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 June 2021

I apologize for the delay in publishing this month. This issue is being sent from the beach at Sandbank Park. 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.

  • Global capital racing towards clean energy
  • Rich Countries Subsidizing “Dash for Gas” in Developing World
  • As banks [and ECAs?] flee coal, campaigners turn sights on gas
  • Human Rights Watch Q&A on ECA Fossil Fuel Subsidies
  • World's largest oil shale power plant in Jordan near completion with Sinosure support
  • Chinese export insurance company reports steady business growth
  • ECA supported Ethiopian projects show ‘railpolitik’ in action
  • EXIM Environmental and Social Projects Information and Concerns Grievance Hotline
  • Is West Africa the focus region for ECA-supported financing?
  • Nigeria looks for US$85 billion in investments, increasing ECA dependencies
  • UK business given £12.3bn export support from government
  • Rosatom Preparing Support With French ECA For Foreign Nuclear Power Plants
  • KDF to acquire 118 APCs from Turkey at US$7.4 million
  • ECA Climate change goals lacking on maritime shipping decarbonization

Global capital racing towards clean energy

(Hindu Business Line, Chennai, 17 June 2021) India must accelerate its shift to renewable energy to attract more ESG funding and, thereby, meet its net zero emissions target. The International Energy Agency’s net zero emissions (NZE) roadmap by 2050 sets out the massive investment required to cut emissions and achieve the Paris goal of restricting global surface temperature increase to below 1.5 degree Celsius. Under the NZE roadmap, the use of unabated fossil fuels declines sharply to just over a fifth of the total energy supply. More than two-thirds of the energy supply in 2050 will come from renewables and around a tenth from nuclear. To meet these targets, total annual energy investment will have to surge to $5 trillion by 2030, more than tripling from just over $500 billion annually over the last five years to more than $1,600 billion in 2030. Further, the NZE roadmap requires annual investment in transmission and distribution grids to expand from $260 billion in 2021 to $820 billion in 2030. Global capital is already fleeing fossil fuels and moving towards more profitable clean energy — a shift that is now accelerating in response to net zero pledges last year by China, Japan and South Korea, a ratcheting up of climate ambition by President Biden’s administration and the recent announcement by G7 countries that they will exit all international coal financing by their export credit agencies.


Rich Countries Subsidizing “Dash for Gas” in Developing World

(Energy Fuse, Washington, 7 June 2021) Rich countries are using public financing to expand the construction of natural gas infrastructure in poorer countries around the world. Public-financing of gas in the Global South exceeds that of renewable energy by a factor of four, according to a new report from the International Institute for Sustainable Development. The continued government-backed financing of fossil fuels in low- and middle-income countries puts climate goals at risk and threatens to lock in infrastructure for decades to come. The investment “risks driving a new dash for gas locks countries into a high-carbon pathway, imperiling their economies future and the global climate,” the authors warned in the report. Funding for gas comes from an array of multilateral development banks and a constellation of bilateral financing at the government level from G20 nations, such as export credit agencies and development banks. According to the study and to data from Oil Change International, natural gas projects in the Global South received an average of $16 billion in international public financing between 2017 and 2019, four times higher than solar and wind. Of that total, 48% came from just three countries: Japan, China and the United States. Most of that financing (46%) is funneled into power generation, a sector where there are cheap alternatives in solar, wind and energy storage.


As banks [and ECAs?] flee coal, campaigners turn sights on gas

(Global Trade Review, London, 16 June 2021) Environmental campaign groups are switching their aim to public and private financing for natural gas projects as they get closer to winning the battle over thermal coal. But the only firm commitments on financing have been on thermal coal, where the G7 nations – Canada, France, Germany, Italy, Japan, the UK and the US – committed to “take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021” including export finance and trade support. But data from Oil Change International, a non-profit that campaigns against the use of fossil fuels, suggests the move will make little impact on overall public financing for fossil fuels. In recent months, UK Export Finance (UKEF) has been working to roll out a new transition development guarantee scheme to help oil and gas companies switch towards less polluting operations. But while industry bodies have backed the export credit agency’s plans, analysts (and campaign groups) have warned new initiatives must avoid funding any and all fossil fuels... There has not yet been much market uptake of instruments issued using for example the LMA’s Social Loan Principles.


Human Rights Watch Q&A on ECA Fossil Fuel Subsidies

(Human Rights Watch, New York, 7 June 2021) Government financial support for fossil fuels, including through subsidies, presents a key obstacle to achieving emissions reductions urgently needed to address the climate crisis. Subsidies artificially reduce the costs of fossil fuel production and use, driving continued fossil fuel dependence at a time when governments should be rapidly transitioning away from fossil fuels toward clean, renewable energies like wind and solar. Human Rights Watch has documented how climate change in Canada is depleting Indigenous peoples’ access to traditional food sources and in Colombia, showed how more frequent droughts are worsening malnutrition among Indigenous children. In the US, extreme heat is linked to adverse birth outcomes. These are only a few of the growing impacts experienced around the world that are expected to intensify as temperatures continue to rise in coming years. As of 2019, G20 governments, representing the world’s major economies, supported coal, oil, and gas production and consumption by, on average, $548 billion per year. A significant disparity in support also exists in international public finance, such as from export credit agencies. G20 countries provided at least $77 billion a year through their international public finance institutions.


