Index for May 2022

Volume 21, Issue 5

  • (Banktrack, Nijmegen, 20 May 2022) The coalition to #StopEACOP celebrates this week’s news that five banks including Deutsche Bank, Citi, JPMorgan Chase, Wells Fargo and Morgan Stanley have confirmed they will not join the project loan to finance the East African Crude Oil Pipeline (EACOP). They are joined by the insurer Beazley Group and the Italian export credit agency SACE. This takes the number of banks that want nothing to do with the EACOP project loan to 20 and the number of insurers to eight. The list of banks rejecting the project includes seven of Total’s ten largest lenders. However Eacop's executives from the Ugandan government and oil companies remained confident that the financing package for the project will be tied up in two months.

  • (Global Trade Review, London, 25 May 2022) A South Korean court has dismissed an application by traditional owners in Australia for an injunction to prevent South Korean public finance institutions from supporting a proposed gas export project. Representatives of the Tiwi Islander and Larrakia indigenous peoples in northern Australia launched legal proceedings in March to stop the South Korea Export-Import Bank (Kexim) and export credit insurer K-Sure from extending A$964mn (US$725mn) in financing and insurance to the Barossa gas project. But this week Seoul’s Central District Court threw out the application,

  • (UN Human Rights Office, Geneva, 6 May 2022) Michelle Bachelet, UN High Commissioner for Human Rights, recommends how to improve human rights impacts of global supply chains, as requested by the German Presidency of the G7. She noted that achieving sustainable supply chains will also require integration of international standards on responsible business conduct across investment and trade policy. Export credit agencies and export-import banks for example are key players involved in supporting parts of global supply chain operations. Yet their lack of multilateral engagement in recent years has had a negative impact on their capacity to update and align their standards either to the UNGPs or to high-level commitments made by their own governments. Improving the human rights performance of export credit agencies is an important lever for fostering sustainable supply chains. As an obvious first step, governments should heighten the obligations of the Export Credit Group’s Recommendation on Common Approaches regarding human rights and international standards on responsible business conduct. Accelerating efforts to advance implementation of the UN Guiding Principles on Business and Human Rights (UNGPs) in global supply chains is a crucial step forward to do this.

  • (Institute of Export and International Trade, London, 18 May 2022) UK International trade secretary Anne-Marie Trevelyan has said green trade is central to growing the UK’s economy, achieving net zero and driving prosperity, as well as “De-Putinising” the global economy by cutting reliance on Russian oil and gas. Trevelyan said the Ukraine conflict underlined the need to phase out imports of Russian oil and gas, adding “These past months have highlighted the need to accelerate our journey as a global community away from hydrocarbons. To decisively turn our backs on the era of dependence on polluting fuels, and transition to a net zero future.” The minister also announced two new ‘green’ deals for British exporters to be delivered by UKEF, a £138m loan guarantee for electric power manufacturer Megger and a £50m sustainability-linked loan to construction company Mace.

  • (Global Trade Review, London, 18 May 2022) A more stable trade environment helped generate US$117.7bn in new medium to long-term trade credit insurance business in the second half of 2021, according to freshly released data, although soaring inflation threatens to undercut the bounce back. A data snapshot released by the Berne Union, the export credit industry association, shows the medium to long-term sector beginning to rebound from the pandemic, with the US$117bn of new business representing growth of 13% compared to the same period in 2020, but still 12% down on pre-pandemic levels. Short-term trade credit insurance has also notched up continuous growth – rising 14% on the second half of 2019 and 12% on the second half of 2020 to US$2.45 trillion. In a statement released following its spring meetings in Istanbul, the Berne Union says that growth of 12% across all trade insurance types in the second half of 2021, compared to the same period in 2020, is “somewhat complicated” by the gradual rise in inflation last year, in addition to “fluctuating” exchange rates.

