Welcome to ECA Watch

Export credit agences provide government-backed loans, guarantees and insurance to corporations working internationally in some of the most volatile, controversial and damaging industries on the planet.

Shrouded in mystery, ECAs provide financial backing for risky projects that might never otherwise get off the ground. They are a major source of national debt in developing countries.

ECA Watch is a network of NGOs from around the world. We come together to campaign for ECA reform - better transparency, accountability, and respect for environmental standards and human rights.

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What's New April 2019

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • European Commission consultation on short-term export credit rules
  • SNC-Lavalin insider's bribery allegations spark EDC probe
  • German parliament approves ECA supported sale of 6 heavy frigates to Egypt
  • EFIC Reform Puts Pacific ‘Step-Up' at Risk
  • India's Jet Airways delays payments to global lenders guaranteed by ExIm
  • Riyadh aims to counter Tehran’s influence with Iraq ECA credits
  • Iran's ECA Reassures Foreign Trade Partners
  • China gives Naftogaz $1 billion ECA guarantee
  • Eskom’s black hole of debt keeps on getting bigger
  • How Gujarat fishermen won US top court ruling against global funding
  • UAE ECA ECI voted as observer member of Berne Union
  • Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

European Commission consultation on short-term export credit rules

(UKIF, London, 30 Aprill 209) The European Commission is inviting relevant stakeholders to participate in a consultation on the short-term export-credit insurance Communication that is expiring at the end of 2020. The consultation is a backward-looking evaluation, to identify whether those rules should be prolonged in their current form or possibly updated. The deadline to submit contributions is 24 May 2019.

Respond to the survey.

Read the Commission communication to member states

https://www.gov.uk/government/news/european-commission-consultation-on-short-ter...


SNC-Lavalin insider's bribery allegations spark EDC probe

(CBC, Toronto, 3 April 2019) Export Development Canada has hired outside legal counsel to review some of its dealings with SNC-Lavalin. The review comes after a company insider told CBC News the engineering giant secured billions in loans from the Crown agency over the years, some of which he alleges was intended to pay bribes. EDC has denied knowledge of any improper payments, but last Friday said it is taking a closer look at a 2011 deal with SNC-Lavalin involving a $250-million project to refurbish the Matala hydroelectric dam in Angola. EDC has backed SNC-Lavalin projects in 19 countries since 1995. In 2012 the head of SNC-Lavalin's construction division was arrested in Switzerland for bribery in Libya. The sheer size of "technical fees" which could total as much as 10% of a project's overall budget should have raised flags. In 2013 the CBC and the Globe and Mail exposed secret payments for projects in Africa, India, Cambodia and Kazakhstan.

https://www.cbc.ca/news/canada/snc-lavalin-export-development-canada-loans-1.507...


German parliament approves ECA supported sale of 6 heavy frigates to Egypt

(Middle East Monitor, London , 5 April 2019) The German Parliament Budget Committee has approved export credit guarantees to secure the sale of six heavy frigates worth €2.3 billion (US$2 billion) to Egypt from ThyssenKrupp Marine Systems. The ships can be supplied with weapons including guided missiles and torpedoes. Green Party Budget expert, Tobias Lindner, criticised the deal and highlighted Egypt’s human rights record. “The government’s arms export policy is becoming increasingly contradictory,” Lindner told Bild, adding that “people have been fighting for weeks against weapons deliveries to Saudi Arabia, while at the same time wanting to deliver frigates to the military dictatorship in Egypt.”

https://www.middleeastmonitor.com/20190405-german-parliament-approves-sale-of-6-...