World's largest oil shale power plant in Jordan near completion with Sinosure support

(Zawya, Dubai, 1 June 2021) The Attarat project will generate 3.7bln kWh of electricity, which can meet nearly one-fifth of Jordan's power demand. The first unit of the world's largest oil shale power plant, located at Attarat um Ghudran, Jordan, is now online, the project's Chinese contractor tweeted last week. The post also said the project is the largest 100% Chinese financed private infrastructure project outside China under the Belt and Road Initiative (BRI). In March 2017, Reuters had reported that the project had secured debt financing from a consortium of Chinese banks. In the same month, JV partner Enefit said in a statement that the project is the first oil shale-fired power plant and mine in the world financed using limited recourse debt financing, securing $1.6 billion for 15 years, backed by export credit insurance from Sinosure.


Chinese export insurance company reports steady business growth

BEIJING, June 5 (Xinhua, Beijing, 5 June 2021) China's only policy-oriented insurer specializing in export credit insurance reported steady business growth in the first five months of 2021. The China Export & Credit Insurance Corporation, or SINOSURE, served about 139,000 clients in the January-May period, increasing 16.3 percent year on year. During the period, the company underwrote about 314.63 billion U.S. dollars worth of insured businesses, up 28 percent year on year. SINOSURE is a state-funded and policy-oriented insurance company that promotes China's foreign economic and trade development and cooperation. It was officially launched and put into operation in 2001, and its service network now covers the whole country.


ECA supported Ethiopian projects show ‘railpolitik’ in action

(Financial Times, London, 31 May 2021) Two ECA lines of credit offer a comparison of Chinese and non-Chinese ECA infrastructure loans in the same African country. A decade ago, when Ethiopia’s late leader Meles Zenawi was planning 5,000km of standard gauge railway, the landlocked country was granted a $2.5bn loan by China Eximbank. That loan was tied to the construction of an 800km railway east-west between Addis Ababa, the capital, and the port city of neighbouring Djibouti. It would be built by Chinese engineers and use Chinese locomotives. A second rail 2013 project intended to run about the same distance south to north, between the central town of Awash and Mekelle, capital of the now war-torn Tigray region was undertaken by a Turkish construction group which helped broker $1.1bn of funding from Turkey’s Eximbank, Credit Suisse and European export credit agencies. Financing proved a big difference. When Ethiopia ran into problems servicing its debt due to a perennial shortage of foreign currency, the Chinese proved flexible, where in contrast, there were penalties built into the European loans for delayed repayment.


EXIM Environmental and Social Projects Information and Concerns Grievance Hotline

(EXIM, Washington, 29 June 2021) The Environmental and Social Project Information and Concerns unit of EXIM provides a process for customers, organizations, and individuals to request or submit information, or express concerns, regarding specific EXIM supported projects, and provides feedback on environmental and social issues. It establishes a formal timeline for response, allowing EXIM staff to promptly receive inquiries and engage in appropriate follow-up action. Contact them at +1 800 565.3946 or +1 202.565.3570 or by email at <EnviroResponseCoord@exim.gov> or via an online form at the above link. An interesting and potentially useful ECA accountability mechanism, depending on how it is being implemented.


Is West Africa the focus region for ECA-supported financing?

(Business Alive, Johanessburg, 14 June 2021) Export credit agency (ECA) finance is an important lever for infrastructural development in West Africa. According to deal intelligence platform TXF Data, Africa was the second-most active region globally in 2020 for ECA-supported financing, with more than $35.5bn worth of ECA-supported debt. This included some of the largest single financed projects in Africa, such as the Mozambique LNG transaction ($14.9bn); the Nigeria LNG train 7 ($3bn); and the Credendo/The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) covered $359m real estate project in Abidjan, to name a few. The Covid-19 pandemic aggravated the infrastructure deficit faced by the continent. West African governments responded quickly, finding new strategies to raise the deficit themselves — particularly with social infrastructure. Unlike East and Southern Africa, West Africa raised finance on the sovereign’s balance sheet, via the ministry of finance (MoF). ECA direct financing is an integral part of financing in West Africa. This model of financing provided by most European ECAs is generally a “countercyclical” financing mechanism that seeks to address market failure. In the first quarter of 2020, there was a global shortage of liquidity, and this significantly raised the cost of financing. This caused ECAs to step up and provide direct loans to MoFs at low Organisation for Economic Cooperation and Development (OECD) commercial interest rates of reference (CIRR). Governments are aware of these financing arrangements and made use of the product offered by ECAs in 2020 (for example the latest March 2021 OECD CIRR for 8.5+ year loan in US dollars is 1.91%).