  • (Oil Change International, Washington, 19 May 2022) Today, 122 civil society groups are releasing letters to eleven government signatories to the Glasgow Statement on International Public Support for the Clean Energy Transition, laying out the actions they must take as soon as possible to meet their commitment. In their joint statement at COP26, 35 countries and 5 public finance institutions committed to end their international public finance for ‘unabated’ fossil fuels by the end of 2022, and instead prioritise their “support fully towards the clean energy transition.” The Glasgow Statement has the potential to directly shift at least USD $24 billion a year in influential trade and development finance from governments away from oil, gas, and coal. The $24 billion per year quoted above is from the open-access Public Finance for Energy Database (, a project of Oil Change International. ECAs are consistently the worst public finance actors for the climate, providing 11 times more support for fossil fuels than renewable energy in 2018-2020.

  • (Yahoo Finance, 2 May 2022) Boeing has released their 2022 Commercial Aircraft Financing Market Outlook (CAFMO) showing improving financing stability as the industry recovers from the impacts of the global pandemic. For the second consecutive year, 100% of Boeing deliveries were financed by third parties, with the top sources of delivery funding coming from cash, capital markets and sale leasebacks. ECA supported financing for Boeing aircraft contributed about 5% of total funding last year, primarily by the Export-Import Bank of the United States and with one deal supported by UK Export Finance. The Boeing 2021 Commercial Market Outlook, a separate annual 20-year forecast addressing the market for commercial airplanes and services, projects that through 2040 there will be demand more than 43,500 new airplanes valued at $7.2 trillion.

  • (Paris Beacon-News, Paris, 5 May 2022) Price Waterhouse Coopers (PWC) will carry out the external audit of the 2021 financial statements of the state company Petroperú in an effort to recover the confidence of creditors, bondholders, banks and risk rating agencies and hopefully allow negotiation of a request for consent from bondholders and the Spanish Export Credit News (CESCE) to reschedule presentation of last year’s financial statements. CESCE granted PetroPeru a loan of US$1,300 million in 2018 for the modernization of the Talara refinery and, a year earlier, Petroperú placed US$2,000 million in bonds in international debt markets to finance the same project, which has started performance tests last April. The recent PetroPeru crisis led debt rating agencies Standard & Poor’s and Fitch to reduce Petroperú’s credit rating due to a lack of financial transparency, exacerbated by the delay in having last year’s financial statements audited. Petroperu was downgraded earlier this month to junk by credit agencies after accounting firm PwC declined to audit the company's financial statements in the middle of a corporate governance crisis in which Petroperu's previous CEO Hugo Chavez resigned on amid allegations that he had improperly hired a company to provide him with personal security and people were saying audit firms did not feel comfortable enough to audit Petroperu while Chavez was in charge. On top of this, PetroPeru is demanding compensation of up to $34.5 million from the Spanish oil giant Repsol after freak waves from a volcanic eruption near Tonga caused an oil spill described as the worst ecological disaster to hit Peru in recent history, claiming that Repsol's Pampilla refinery “apparently” did not have a contingency plan for an oil spill.

  • (European Commission, Brussels, 4 May 2022) The European Commission has approved, under EU State aid rules, the reintroduction of a Danish short-term export credit scheme. Under the scheme, the Danish State can cover risks of single export transactions. The scheme was originally approved in April 2013, prolonged in December 2015 and expired in December 2020. In February 2022, Denmark notified its intention to reintroduce the scheme, which will run until 31 December 2025. The Commission found that the measure is necessary, as there is a lack of private insurers covering single export transactions (i.e. insurance provided on a transaction-by-transaction basis rather than on the entire export portfolio of a company)

  • (Gulf Today, Dubai, 15 May 2022) Massimo Falcioni, CEO of Etihad Credit Insurance (ECI), the official export support agency of the United Arab Emirates (UAE), welcomed Sheikh Mohamed Bin Zayed Al Nahyan’s election as the Crown Prince of Abu Dhabi and his role in steering the UAE economy towards independence from oil. In this process, Greek and Turkish ECAs have recently signed cooperation agreements with Etihad Credit. Greece, keen to attract investment from the UAE, has agreed to create a €4 billion ($4.22bn) initiative to invest in the Greek economy during a visit by Greek premier Kyriakos Mitsotakis to Abu Dhabi on May 9th. Last year, the countries’ official export credit agencies signed an agreement to boost bilateral trade. In 2020, the two states inked a foreign policy and defense cooperation deal. A cooperation agreement has also been signed between Türk Eximbank and ECI The signing of the deal occurred amid the 2022 spring meeting in Istanbul of the International Association of Export Credits and Investment Insurers, also known as Berne Union, of which Türk Eximbank became a member in 1994. The said agreement aims to provide co-financing for projects involved in the export of goods and services in both countries, as well as sharing information between institutions.