EFIC Reform Puts Pacific ‘Step-Up' at Risk

(Australian Council for International Development, Canberra, 14 Feb, 2019) ACFID has raised concerns about reform to Australia’s export credit agency - EFIC - as part of the Australian Government’s Pacific ‘step-up’ and is calling for the legislation to be referred to a parliamentary committee for scrutiny. The Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019 introduced to the House of Representatives proposes reform to EFIC so it can administer $1.2bn in callable capital to finance Australian businesses to build infrastructure overseas. The increase for EFIC from $200m to $1.2bn in callable capital and the Minister’s statement that EFIC will assist in administering loans for the Australian Infrastructure Financing Facility (AIFFP) is cause for concern. ACFID stressed that it is untenable to have $1.2bn of taxpayers’ funding being used for Australian businesses without transparency in its delivery and reporting. A financial scale-up without the relevant capabilities and expertise within EFIC, and the lack of transparency over how EFIC will interact with other Government departments, raises very serious concerns in the aid sector over the suitability of EFIC in holding such a central role in administering new loan-finance. DFAT reassured the Senate that there was no need for any such requirement since Efic has signed up to various OECD export credit guidelines, and will “carefully assess” any number of things to ensure that only good projects are selected, in particular the country’s capacity to repay the loan. [ECA Watch note: The OECD Arrangement's "gentlemans' agreement" and peer review process has not proven much of a deterrent to bad practice, as show by the many flaws and concerns raised here on the ECA Watch web site.]

https://acfid.asn.au/media-releases/efic-reform-puts-pacific-%E2%80%98step-risk-...


India's Jet Airways delays payments to global lenders guaranteed by ExIm

(Money Control, Mumbai, 8 April 2019) India's' cash-strapped Jet Airways has delayed repayments to global lenders, including Citibank, that funded the purchase of its Boeing 777 planes the Economic Times reported. The repayments, worth over $18 billion, were due at the end of March. The banks loaned funds to the carrier based on guarantees from the Export-Import (EXIM) Bank of the US, which can be invoked in case of a default. If a default occurs, it would be bad news for Jet as the US ECA would deregister and take back the planes. Almost two-thirds of Jet's fleet have been grounded due to non-payment of its dues.

https://www.moneycontrol.com/news/business/jet-airways-delays-payments-to-global...


Riyadh aims to counter Tehran’s influence with Iraq ECA credits

(Financial Times, Riyadh, 4 April 2019) Saudi Arabia is intensifying diplomatic efforts to boost ties with Iraq, as the kingdom aims to strengthen its influence on regional rival Iran’s doorstep. The kingdom’s harsh treatment of Shia clerics sparked demonstrations in Iraq, and many Iraqis blamed Saudi Arabia for fuelling hardline Sunni Islamist ideology that gave rise to the Isis extremist group. However, since 2016, Riyadh has taken a more nuanced view of Iraqi politics that aims at chipping away at Iranian influence by denying Tehran the sectarian card. Saudi officials arrived in the Iraqi capital this week, wielding a $1bn grant for a sports stadium. Last year the Saudis pledged a $1bn loan for reconstruction in Iraq, plus $500m in export credit.

https://www.ft.com/content/4e2a8558-56ef-11e9-91f9-b6515a54c5b1


Iran's ECA Reassures Foreign Trade Partners

(Financial Tribune, Tehran, 30 April 2019) CEO of the Export Guarantee Fund of Iran says the fund has taken special measures to shield exports from the negative impact of US sanctions. “In light of the new US sanctions and the fact that foreign traders do not receive Iranian bank [export] guarantees, the fund is willing and able to cover the commercial risks for exporters,” she noted. The EGFI said earlier that it wants to expand risk cover for export insurance by $2.5 billion in the current fiscal (started March 21) and increase the penetration rate of export guarantees.

https://financialtribune.com/articles/business-and-markets/97660/irans-eca-reass...


China gives Naftogaz $1 billion ECA guarantee

(Kyiv Post, Kyiv, 2 April 2019) China has been eyeing strategic investments and acquisitions across Ukraine for at least a year now – but a Chinese state-owned credit firm, Sinosure, appeared to up the stakes on April 2 as it inked a deal to provide $1 billion in insurance coverage to Ukrainian energy conglomerate Naftogaz. Naftogaz has said that the new Chinese insurance is essentially a financial guarantee on the company being able to attract debt financing and further direct investment from China. Naftogaz is the state-owned Ukrainian oil and gas monopoly that handles the extraction, refinement and transportation of natural gas and oil. Data shows that China might replace Russia as Ukraine’s largest single-nation trading partner if growth rates in bilateral commerce between the two countries remain steady or increase. Ukraine’s Western and NATO allies, especially Japan, the United States and the United Kingdom have expressed strong concerns about China’s interest in Ukraine – they warn that investments are largely driven by Chinese self-interest and could pose a security threat to the alliance and Ukraine.

https://www.kyivpost.com/business/china-gives-naftogaz-1-billion-guarantee-on-de...