Nigeria looks for US$85 billion in investments, increasing ECA dependencies

(This Day, Lagos, 30 May 2021) As the African Continental Free Trade Area enters its first six months of inauguration on Tuesday, 1st June, the need for Nigeria to enter the fray of her infrastructure development was the topic that dominated discourse at various fora last week. While the webinar sponsored by Nigeria Export Import Bank revolved around preparing Nigeria in the area of infrastructure development for international trade, the webinar organised by the Bureau of Public Enterprises, similarly dwelt on infrastructure issues and how government will engage it using the public private partnership model. To complement the PPP platform, the apex bank tasked the state governments to tap into the opportunities available to develop the economies of their respective states.


UK business given £12.3bn export support from government

(City AM, London, 23 June 2021) In its annual results published today UK Export Finance (UKEF) announced that it provided £12.3bn (US$17bn) of support to UK exporters in the last financial year, amid coronavirus disruption and ongoing Brexit trade negotiations, almost 3X the amount given in 2019-20. UKEF estimates that its financial support to UK exporters during the pandemic has safeguarded up to 107,000 jobs, and helped key industries in the UK to survive. £7.3bn (59%) was dedicated to exporters including Ford, Nissan, Subsea 7, Rolls Royce, easyJet, and British Airways, whose businesses were severely disrupted by the pandemic, the agency said. A large chunk of this support went to major exporters British Airways and easyJet, who received £2.5bn (20%) to help safeguard jobs at Luton and Heathrow airports. Small businesses in London benefitted from £215m (1.7%) as part of the agency’s Temporary Covid Risk Framework. 79% of the 549 companies UKEF supported were SMEs, [although the % of total funds for SMEs is not known]. The announcement comes a year after campaigners launched a probe into UKEF that found it was supporting sectors prone to corruption as part of its post-Brexit export drive. Campaign group Spotlight on Corruption expressed particular concern at the time that UKEF was increasingly supporting newly established UK-registered subsidiaries of foreign construction firms that have been embroiled in corruption allegations.


Rosatom Preparing Support With French ECA For Foreign Nuclear Power Plants

(UrduPoint News, Moscow, 31st May, 2021) Atomenergoprom JSC, a subsidiary of Russian state corporation Rosatom, consolidating all civil assets of the Russian nuclear industry, is working with the French Economy Ministry on a new mechanism for financial support of its nuclear power plant construction projects abroad with the participation of French export credit agency Bpifrance Assurance Export, according to Atomenergoprom's 2020 annual report. Work continued with the French Ministry of Economy and Finance on the development of a fundamentally 'new mechanism' for financing the company's projects for the construction of nuclear power plants abroad, and will continue in 2021" the report says. No further details are provided. In another nuclear power story involving ECAs, Ukrainian nuclear power plant operator Energoatom told ambassadors of the Group of Seven (G7) and the head of the EU mission in Ukraine that it has "made significant progress" with its strategy to diversify its sources of nuclear fuel. Since 2010, they have signed three contracts for the supply of nuclear materials for the production of nuclear fuel by Urenco, which is one of Westinghouse's nuclear fuel suppliers. Their current contract was signed in July 2019. They are now considering increasing the volume of supplies of nuclear materials under that contract and attracting funding under the UK government's export support programme, which is being implemented through UK Export Finance, the UK's export credit agency.


KDF to acquire 118 APCs from Turkey at US$7.4 million

NAIROBI, Kenya, Jun 5- The Kenya Defence Forces (KDF) is set to acquire 118 Armoured Personnel Vehicles (APCs) from Turkey, in a move meant to bolster its resilience power in the war against terrorism. Kenya is expected to spend Kenyan Sh7.7 billion to purchase the 118 APCs through the Turkish Export Credit Agency. The APCs will be acquired from the Turkish defense and automotive firm Katmerciler. Two other firms, one from South Africa and North America, were locked out of the multi-billion shillings deal.


