Index for December 2016

Volume 15, Issue 12

  • (, Jacksonville, 19 December 2016) The Papua New Guinea (PNG) government announced on Friday that it will deploy military personnel to stop “violence” near the country’s biggest resources installation, the Exxon-Mobil Liquefied Natural Gas (LNG) project...The security and viability of the ExxonMobil operation is a key concern in Washington. In November 2010, then US Secretary of State Hillary Clinton visited PNG and noted that the US Export-Import Bank was helping finance the ExxonMobil project, noting "China is in there every day in every way trying to figure out how it’s going to come in behind us, come in under us.”... Traditional landowners are now threatening to physically attack the LNG plant over the government’s failure to pay promised royalties and equity in the project. The landowners are owed $1 billion kina ($US315 million) in royalties.
    Jubilee Australia has had concerns about the potential militarisation of the project since its inception,' said Director Luke Fletcher . 'We first raised these concerns in 2009 in our Risky Business report, and more fully developed them in 2012 with Pipe Dreams.' He questioned the characterisation of the violence as simply tribal. "If that is so, why has it suddenly broken out now, just as landowner unhappiness with the project escalates? And why engage Exxon and Oil Search (project operators) to assist with policing the area?

  • (TFX News, London, 12 December 2016) ECAs are to offer guarantees for two LNG projects in Mozambique, as commercial lenders watch closely to see how talks progress between the government and the IMF before committing to the project. Export credit agencies (ECAs), including the Export-Import Bank of Korea (Kexim), France's Coface, Italy's Sace, and the Export-Import Bank of China (China Exim), are set to play a key role in the financing of two Rovuma Basin liquefied natural gas (LNG) projects planned in the north of Mozambique.

  • (Friends of the Earth USA, Washington, December 2016) The Belt and Road Initiative (BRI) is a major Chinese strategy which marks a national push for China to increase economic links to Southeast Asia, Central Asia, Russia, and the Baltic region (Central and Eastern Europe) through various infrastructure and development projects. BRI sends a clear signal for Chinese industries to invest along proposed BRI land and maritime routes, and embodies the political, economic, and foreign diplomacy interests of China abroad. The Export-Import Bank of China holds an outstanding loan balance of over 1000 projects involving roads, railways, ports, power resources, pipelines, communication, and industrial parks in the 49 countries along the 'Belt and Road'. [p.6] A researcher at the Chinese Academy of International Trade and Economic Cooperation has suggested that China must take active measures to reduce upheaval and turmoil from Islamic risk in the BRI, in part through upgraded policy-oriented export credit insurance and foreign investment insurance.

  • (FOE Japan, Tokyo, 5 December 2016) On December 5, eleven local Indonesian community leaders, who have continued to oppose the “Batang Coal-fired Power Plant Project” over five years now, visited the Japan Bank for International Cooperation (JBIC) Jakarta office and submitted their objections against JBIC. (18 villagers signed on as community representatives and the signatures of more than 900 villagers who supported this objection were also attached.) In their objection, the villagers pointed out that the project has failed to comply with “JBIC Guidelines for Confirmation of Environmental and Social Considerations”, has made their lives worse and has caused the violations of human rights.

  • (Business Journal, Budapest, 12 December 2016) The Hungarian Export-Import Bank (EXIM) and export credit agency Export Development Canada (EDC) will jointly finance a project to build eight mobile power plants using General Electric (GE) technology for Indonesiaʼs state-owned electricity company, Hungaryʼs Ministry of Foreign Affairs and Trade said today, according to Hungarian news agency MTI.

  • (Guardian, London, 7 December 016) Congress quashed the hopes late Tuesday of reviving the United States’ export credit agency, which had been aiming for a stopgap lifeline allowing them to approve more than $20bn in new deals, many of which pose imminent harms to the environment. Now, the fate of a pristine coral reef, an east African mangrove forest, and the livelihoods of farmers and fishermen in a south-east Asian river delta lie in the hands of a new Congress and president. Since 2009, when Barack Obama became president, the Export-Import Bank has signed almost $34bn worth of low-interest loans and guarantees to companies and foreign governments to build, expand and promote some 70 fossil fuel projects around the world, according to an investigation by the Guardian and Columbia University’s Graduate School of Journalism’s Energy and Environmental Reporting Project.