Eskom’s black hole of debt keeps on getting bigger

(The Citizen, Johannesburg, 3 April 2019) Moody’s credit opinion issued yesterday on the heels of its recent decision to keep South Africa’s credit rating one level above junk, said elevated government debt and contingent liabilities risks from state-owned enterprises (SOEs), limited government’s ability to absorb shocks. The note came after Eskom’s announcement of a R2.5 billion loan from the New Development Bank in China on top of the R420 billion (US$29 billion) debt it’s already carrying, and there’s no say when the 670 MW of renewable energy it’s meant for, will come on line. Export credit agency finance is one of the sources Eskom is tapping as part of its R300 billion (US$21 billion) funding plan for the new build programme. More than three quarters of that funding has now been secured. On May 30, 2011, the Export Import Bank of the United States had loaned about R5.7 billion, adding at the time to “the R31 billion (US$2.2 billion) in export credit agency backed finance Eskom had already raised.

https://citizen.co.za/business/business-news/2110845/eskoms-black-hole-of-debt-k...


How Gujarat fishermen won US top court ruling against global funding

(Indian Express, Ahmedabad, 10 April 2019) On February 27, the US Supreme Court ruled in favour of a group of fishermen and a Gujarat village panchayat in a suit against the US-headquartered International Finance Corporation (IFC). The case, which now goes back to a US district court, relates to alleged pollution caused by a Gujarat-based power plant partly funded by IFC and Korean ECA KEXIM. Of the estimated project cost of $4.14 billion, $450 million was funded in 2008 by IFC, the Asian Development Bank advanced $450 million as loan, the Export Credit Agency of Korea extended another $800 million as loan, and CGPL raised around Rs 1.5 billion from Indian banks through debt. According to National Fish Worker’s Forum, a nationwide federation of fishermen organisations, the plant operates a cooling technology that requires much more water than the system it got clearance for. The water is eventually discharged into the sea, and the complainants have alleged that it has affected marine life. Budha Jam, leader of the fishermen community of Tragadi-Nal, says: “With marine life near the coast affected, we are forced to sail farther in search of fish. They also dredged the coast and seafloor for their outfall channel and deposited sand near a well, which was a source of drinking water. Water in the well has turned saline since.” Complainants add that coal dust and fly-ash from the plant are damaging date palms and chikoo trees in Navinal. [One wonders how KEXIM's adherence to the OECD's Common Approaches could have allowed this.]

https://indianexpress.com/article/explained/how-gujarat-fishermen-won-us-top-cou...


UAE ECA ECI voted as observer member of Berne Union

(Times of Oman, Muscat, 28 April 2019) Etihad Credit Insurance (ECI), the UAE Federal credit insurance company, was voted in as an observer member of the Berne Union, a renowned global association that represents the global export credit and investment insurance industry. In 2018,Berne Union members delivered US$2.5 trillion of payment risk protection to banking institutions, exporters and investors which is equivalent to 13 per cent of total cross-border merchandise trade.

https://timesofoman.com/article/1208694/Business/Economy/ECI-voted-as-observer-m...


Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

(ABC, Sydney, 4 April 2019) Hundreds of Australian and New Zealand cattle have died in a Federal Government-backed export deal with Sri Lanka, which local farmers say has left them broke, and in some cases, suicidal. Farmers and animal rights groups, as well as Sri Lanka's own auditor-general, want the export project stopped because they say it is poorly planned and inhumane. Angry Sri Lankan farmers have told the ABC the "high-yielding, pregnant dairy cows" they were promised were overpriced, unhealthy and infertile. Sri Lankan business consultant Mohammed Mausook Riyal, adding that the cows were the wrong breed for the climate, making them susceptible to disease, and farmers could not make a profit because of poor milk yield and low conception rates. Under the terms of the $100 million project, underwritten by the Australian Government's export credit agency, EFIC, the exporter, Wellard, was required to provide Sri Lankan farmers with facilities, training and veterinary support.

https://www.abc.net.au/news/2019-04-04/australian-dairy-cattle-sent-to-sri-lanka...


What's New March 2019

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • The smart money is jumping the sinking coal ship
  • New OECD Bribery and Export Credits Recommendation
  • NAM Urges Senate to Get Ex-Im Bank Back Up and Running
  • Levelling the playing field: UK exporters want more
  • WTO says U.S. failed to halt state tax subsidy for Boeing
  • Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers
  • Kenya 'inflated' SACE loans insurance cost by Sh10 billion
  • Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects
  • EU exemption on export credits: is everyone a winner?
  • East Africa: China to Host Second Belt and Road Forum
  • EX-IM Hosts 2019 Annual Conference in Washington, D.C.

