12 billion, Russian banks $4 billion, and export credit agencies are expected to put up another $4 billion. Novatek has a 50.1 percent stake in what will be only Russia's second LNG plant. France's Total and China's CNPC hold 20 percent each. Last month, Novatek agreed to sell a 9.9 percent stake to the China Silk Road Fund.

  • (Tass, Verona, 22 October 2015) The Italian export credit agency SACE has suffered losses up to €3 billion due to sanctions against Russia, head of the agency Giovanni Castallaneta said. "We have already suffered damage for 2014-2015 for the sum of €2.5-3 billion," Castellaneta told the Eurasian Economic Forum in Verona. Italian exports to Russia and neighboring countries decreased by $6.5 billion.

  • (Creamer Media, Johannesburg, 29 October 2015) Canada’s official trade finance agency, Export Development Canada (EDC), has formally established permanent offices in Johannesburg, from where it aims to facilitate $10-billion-worth of business between sub-Saharan African and Canadian companies over the coming five years. The export credit agency has already provided $7.4-billion in financial support to African firms purchasing goods and services from Canadian companies, including participation in a R6.99-billion rand-denominated loan facility for Bombardier Transportation, which has been awarded a contract to supply 240 electric locomotives to Transnet Freight Rail.

  • (TFX News, London, 16 October 2015) Sullivan & Worcester's Mark Norris and UK Export Finance's Margaret Eyres present S&W's Export Credit Agency Annual Update breakfast briefing. Norris analyses the general trends affecting the ECA market, while Eyres provides an overview of UK Export Finance's new direct lending scheme. Watch the 1hr 9min full video at this link.
  • (Global News Wire, Copenhagen, 29 October 2015) During the period under review, the volume of export credit guarantee offers given by Finnvera was 52 per cent greater than in the corresponding period in 2014. As concerns financing offers for export credits, the figure was over two times greater. The volume of loans and guarantees granted to SMEs and enterprises larger than the SME definition applied by the EU was 31 per cent greater than the year before.

  • (Interax, Moscow, 20 October 2015) The Russian government has approved the allocation to the Cuban authorities a state export credit for up to 1.2 billion euro for financing the construction of four generating units for thermal power plants (TPP) on the island: one 200-megawatt power unit at Maximo Gomez and three 200-MW units at Eastern Havana. The project will be implemented by Russia's Inter RAO Export LLC, a subsidiary of Inter RAO UES and Cuba's Energoimport, part of Union Electrica. The terms of the project will be spelled out in the contract on upgrading the capacity of the power stations. Under the terms of the agreement, Cuba will exempt Inter RAO and contractors from payment of profit taxes and customs fees, and their employees will be exempt from individual income taxes.

  • (ANSAmed, Rome, 20 October 2015) New export opportunities in the United Arab Emirates for Italian companies after the agreements signed by SACE with the Dubai Aviation City Corporation (DACC) and Abu Dhabi Ports, on the occasion of the Emirati National Day at the EXPO. The accord with DACC, said SACE, is intended to support export and investments by Italian companies involved in the Dubai South project, an area of 145 square kilometers which will host the new international Al Maktoum airport and EXPO Dubai 2020. After the accord, SACE opened a one billion Euro line of credit for DACC for the purchase of goods and services by Italian companies.

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  • (Natural Resources Defense Council, New York, 22 October 2015) We have given a "climate grade" to key countries for their climate actions and new targets in the lead-in to the Paris climate agreement. Nobody is receiving top marks - an "A+" - but some countries are receiving failing grades. We gave Japan a failing grade - a "D" - for its climate actions because it is the biggest financer of overseas coal projects, its climate target is too weak, and it is a bit fuzzy on some of its methodologies. Reason #1: Japan is the largest provider of public finance for overseas coal projects. Japan had the largest amount of coal financing of any country by far, more than double any other OECD country's financing, with over $20 billion of financing from 2007 to 2014, according to data from NRDC, Oil Change International and WWF.

Volume 14, Issue 9

  • (Reuters, SOHAR, Oman, 8 September 2015) State-owned Oman Oil Refineries and Petroleum Industries Co (ORPIC) will borrow money to finance 70 percent of its $5.2 billion plastics production complex, its chief financial officer said on Tuesday. The complex, the Liwa Plastics Project, is being built in the northern port city of Sohar and aims to further diversify the sultanate's economy away from hydrocarbons. It is due to be completed in 2018. ORPIC has contacted 35 banks - both domestic and international - and eight export credit agencies, to fund the project.