ECA Climate change goals lacking on maritime shipping decarbonization

(S&P Globlal, New Yrk, 3 June 2021) The difficult-to-decarbonize maritime shipping sector was not part of the Paris agreement, and is projected to account for an increasing portion of global CO2 emissions. The international cargo and container shipping industry plays a central role in global supply chains, but until recently has made few inroads toward decarbonization. That needs to change if the world is going to achieve net zero emissions by 2050. An inaugural report released late last year showed that ECA shipping portfolios aligned with the climate goals set by the IMO at only three of 15 disclosing institutions: Dutch bank ING Groep NV, French export credit agency Bpifrance Assurance Export, and Eksportkreditt Norge AS, also known as Export Credit Norway. But even as it pursues deep decarbonization pathways, the maritime shipping industry is taking up interim solutions. For starters, some shippers have begun using liquified natural gas as a shipping fuel, which produces significantly less carbon than the oil the industry uses. But since natural gas is not viewed as a permanent solution because it still emits carbon, the industry is pursuing zero-carbon options as well. The Getting to Zero Coalition coordinated by the Global Maritime Forum. The coalition recently released a report that found getting past the tipping point for zero-emissions fuel costs will require the industry to have 5% adoption of those fuels by 2030, with adoption ramping up to more than 90% by the mid-2040s.


What's New May 2021

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.

  • ECAs and Fossil Fuels
  • OECD Study Measures Distortions in International Markets, but not by ECAs
  • IEA leaves little room for doubt: no fossil fuel expansion - but ignores ECAs
  • EDC singled out on fossil fuel finance by international legal opinion
  • EU lawmakers urge French, German & Italian ECASs to ditch Arctic LNG 2 support
  • Decarbonising Danish Export Credits
  • Egypt to buy Rafale fighter jets with French ECA support
  • Russian Export Credit Line for Sri Lankan Arms
  • Japan looks to introduce finance system for defence exports
  • Belarus isolation deepens as air links cut and Swedish ECA credit cancelled
  • Europe’s big oil companies exploit African natural-gas loophole
  • Royal Caribbean adjusts $1.15 B in ECA facilities facing $1.1 B loss in first quarter of 2021

ECAs and Fossil Fuels

(ECA Watch, Ottawa, 29 May 2021) TXF News recently pronounced Mozambique's LNG Area 1 project as the winner of its energy financing ECA-backed deal of the year, highlighting the "battle" between coal and gas (and oil) in the industry's efforts to survive efforts to halt climate change, following the International Energy Agency's (IEA) recent warning that we must reduce CO2 emmissions to net-zero by 2050. The IEA report on May 18 noted that "nations around the world would need to immediately stop approving new coal-fired power plants and new oil and gas fields and quickly phase out gasoline-powered vehicles if they want to avert the most catastrophic effects of climate change." A recent Oil Change International legal opinion has also warned about the legal consequences of continuing to back fossil fuel projects elsewhere in the world. The fossil fuel industry and some governments had begun to make noises about ceasing funding for coal, claiming that LNG is "safer", hence TXF's apparent "praise" for the US$29 billion ECA backed Mozambique LNG project. However, a 2018 Rentar Environmental Solutions study notes that natural gas contributes more to global warming than coal, gasoline and diesel, far more in fact. UKEF funding of Mozambique's LNG plans are now the subject of a UK court review as well as the subject of an EXIM scandal over its loan guarantee for a Greensill Capital investment in a Texas gas terminal, approved to dampen US fossil fuel industry opposition to EXIM's support for their competitor Anadarko Petroleum's 26.5% share in the huge Mozambique LNG project. To round off the controversies, Total's Mozambique operations, the recipient of multiple ECA financial supports, have had to be cancelled as the result of a jihadist assault on a nearby town.

OECD Study Measures Distortions in International Markets, but not by ECAs

(OECD, Paris, May 2021) This OECD report looks at support governments provide to their industrial producers which they say has been a growing source of trade tensions amid reports of excess capacity and unfair competition. While much light has already been shed on support to agricultural producers and fisheries, the scope and scale of government support in manufacturing remains opaque and poorly documented. The study finds that firms benefit by not being subject to the same market discipline as their competitors, domestic or foreign. However, they note that much of the little academic evidence that exists for OECD countries concerns either the effects of subsidised lending on small and medium-sized enterprises (e.g. from a regional development angle) or export credits. They note that both issues fall outside the scope of the present report. The claim "export credits are in principle subject to the OECD Arrangement on Officially Supported Export Credits and should therefore reflect market terms and conditions for Participants." A review of the keywords "eca subsidies" on the ECA Watch web site found 97 example documenting the fact that export credits do not reflect "market terms and conditions for Participants", contrary to the claims of the OECD "gentlemans" agreement.


IEA leaves little room for doubt: no fossil fuel expansion - but ignores ECAs

(Bank Watch, Nijmegan, 18 May 2021) The International Energy Agency (IEA) has launched a long-awaited report setting out for the first time an energy scenario that is aligned with the urgent goal of limiting global warming to 1.5°C. The Agency sets this out in its report, “Net Zero by 2050: A roadmap for the global energy sector”, which it claims is “one of the most important and challenging undertakings in the IEA’s history”. Although not without problems, its headline conclusion is rock-solid: there can be no new fossil fuels in a net-zero by 2050 pathway. This conclusion is fully aligned with one of the core demands of the global call on banks on the new Fossil Banks No Thanks platform, launched yesterday. Unfortunatly the report makes no reference to the role of ECAs which are amongst the largest financial supporters of new fossil fuel projects.