The smart money is jumping the sinking coal ship

(Thomson Reuters Foundation, London, 1 March 2019) A torrent of banks and other financiers are shifting their money out of coal as investment risks in it grow. We have only 12 years left to save the planet from devastating climate change, the Intergovernmental Panel on Climate Change warned last October. With important governments missing in action, financial institutions have now emerged as unlikely allies of climate activists. In recent months banks and other financiers have pulled out of the coal and other fossil fuel sectors. The World Bank was the first major financial institution to end lending for most coal projects in 2013. Six year later the trickle is turning into a torrent. According to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), more than 100 banks, pension funds, insurance companies, asset managers, development banks and export credit agencies with assets of at least $10 billion each have by now adopted some kind of coal restrictions.

http://news.trust.org//item/20190301103215-pgnh7/


New OECD Bribery and Export Credits Recommendation

(OECD, Paris, 27 March 2019) With the adoption of the revised Recommendation of the Council on Bribery and Officially Supported Export Credits (OECD/LEGAL/0447) in 2019, ECG Members and other non-Members that have adhered to the Recommendation (hereafter, the “Adherents”) are demonstrating their continued commitment to take appropriate measures to deter bribery in the export transactions that they support. Implementation of the revised Recommendation will be monitored via surveys of the measures that Export Credit Agencies have put in place to combat bribery and will be supported by regular workshops to consider best practices, relevant international developments and evolving business practices. [The OECD Recommendations are not legally binding and rely only on moral force. OECD reporting on surveys and internal "monitoring" have fallen short of expectiations by international NGO corruption monitors.]

http://www.oecd.org/trade/topics/export-credits/bribery-and-export-credits/


NAM Urges Senate to Get Ex-Im Bank Back Up and Running

(National Association of Manufacturers, Washington, 8 March 2019) Securing a level playing field internationally [i.e. matching corporate subsidies] is vital to manufacturers in the United States, which already export about half their production, supporting millions of workers across the country. While there’s been a lot of focus on foreign barriers that impede U.S. exports, one of the most concerning problems is of our own making: the Senate’s failure to confirm nominees to the Board of Directors of the U.S. Export-Import Bank. Without these nominees, the Ex-Im Bank cannot even consider major deals over $10 million or even act on the reforms that Congress set out it when it last reauthorized the bank in 2015. With the Ex-Im Bank severely weakened, manufacturers in the United States are losing sales to foreign competitors who are backed up by nearly 100 other export credit agencies around the world. For example, China’s two Export Credit Agencies routinely help their companies out-muscle their U.S. rivals. Last year, China provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. According to the National Association of Manufacturer’s estimates, manufacturers lost at least $119 billion in manufacturing output, translating into 80,000 fewer manufacturing jobs in 2016 and 2017 as a result of an inactive Bank.

https://www.shopfloor.org/2019/03/senate-ex-im-bank/


Levelling the playing field: UK exporters want more

(Global Trade Review, London, 13 March 2019) Excluded from many projects in countries under IMF bailout programmes, UK exporters are calling for a trade and aid link in African infrastructure and a rewrite of OECD guidelines that bind export credit agencies. The support is good but UK exporters want more. Some of the most lucrative public sector projects in Africa are out of their reach because of IMF rules on borrowing for Africa’s 30 heavily indebted, poor countries. If a country has reached its borrowing limit, it can’t borrow anymore unless 35% of that debt is concessional or has a grant element. Infrastructure groups say they could win much more business if the UK’s department for international development (DfID) was prepared to link some of its annual £13bn foreign aid budget with export credit. For UK exporters it is never enough. UKEF financing, albeit with long tenors and flexible terms, isn’t concessional. It’s never been part of the ECA’s remit to provide concessional export credit finance and the grant element of a loan can only come from the UK’s development agency. Unlike other OECD countries such as Japan, South Korea, Italy and France where their ECAs combine loans with a grant or aid element, DfID doesn’t want its budget or support linked to UK companies bidding for infrastructure projects.

https://www.gtreview.com/supplements/gtr-uk-2019/levelling-playing-field-uk-expo...