  • (Globe & Mail, Toronto, 2 May 2022) Export Development Canada has agreed to partly guarantee $1-billion of loans which the Bank of Montreal plans to make to companies in carbon-intensive industries in order to help them lower their emissions, reducing the risks of the bank’s foray into funding an urgent but uncertain energy transition. The three-year guarantee agreement will provide financing for medium-to-large-sized Canadian companies, rather than the largest corporate entities, which have easier access to capital. EDC will guarantee up to half of BMO’s term loans to a maximum of US$60-million per borrower for up to seven years. It is an early result of a federal effort to help reduce the risks of funding investments in early-stage technologies that could be crucial to cutting greenhouse-gas emissions, such as carbon capture or hydrogen fuel.

  • (Live Mint, India, 5 May 2022) As much as 70–80% of the payments for goods that were shipped to Russia before the Ukraine war have been coming in, a government official privy to the matter told Mint, comforting exporters. Exporters had claimed that about $500 million in payments were stuck after the war began in February. Stuck dues had become a pain point for Indian exporters, especially after Russia was cut off from the SWIFT payment gateway. In FY21 India’s exports to Russia stood at $2.6 billion, while imports were $5.5 billion. A number of exporters told Mint that those shipping goods to Russia were not being uniformly given insurance cover, which is provided by the state-owned Export Credit Guarantee Corporation, compounding their problems.

  • (Business Mirror, Makati City, 25 May 2022) SAN Miguel Corp. on Wednesday said it received support for the P740-billion (US$14 billion) new Manila International Airport (NMIA) project in Bulacan following the approval of the Dutch government, represented by Atradius Dutch State Business (DSB) of export credit insurance to Royal Boskalis Westminster N.V., to cover its 1.5-billion euro contract for land development works at the airport project site in Bulakan, Bulacan. The approval comes after more than a year of “rigorous” review of the project’s long-term environmental and social impact mitigation measures to ensure that the multi-billion project is done with sustainability in mind and aligned with the country’s climate ambitions. It is the largest export credit agency insurance policy granted in the 90-year history of Atradius. The airport project will feature four parallel runways, a terminal and an interlinked infrastructure network that includes expressways and railways.

  • (This Day, Lagos, 8 May 2022) Amidst the present administration’s current efforts aimed at diversifying the base of the Nigerian economy from the perils of oil, the need to provide adequate funding and attention to the non-oil export sector cannot be over-emphasised. Analysts have contended that most of the economic challenges bedeviling the country could simply be addressed by boosting local production and strengthening its non-oil export potential. Abba Bello, Head of the Nigerian Export-Import Bank (NEXIM), notes that its Export Development Fund (EDF) had led to the processing of 442 Applications worth N461 billion and $43.69 million, out of which N214.65 billion had been approved while N153.03 billion had been disbursed to 101 beneficiaries, as well as approvals totaling N55.85 billion which were undergoing the pre-disbursement process. Bello said so far, $492.97 million and €1.17 million, translating into N196.32 billion, have been received as export proceeds from projects that have repatriated their income, while others are yet to complete the transaction circle, adding that many of the institutions supported by the bank now feature on the list of top 100 exporters published annually by the Central Bank of Nigeria (CBN). NEXIM Bank is further taking steps to position Nigerian exporters to benefit from the unfolding opportunities offered by AfCFTA (African Continental Free Trade Agreement), following the recent exit of Britain from the European Union and the prospects in other regions. The bank is therefore taking measures to increase its funding capacity towards boosting lending support thereby increasing foreign exchange earnings for the country and facilitating employment generation.