EDC singled out on fossil fuel finance by international legal opinion

(National Observer, Vancouver, 5 May 2021) EDC's financial support to the oil and gas sector came under scrutiny Tuesday as part of a new legal opinion outlining Canada’s obligations in responding to the climate crisis. The legal opinion from London says governments must take steps to stop their export credit agencies from providing financial help to oil and gas projects worldwide. EDC provided over $8 billion in support last year to the oil and gas sector, it has confirmed, and over $10 billion the year before. EDC says it operates at arm's length from the government, that it has cut down on its lending portfolio’s exposure to high-carbon sectors in recent years, and complies with all the OECD climate-related policies. Viñuales and Cook’s legal opinion explicitly singles out EDC as representing the largest supporter among G20 export credit agencies of fossil fuels during the 2016-18 period. EDC’s climate change policy — and some criticism levied against it related to oil and gas — is also highlighted.


EU lawmakers urge French, German & Italian ECASs to ditch Arctic LNG 2 support

(Reuters, London, 18 May 2021) A group of mostly Green Party lawmakers from the European Parliament on Wednesday urged the leaders of Germany, France and Italy not to support a Russian Arctic liquefied natural gas (LNG) project due to climate change concerns. The $21 billion project, led by Russian gas producer Novatek and with international backers including French oil major Total TOTF.PA, is expected to launch in 2023 and reach full LNG production capacity of almost 20 million tonnes a year in 2026. "We urge the French, German and Italian governments to refuse to support this project and set a new standard by ending all export finance support to fossil fuels before COP26," the letter said.


Decarbonising Danish Export Credits

(Just Finance International, Aarhus, 25 May 2021) A forthcoming report from Just Finance International outlines recommendations to the Danish government for plans to phase out fossil fuel support for its export credit agency (ECA) Eksport Kredit Fonden (EKF) and also for its broader international public finance support. Public development funds are meant to benefit people, climate and environment, but in reality they support some of the most destructive activities on earth. Coal power is the world’s most polluting energy source, and the largest contributor to climate change. Yet public funds are still financing new investments in coal and other highly polluting industries. In response to worsening climate change, the United Nations International Panel on Climate Change (IPCC) has announced that financial and governmental support of high-emission sectors must be decreased, and climate resilience increased. The UN IPCC has made clear that all untouched fossils must stay in the ground and all subsidies must stop if the Paris climate goals are to be  reached. In line with the Paris Agreement goals, governments and their institutions worldwide are taking steps to phase out fossil fuels. In this report, a screening of Danish ECA EKF’s portfolio shows that while its investments in fossil fuels are limited, it has several projects in high-greenhouse gas emission (GHG) sectors such as cement, hydropower and mining, and in the livestock and chemical sectors. It is also likely to increase its involvement in cement and hydropower in the coming years. Because export credit agencies are demand-driven, their portfolios reflect the applications they receive. Clear regulations are essential to prevent ECA support for fossil fuels and other high-emission sectors in the future.


Egypt to buy Rafale fighter jets with French ECA support

(Second Line of Defense, Virginia, 5 May 2021) France welcomed May 4 an Egyptian announcement of an order for a further 30 Rafale fighter jets and weapons from Dassault Aviation, MBDA and Safran, confirming a news report on Disclose, a French campaigning website. The Egyptian deal was worth a total €3.95 billion ($4.7 billion), with €3.75 billion for the Rafales, and €200 million for weapons from MBDA and Safran Electronics & Defense. Because Egypt is heavily indebted, the acquisition will be financed by an export credit guaranteed bank loan backed by France for up to 85 percent of the total amount.


Russian Export Credit Line for Sri Lankan Arms

(Daily News, Colombo, 13 May 2021) The Sri Lanka Air Force (SLAF) in its response to concerns raised by the Opposition on the Government’s move to purchase new helicopters from Russia amidst the COVID pandemic, said the purchase was on a Government-to-Government basis via a Line of Credit offered to Sri Lanka to purchase military hardware from Russia which is still being negotiated over several years. Russia had offered Sri Lanka a US$ 300 million Credit Line, from which 14 Mi-171E and Mi-171Sh helicopters were bought down in 2010 at a cost of US$ 165 million, some of which are currently being used for UN peace keeping operations. He said that there was a balance of US$ 135 million which lapsed in 2015, but it was renewed by Russia to allow Sri Lanka to purchase a Gepard 5.1 Offshore Patrol Vessel (OPV) for the Sri Lanka Navy. However, since the Navy had found a less costly alternative, Russia had agreed to allow that amount to purchase Mi-17 helicopters.