WTO says U.S. failed to halt state tax subsidy for Boeing

Reuters, Geneva/Paris, 28 March 2019) The World Trade Organization said on Thursday the United States had ignored its request to halt a subsidized tax break for Boeing Co in its main plane-making state of Washington as a 15-year-old transatlantic trade row edges towards tit-for-tat sanctions. The European Union said the WTO appeal ruling had vindicated its claims that Boeing continued to receive illegal subsidies, but the United States said only one measure, a Washington state tax break worth around $100 million annually, had been found still to violate the rules. A 2018 ruling by the WTO already found that the EU was also failing to stop its own illegal subsidies for Europe's Airbus. Washington has since claimed an unspecified amount in damages and a WTO mediator is still examining this claim. The "Bank of Boeing" is what critics sneeringly call the Export-Import Bank of the United States, a federal agency that provides low-cost loan guarantees that help companies, including Boeing, expand and compete internationally.

https://www.reuters.com/article/us-eu-usa-aircraft-wto/wto-says-u-s-failed-to-ha...


Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers

(Globe & Mail, Toronto, 26 March 2019) Senior federal officials sought to warn Canada’s export agency that it had suffered “significant” risk to its reputation because of its US$41-million loan to the controversial Gupta brothers who were at the heart of a South African corruption scandal, internal documents show. The documents, obtained by The Globe and Mail under federal access laws, show that Global Affairs Canada wanted an explanation of the risky loan from the federal agency, Export Development Canada, during a planned meeting in March, 2018, where the Gupta deal was scheduled to be a top agenda item. Canada's export agency was aware of allegations against South Africa's controversial Gupta family for the past five years, yet it went ahead with a US$41-million loan to the Guptas anyway, a lawyer for the family says. After a year of legal battles, Canada’s export agency has won the right to sell a notorious Canadian-funded airplane that played a highly visible role in the corruption scandal that toppled South Africa’s former president, Jacob Zuma.

https://www.theglobeandmail.com/world/article-senior-federal-officials-tried-to-...


Kenya 'inflated' SACE loans insurance cost by Sh10 billion

(Standard Media, Nairobi, 7 March 2019) The Government of Kenya paid Sh10 billion to insure the loans taken for construction of the controversial Arror and Kimwarer dams, but industry experts argue the cost should not have exceeded Sh1 billion. Italian insurer SACE was paid Sh11.1 billion [94.2 million Euros] as premium for the loan, but a reputable firm that offers products on sovereign loans argues the much it would have charged was Sh750 million. In essence, going by arguments by local industry experts, Kenya paid 15 times over the fair rate to the Italian government-owned credit insurer for insuring the loans procured from a consortium of banks led by Intesa San Paolo. It would be a subject of interest for investigators to determine why SACE charged 17.5 per cent of the loan amount as premium, against industry rates averaging 1.5 per cent.

https://www.standardmedia.co.ke/article/2001315555/state-inflated-loan-insurance...


Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects

(Sydney Morning Herald, Sydney, 5 March 2019) A major oil and gas company wants Australian taxpayer money spent on overseas energy projects, stoking fears that a Morrison government plan to boost development in the Pacific is a smokescreen for fossil fuel investment. A government amendment to the operation of its export credit agency, the Export Finance and Insurance Corporation, quietly passed Parliament's lower house with support from Labor last month. It is now being considered by a Senate committee. A submission to the Senate inquiry by Papua New Guinean oil and gas company Oil Search suggests fossil fuel projects may be lining up for funding under the proposed laws. The government bill would add $1 billion to the finance corporation's existing $200 million calling capital and broaden the national interest test for investment decisions. The Coalition and Labor combined to defeat an amendment to the bill proposed by Greens MP Adam Bandt that would have barred the corporation from facilitating thermal coal exports. Mr Bandt, the party’s climate change and energy spokesman, said the bill would “expand Australia’s fossil fuel exports at taxpayer expense”.

https://www.smh.com.au/politics/federal/foreign-energy-giant-wants-australia-to-...


EU exemption on export credits: is everyone a winner?