  • (Wall Street Journal, Washington, 8 December 2016) President-elect Donald Trump’s jawboning of executives to keep jobs in the U.S. is putting free-market conservatives in an awkward spot after they fought the Obama administration on other government intervention in business. Now, the fate of an agency that conservatives have fought to close over the past year because they say it is an example of the government picking winners and losers—the U.S. Export-Import Bank—will rest in Mr. Trump’s hands. Ex-Im Bank supporters are already using Mr. Trump’s early moves to build their case. The president-elect’s emerging industrial policy—seen last week when he touted Carrier Corp.’s agreement to keep 800 manufacturing jobs in Indiana in exchange for some tax credits—would appear at odds with conservative opposition that has weakened the bank over the past year, amid charges of “crony capitalism.” Congress recently rejected an amendment that would allow US Ex-Im to function without a full board. However, the news that senator Richard Shelby – who has blocked new nominations to the board – has termed out as senate banking committee chairman bodes well for the ECA, as a new pro-Exim replacement is set to start on 3 January.

  • (Pueget Sound Business Journal, Seattle, 2 December 2016) Boeing CEO Dennis Muilenburg urged the new Republican administration of President-elect Donald Trump to preserve and reopen, not abolish the U.S. government's Export-Import Bank. Muilenburg said if Trump gets rid of the Ex-Im Bank, as he vowed to during the 2016 election campaign, Chicago-based Boeing (NYSE: BA), a maker of commercial and military jet aircraft, will lose foreign customers — and big contracts — to rivals in other countries, including Airbus.

  • (OECD, Paris, 10 October 2016) The OECD ECG has produced a broad stroke two year old sectoral overview of OECD member ECAs activities which is not linked on its "latest documents" page, but can be found well down its home page under "statistics". The most recent highly redacted minutes of the Export Credit Working Group available on their web site are dated April 15, 2011 and no link to them is available via their home page. The lists of Category A & B projects for the period 2005 to 2014 are missing data for 2011 & 2012.

  • (Live Trading News, Singapore, 16 Decembber 2016) Dubai is working with HSBC on the financing of Expo 2020 Dubai, a $7-B exhibition centre project expected to attract 25-M visitors, sources familiar with the matter said. The financing will come from bank loans and from various export credit agencies, the sources said. HSBC has been appointed to coordinate the export credit agencies and financing supported by them, the sources said, adding that the split between the commercial loans and the export credit financing was yet to be defined.

  • (Kyiv Post, Kyiv, 21 December 016) The bill No. 2142a providing for the aggressive exports expansion of Ukrainian manufacturers via insuring, guaranteeing and cheapening of exports crediting was passed at second reading late on Tuesday, Dec. 21, by 237 lawmakers. According to the document, Ukraine’s Cabinet of Ministers creates the export-credit agency to stimulate exports of Ukrainian goods, labor and services. The agency will insure, reinsure exports on a voluntary basis and will secure contracts aimed at developing exports. The agency will participate in the implementation of the program to partially compensate the rates for exports credits.

  • (Space News, Congers NY, 22 December 2016) Spacecom is buying its newest spacecraft from an American supplier without relying on financial support from the Export-Import Bank of the United States, according to a company official. Amos-17 is the first satellite Spacecom has bought from a U.S. supplier. The order comes during a vexing time for U.S. satellite builders trying to sell abroad. The U.S. Ex-Im Bank, a frequently-used source of below-market financing for satellite deals, was closed to new business for nearly half of 2015.

  • (Nikkei Asian Review, Tokyo, 12 December 2016) Japan's Sumitomo Mitsui Banking and the Japan Bank for International Cooperation will jointly launch a new scheme to provide loans for small to midsize Russian businesses via Alfa-Bank. Japanese export credit agency Nippon Export and Investment Insurance (NEXI) will back up the creditworthiness of the Russian lender. Despite being a major private lender in Russia, Alfa bank's credit profile, including total asset size, is much lower than state-backed lenders. NEXI will provide guarantees in order for Japanese banks to avoid the risk of possible bad loans. The total loan amount is expected to reach hundreds of millions of dollars.

  • (Daily Record, Edinburgh, 21 December 2016)  With the falling value of the pound making UK goods more competitive on the world stage, the environment for Scottish businesses looking to trade internationally is arguably more positive than for many years. According to a recent business survey by Grant Thornton, confidence among firms that their exports will rise has more than doubled in the wake of sterling’s steep fall. UK Export Finance (UKEF) - the UK’s export credit agency which operates through a network of advisers including two based in Scotland - aims to bridge the gap by offering insurance to exporters and guarantees to banks to share the risks of providing export finance.

  • (Mehr News Tehran, 24 December 2016) Iran always has been considered as an eye-catching and money-spinning market for several European countries like Germany offering not only 80 million people it has but also a 400-million-people marketplace it can provide access to. Following the termination of the nuclear deal between Iran and great powers, officially known as the Joint Comprehensive Plan of Action (JCPOA), the European Union countries, Germany in particular, are trying to foster their economic cooperation with the Islamic Republic. For decades before sanctions were imposed, Germany, which enjoys the largest economy in Europe with a nominal gross domestic product in 2016 of $3.5 trillion, was Iran’s major trading partner.