Japan looks to introduce finance system for defence exports

(Janes Defence News, Coulsdon, 18 May 2021) The government of Japan is reportedly looking into the possibility of supporting defence exports through the provision of low-interest loans. The plan would involve the state-owned Japan Bank for International Cooperation (JBIC) providing credit to potential customers. Government sources cited by Japanese media said the loans would enable developing countries with a shortfall in funding to procure defence equipment from Japan. The government’s official export credit agency, Nippon Export and Investment Insurance (NEXI), would support the loans.


Belarus isolation deepens as air links cut and Swedish ECA credit cancelled

(The Journal, Dublin, 18 May 2021) Belarus was increasingly isolated today as Europe cut air links and calls grew for more action over its diversion of an airliner and arrest of a dissident on board. The Swedish Export Credit Agency (EKN) said today it was withdrawing export guarantee offers for deals involving two state-owned Belarusian companies, citing failure to live up to human rights standards. The guarantee offers, which totalled two billion Swedish kronor (€197 million), concerned the sale of gas turbines from a Swedish subsidiary of Germany’s Siemens and state-owned Belarusian energy companies RUE Minskenergo and RUE Brestenergo.


Europe’s big oil companies exploit African natural-gas loophole

(Africa Report, Paris, 24 May 2021) Facing pressure from the public and Western regulators, as well as from shareholders and financial partners, oil industry majors, especially those based in Europe – chiefly Shell, BP, Total and Eni – have initiated an unprecedented transformation by voluntarily reducing their crude oil activities in favour of [so called] “greener” forms of energy. This may be good news for environmental activists, but not so for Africa’s oil-producing countries that benefit from the tax revenues and jobs the industry brings. In the global race to reduce carbon emissions, Africa is a bystander rather than an active participant. The continent produces 9% of the world’s liquefied petroleum gas (oil) – or 7.2m barrels a day – and 6% of its natural gas, while being a low emitter of greenhouse gases. Home to 17% of the world’s population, Africa accounts for just 2% of global carbon emissions. In addition, more than half of its oil production is for export. Shell’s stated goal, backed by the European Union and the UK, is to become carbon neutral by 2050. Europe’s oil majors, while not required to meet any legal obligations at this stage, have integrated this target across their operations. It takes into account the end use of the fuels they sell (scope 3 emissions), which is by far the largest factor in carbon emissions. For example, the French group Total’s direct emissions amount to around 45m metric tonnes of carbon dioxide equivalent, but its vehicle-related emissions are estimated to be as high as 450m metric tonnes.


Royal Caribbean adjusts $1.15 B in ECA facilities facing $1.1 B loss in first quarter of 2021

(Royal Caribbean Blog, Winter Garden, 29 April 2021) While Royal Caribbean did lose $1.1 billion or $4.66 per share compared to US GAAP Net Loss, that is an improvement over the same time last year, when it lost $1.4 billion. Among the actions taken during the first quarter of 2021 to help include completing the balance of the previously announced amendments to its export credit facilities, which in total defer $1.15 billion of principal amortization due before April 2022 and waive financial covenants through at least the end of the third quarter of 2022.


What's New April 2021

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.

  • CSOs say newly launched export finance coalition (E3F) fails to lead
  • OECD Arrangement amends local content rules for export credits
  • Rich nations under fire for funding gas as 'bridge fuel' overseas
  • UK court to review Mozambique fossil fuel investment
  • Biden Administration to Utilize EXIM as Key Element in New International Climate Finance Plan
  • Canada’s oil and gas sector received $13 billion in EDC subsidies during the pandemic
  • Beijing and New Delhi court Indian Ocean armies with ECA loans
  • Tell EXIM: Cut ties with India's deadly Sasan coal plant
  • US climate summit declarations deal major blow to coal in Asia
  • China Is Investing in Africa’s Energy and Transportation Infrastructure
  • Boeing Forecasts Sufficient Capital for Aviation Finance
  • Iraqi, GE achieve financial close of Power Up Plan 4
  • Russian president signs law to ratify protocol restructuring Belarusian ECA loan

CSOs say newly launched export finance coalition (E3F) fails to lead

(Oil Change International, Washington, 15 April 2011) In response to the launch of a new Export Finance for the Future coalition (E3F), 21 civil society organizations (CSOs) from 14 countries released a statement criticizing the lack of ambition from the coalition. The seven European countries, which according to French Finance Minister, Bruno Le Maire represent around 40% of export financing in the OECD, pledged to end formal trade and export financing directed at thermal coal mines and coal supply chain infrastructure. While welcoming the initiative as a step in the right direction, the CSOs, including Oil Change International, state that the coalition fails to take the urgent action that is required to meet climate goals: “Rather than adding new commitments, the E3F principles are simply a reiteration of what most signatories are already doing: not supporting the coal sector, increasing support for ‘green products’, and being more transparent about their support for oil and gas. For this coalition to make a real difference, it needs to take decisive action to end all export finance for fossil fuels, following at least the level of ambition shown by the UK, which put an end to virtually all new export finance for fossil fuels last month.” Seven European countries (Denmark, France, Germany, the Netherlands, Spain, Sweden and the United Kingdom) formally pledged to end their support for agencies that finance export projects Fossil fuels. CSOs note that a few countries are embarrassingly absent from the coalition, including the US and Canada. In January, the White House published an Executive Order stating that it would “promote ending international financing of carbon-intensive fossil fuel-based energy,” including finance provided by US EXIM. And while Canada’s export finance institution, Export Development Canada (EDC), was among the first ECAs to adopt a climate change policy, it remains a top provider of export support for fossil fuels.