(Global Trade Review, London, 13 March 2019) Europe to exempt export credits from banks’ leverage ratios have been received positively, but is this good news for all export finance banks? Last month, EU ambassadors endorsed the capital requirements regulation adjustment package, including an exemption for export credits from the leverage ratio. On the face of it, this should resolve a long-standing headache for export finance banks, who would suffer under Basel III due to a lack of an exemption from the leverage ratio calculation from the export credit agency (ECA)-backed portion of any transaction, despite the near-zero credit risk of an ECA. After years of advocacy by the European Banking Federation (EBF) export credit working group, the ICC global export finance committee and the ICC regulatory advocacy committee, along with support from the Berne Union, various European ECAs and national banking associations, the export finance community can now claim a victory. In practice, this will mean the traditionally low-risk business of export finance should become more attractive for banks, bringing much-needed liquidity to the market. Former EBF export credit working group chair, Henri d’Ambrières, tells GTR that a reluctance on the part of EU regulators to go further with this regulation could mean some exporters may be put at a disadvantage. This could lead to Spanish exporters losing competitiveness against their German counterparts in markets such as Latin America. The two countries jointly account for 40% of all EU exports to the region, and compete in areas such as capital goods for Latin America’s booming renewable power sector – usually purchased in dollars.

https://www.gtreview.com/news/europe/eu-exemption-on-export-credits-is-everyone-...


East Africa: China to Host Second Belt and Road Forum

(The East African, Nairobi, 6 March 2019) China will host its second Belt and Road Initiative (BRI) forum later this year, in its push to link the country by sea and land through an infrastructure network with Asia, the Middle East, Africa and Europe. The initiative launched by President Xi in 2013 seeks to strengthen Chinese global dominance through more than $1 trillion investment in infrastructure. In Africa, China invests majorly on transport and energy with Nigeria, Angola, Ethiopia, Kenya and Zambia among the largest partners in the BRI. In 2018, President Xi, during the Beijing Summit of the Forum on China Africa Cooperation (FOCAC), pledged $60 billion in financial support to Africa as part of the country's engagement with the continent in the next three years.

https://www.theeastafrican.co.ke/business/China-to-host-second-Belt-and-Road-for...


EX-IM Hosts 2019 Annual Conference in Washington, D.C.

Business Wire, Washington, 28 March 2019) Leaders of government, business, and academia will address the 2019 Annual Conference of the Export-Import Bank of the United States (EXIM) that held on Thursday and Friday, March 28-29, 2019, at the Omni Shoreham Hotel in Washington, D.C. The conference agenda as of March 27th is outlined here.

https://www.exim.gov/events/annual-conferences/2019/agenda


What's New February 2019

What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans
  • Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries
  • Are ECAs liable for funding of slavery tainted enterprises?
  • With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark
  • German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk
  • EDC insured Suncor’s Middle East misadventures
  • Australia’s ECA eyes overseas investment with potential new mandate
  • Jaguar Land Rover seeking ECA funding after huge write-down
  • Japanese and French ECAs to finance Turkey's second nuclear plant
  • Kuwait Conference pledges billions for Iraqi reconstruction
  • Bahrain talking to U.S. oil companies about tight oil deal
  • Finnvera Group’s Board Report and Financial Statements for 2018

SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans

(Above Ground, Ottawa, 22 February 2019) Following reports that engineering giant SNC-Lavalin lobbied federal officials intensively in the lead-up to its criminal prosecution on corruption charges, public attention has been brought to the hundreds of millions in government loans the company has received in recent years. The Globe and Mail reported last week that Export Development Canada (EDC) has provided at least $800-million and as much as $1.7-billion in loans to SNC-Lavalin since 2011, when news broke that the firm was under investigation by the RCMP. Some of those loans were approved after the World Bank announced in 2013 that SNC-Lavalin was barred from bidding on its projects until 2023 due to corruption, and after criminal charges were laid in Canada. As we noted in our recent submission to the government urging stricter oversight of Export Development Canada, SNC-Lavalin is just one of several EDC clients to face corruption investigations, charges or sanctions in recent years. (Others include Bombardier, Kinross Gold and Brookfield.)

https://aboveground.ngo/news-media/media-coverage/


Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries

(Guardian, London, 24 February 2019) Former UN Secretary General Ban Ki-moon has urged Britain to stop funding fossil fuel projects overseas, in what he said would mark a test of Theresa May’s commitment to act on climate change. The former UN secretary general said he was deeply concerned that the UK’s export credit agency had provided billions of pounds in recent years to support businesses involved in oil and gas schemes around the world. “These figures and policies are hard to reconcile with the UK’s commitments under the Paris agreement,” said Ban, referring to the international climate deal he forged in 2015 as UN Chief. “The time has come for the UK to change course, in the interests of the whole world,” he wrote in a comment for the Guardian. The UK Environmental Audit Committee is currently investigating the scale and impact of UK Export Finance’s financing of fossil fuels in developing countries.

https://www.theguardian.com/environment/2019/feb/24/ban-ki-moon-britain-stop-inv...