OECD Arrangement amends local content rules for export credits

(Global Trade Review, London, 27 April 2021) The decision to amend local content rules within the OECD Arrangement on Officially Supported Export Credits has been hailed as an “important step” in modernising the agreement, though industry figures have raised concerns over a lack of progress in other key areas of discussions. The OECD revealed last week that participating members of the Arrangement – which includes countries in the EU, as well as the US, Japan, Canada and Australia – had agreed to increase the maximum local cost support on offer from their ECAs. For export contracts in high income OECD countries (category one), maximum local cost provisions have risen from 30% of the export contract value to 40%. In all other nations (category two), the percentage of local costs a participating arrangement ECA can cover has been increased to 50%. A high-ranking official in the export credit sector familiar with discussions on the Arrangement, tells GTR that participating members had initially struck an agreement to amend local content rules in November. However, they say that the EU needed time to formally approve the changes as the Arrangement is legally binding in the bloc.


Rich nations under fire for funding gas as 'bridge fuel' overseas

(Thomson Reuters, London, 21 April 2021) Donor governments are pulling out of financing new coal plants, but campaigners say they want pledges to cover all fossil fuels, with gas still touted by some as a way to transition to renewable energy. Pressure on wealthy governments to stop financing polluting coal projects in developing nations is getting results, with more countries announcing they will no longer make such investments. But the battle is far from won - and is now shifting to include oil and gas finance, climate change campaigners say. Last week, 57 U.S. green groups wrote to U.S. climate envoy John Kerry urging him to "unequivocally declare that gas is not part of the solution" and to immediately end all fossil fuel support internationally as well as U.S. exports of fossil fuels "as science and justice require". The move came after Kerry told a discussion with the head of the International Monetary Fund this month that "gas, to some degree, will be a bridge fuel", meaning it could smooth the transition from the dirtiest energy sources - coal and oil - to renewables. Kate DeAngelis of Friends of the Earth noted the new plan to phase out fossil fuel finance did not cover the U.S. Export-Import Bank, the largest source of U.S. government financing for fossil fuel projects abroad. Some 20 environmental organisations said the E3F coalition had made no new commitments and that the Netherlands, France and Britain continued to provide support for gas extraction in violence-hit northern Mozambique, saying the investments had forced communities from their homes after losing their fishing areas and farmland.


UK court to review Mozambique fossil fuel investment

(Africa Times, Roubaix, 22 April 2021) The British government’s investment in developing liquified natural gas (LNG) projects in Mozambique – projects contributing to the conflict and instability in the country’s north – is headed for judicial review following a successful legal filing from the Friends of the Earth. The London-based NGO says the decision to approve funding for LNG was illegal, and wants it reexamined because investment in fossil fuels is inconsistent with both the global climate goals established under the Paris Agreement and the UK’s own climate commitments. The Guardian notes fears that fossil fuel project is stoking an insurgency in the north which has left thousands of people dead and displaced hundreds of thousands. The investment amounts to about US$1 billion through the UK Export Finance (UKEF), the British export credit agency. “We’re delighted the High Court has given us permission to challenge the UK government’s reckless decision to provide huge financial support to a climate-wrecking gas project in Mozambique,” said Will Rundle, head of legal at Friends of the Earth, in a statement released Thursday. French energy giant Total on Monday confirmed it is suspending work on a massive $20 billion gas project in northern Mozambique following the latest jihadist assault on a nearby town last month.  The US is also backing the $20 billion methane gas development. The US Export-Import Bank (Exim) has provided a $4.7bn loan to the project.


Biden Administration to Utilize EXIM as Key Element in New International Climate Finance Plan

(JD Supra, Sausalito, 27 April 2021) On April 22, 2021, President Joe Biden announced his International Climate Finance Plan as a follow up to his January Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad. This International Climate Finance Plan reflects the Administration’s desire to double, by 2024, U.S. annual public climate finance to developing countries using as a baseline the average level during the second half of the Obama Administration. The Biden Climate Finance Plan is also supposed to be a boon to U.S. companies, particularly manufacturers of products and technologies viewed as environmentally beneficial. Accordingly, the Export-Import Bank of the United States is expected to play a key role in helping the Administration achieve its stated goals. As the U.S. Government’s official export credit agency, the Ex-Im Bank provides direct loans, loan guarantees, and export credit insurance in support of exports of U.S. goods, services, and technologies. By helping foreign buyers (public and private), Ex-Im Bank fills gaps in private export finance and supports U.S. jobs.