Are ECAs liable for funding of slavery tainted enterprises?

(20 Essex Street, London, 2 February 2019) A recent UN report with recommendations to advance efforts to eradicate modern slavery has mentioned, amongst other examples, the direct or indirect involvement of a state in the commission of offences via ECA funding of slavery-tainted enterprises. For example, the Guardian has reported that the US Export Import Bank provided $315m in taxpayer-supported financing over the past decade to a company that has supplied equipment to African mines accused of slave labor, human rights violations and environmental destruction. The Eritrean mine is being investigated by a Canadian court.

https://www.20essexst.com/news/dr-philippa-webb-releases-report-modern-slavery-u...


With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark

(Above Ground, Ottawa, 12 February 2019) In January Export Development Canada (EDC) released a new climate change policy. The policy commits EDC to further limit its coal-related investments and increase its support for clean technologies. It does not, however, put in place a clear path to reducing – let alone phasing out – the billions of dollars of support that EDC provides to the oil and gas sector each year. EDC’s support for fossil fuel companies is fundamentally at odds with Canada’s international obligations on climate change. To address this contradiction, last year more than a dozen civil society groups including Above Ground recommended that EDC phase out its support for coal, oil and gas projects; companies significantly reliant on coal; and companies whose primary business is in coal, oil or gas. We also recommended that EDC commit to achieving a sharp reduction in GHG emissions across its business portfolio. Instead, EDC has renewed its commitment to support carbon-intense sectors, including the oil and gas industry.

https://aboveground.ngo/edc-new-climate-change-policy-falls-short/


German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk

(Reuters, Frankfurt, 8 February 2019) German banks are seeking to blunt any fresh U.S. sanctions against Russia so they can continue existing business with Russian clients, according to an internal briefing paper prepared by a financial industry lobby group. The risk of new restrictions on doing business with Russia has risen since the Democratic Party won control of the U.S. House of Representatives. New anti-Moscow measures could jeopardise funding for a 9.5 billion euro gas pipeline which seeks to channel gas from Russia directly to Germany under the Baltic Sea. "Nord Stream is the elephant in the room," said one person with direct knowledge of the matter. Russian news agency TASS quoted Nord Stream 2’s finance chief Paul Corcoran saying it was in discussions with export credit agencies and wanted to raise around 6 billion euros. Last month, the U.S. Ambassador to Germany sent a letter to companies involved in Nord Stream warning that they could face sanctions if they stick with it.

https://www.euronews.com/2019/02/08/german-banks-manoeuvre-in-washington-to-temp...


EDC insured Suncor’s Middle East misadventures

(Globe & Mail, Toronto, 7 February 2019) The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011. On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims. Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. EDC declined to answer most of The Globe’s questions about the Suncor policy.

https://www.theglobeandmail.com/canada/article-federal-government-insured-suncor...


Australia’s ECA eyes overseas investment with potential new mandate

(Global Trade Review, London, 20 February 2019) Australia’s export credit agency, Export Finance and Insurance Corporation (Efic), could receive an A$1bn cash injection of callable capital, a mandate to finance larger overseas projects and a new name as part of a bill expected to pass in the house of representatives this week. The bill’s initial text highlights opportunities to invest in overseas infrastructure, such as telecommunications, energy, transport and water, throughout the Pacific region and further afield. The bill also includes a new name for the agency — Export Finance Australia. More specifically, the bill notes that the additional capital would allow the agency to continue to finance infrastructure projects in Papua New Guinea, which it described as “one of our most important neighbours”. Efic is currently involved in the PNG LNG project, a US$19bn investment scheme for the commercial development of the gas resources of Papua New Guinea. However, on its current budget, Efic is re-approaching its country lending limit for the southwestern Pacific island nation and it is only able to finance one additional project.

https://www.gtreview.com/news/asia/australias-eca-eyes-overseas-investment-with-...


Jaguar Land Rover seeking ECA funding after huge write-down

(Car Advice, Sydney, 11 February 2019) Jaguar Land Rover is seeking US$1 billion in funding after a disastrous fourth quarter of 2018, huge-write downs on the value of its investments, and continued sales struggles in China. According to a report from Automotive News Europe, the Indian-owned carmaker needs to raise US$1 billion ($1.4 billion) within the next 14 months to replace "maturing bonds" and fund the brand's expensive electric vehicle development program. Rather than borrowing from the bond market, the company is looking at bank financing, leasing its assets or tapping into export credit. Tata Motors announcing sales in China were down 35% in the final 3 quarters of 2018.

https://www.caradvice.com.au/725363/jaguar-land-rover-seeking-funding-after-huge...


Japanese and French ECAs to finance Turkey's second nuclear plant

(Daily Sabah, Istanbul, 25 February 2019) Turkey's second nuclear power plant to be built in Sinop under a Japanese-French partnership, will make a breakthrough by obtaining a ground license this year. The plant, which will have an installed capacity of 4,480 megawatts (MW) and consist of four reactors with a 1,120-MW capacity each, will cost $20 billion. The Japanese and Turkish governments agreed in 2013 on the project to be built with a Japanese-French consortium in the Black Sea province of Sinop. The bulk of the project would be financed by Nippon Export and Investment Insurance (NEXI), Japan's export credit agency, and French credit insurer Coface.

https://www.dailysabah.com/energy/2019/02/25/ground-license-to-be-granted-to-sin...


Kuwait Conference pledges billions for Iraqi reconstruction

(Daily Sabah, Istanbul, 4 February 2019) Turkey, the top contributor for Iraq's reconstruction with a $5 billion loan, has launched a coordination process to allocate the funds pledged for rebuilding Iraq. During the Kuwait International Conference for the Reconstruction of Iraq, the host country pledged $1 billion in loans and $1 billion in direct investments. Saudi Arabia said it would allocate $1 billion for investment projects in Iraq and $500 million to support Iraqi exports. Qatar said it would allocate $1 billion in loans and investments, while the United Arab Emirates pledged $500 million in investment. The European Union and Australia each promised $450 million and $100 million, respectively. While the U.S. - who invaded Iraq in 2003 - said it could provide more than $3 billion to help American firms invest in the war-torn country. Britain had said it would grant Iraq export credit of up to $1 billion per year for a decade. Iraqi government published a list of 157 projects, for which it sought private investments during the conference last year.

https://www.dailysabah.com/business/2019/02/04/turkey-initiates-coordination-act...


Bahrain talking to U.S. oil companies about tight oil deal

(Reuters, Manama, 26 February 2019) Bahrain is talking to U.S. oil companies with shale oil expertise about developing a huge oil and gas field discovered last year, and hopes to have an interested company by the end of the year. Oil Minister Al Khalifa also said state-run Bahrain Petroleum Company (Bapco) is “a few weeks away” from financial close on funding for the capacity expansion of its existing Sitra oil refinery. Five export credit agencies from Korea, Spain, Italy and Britain, alongside international and Bahraini banks will provide more than $4 billion in financing.

https://in.reuters.com/article/bahrain-oil/bahrain-talking-to-u-s-oil-companies-...


Finnvera Group’s Board Report and Financial Statements for 2018

(Global News Wire, Helsinki, 26 February 2019) Demand for export credits has increased in recent years. At the same time, our need for funding has increased and, in 2018, a total of EUR 2.4 billion was acquired from the capital market. To balance funding and asset management, Finnvera prepaid loans associated with the temporary export credit system of 2009–2012 to the State, amounting to EUR 1.5 billion. Finnvera’s total exposure at the end of 2018 was EUR 25.6 billion, of which drawn guarantees and credits accounted for EUR 12.2 billion. Approximately half of the exposure relates to binding financing offers or agreements that are related to future deliveries by export companies, and thus they do not create credit risks for Finnvera yet. These arrangements typically consist of buyer financing for cruise ships, the delivery times of which are long. In the long term, the drawn exposure will remain clearly below our total exposure. For potential future losses, we have so far accumulated EUR 1.8 billion reserves as the result of our operations.

https://globenewswire.com/news-release/2019/02/26/1742169/0/en/Finnvera-Group-s-...


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