Canada’s oil and gas sector received $13 billion in EDC subsidies during the pandemic

(The Narwal, Victoria, 15 April 2021) Despite repeated promises to phase out fossil fuel subsidies, Canada’s federal government dedicated $18 billion in 2020 to assist the country’s oil and gas sector, according to a new report from Environmental Defence that outlines additional support for the industry since the COVID-19 pandemic was declared last March.  Included in the $18 billion are $3.28 billion in direct spending and $13.6 billion in public financing for oil and gas companies that primarily comes from the opaque crown corporation Export Development Canada, according to the report, Paying Polluters: Federal Financial Support to Oil and Gas in 2020.


Beijing and New Delhi court Indian Ocean armies with ECA loans

(African Intelligence, Paris, 1 April 2021) As China's influence around the Indian Ocean increases, New Delhi is throwing itself wholeheartedly into a diplomatic battle to protect what it considers to be its turf. In March, the Indian Navy trained a group of about fifty members of Madagascar's special forces and India's INS Shardul and Madagascar's MNS Trozona carried out joint naval exercises. During a visit to Mauritius, Indian minister of foreign affairs Subrahmanyam Jaishankar promised Prime Minister Pravind Jugnauth he would establish a $100m export credit for buying Indian military equipment, notably for the acquisition of aircraft and patrol vessels. The two countries also signed an agreement for India to supply a HAL (Hindustan Aeronautics Limited) Dhruv utility helicopter, and a patrol aircraft manufactured by Dornier, a HAL subsidiary. In 2016, New Delhi provided Mauritius with a Dornier Do-228 MP aircraft and then two Sarojini Naidu patrol vessels made by Goa Shipyard the following year. Paris is also beefing up military aid to Madagascar as Beijing and New Delhi jostle for influence.


Tell EXIM: Cut ties with India's deadly Sasan coal plant

(Sierra Club, Oakland, 23 April 2021) More than a year has passed since the deadly April 10, 2020 coal ash disaster at the US EXIM-financed Sasan coal plant in Singrauli, India. The coal ash disaster was responsible for the deaths of six people and created a massive flood of coal ash that continues to pollute the water and community land almost a year later. Back in 2015, the Inspector General of EXIM issued a report revealing a stunning 19 fatalities at the facility. This followed a 2014 report from Sierra Club and NGOs that revealed forced resettlements, occupied houses being bulldozed in the middle of the night, labor abuses including employees handling hazardous materials without protection, and rampant environmental contamination of the local community. Since the2015 report, monitoring reports have revealed an additional eight deaths at Sasan, but the actual death count is probably even higher.


US climate summit declarations deal major blow to coal in Asia

(For Our Climate, Seoul, 22 April 2021) Coal in Asia is facing a far more challenging future, with South Korean President Moon Jae-in today pledging to end public overseas coal financing and enhance its 2030 emissions target within this year, and Japan’s Prime Minister Suga committing to toughening emissions cuts at the Leaders Summit on Climate.  South Korea has been called a “climate villain” by the international community for failing to meet unambitious emissions targets and consistently ranking among the world’s top three overseas coal financiers, along with China and Japan. Most recently, the Korean government drew fire for pushing a Green New Deal domestically while its public institutions backed the Jawa 9, 10 coal power projects in Indonesia and Vung Ang 2 coal power project in Vietnam. Prime Minister Suga committed to enhancing Japan’s NDC by 46-50% below 2013 levels by 2030, and China’s President Xi Jinping committed to phasing down coal consumption in the country’s 15th five-year plan period.


China Is Investing in Africa’s Energy and Transportation Infrastructure

(News Ghana, Accra, 9 April 2021) These two articles examine China’s investment policy in Africa that should be read to learn the truth about China’s lending to the continent. One, is a briefing paper from China Africa Research Initiative (CARI) entitled, Twenty Years of Data on China’s Africa Lending. The second is entitled, “Why Substantial Chinese FDI is Flowing into Africa, by Shirly Yu. Combined, both papers provide a thorough analysis of the positive contribution of Chinese investment in Africa, surpassing the United States in all categories. As many African leaders know, without China’s contribution to Africa’s development, especially in infrastructure, Africa would be worse off. There is absolutely no indication that the U.S. and the West would fill that void. The China Africa Research Initiative (CARI) notes that from 2000-2019, China has made $157 billion in loans to Africa. Of these 1,077 loans, 85% have been in categories of infrastructure, of which 65% have been in energy and transportation. Only 13% of Africa’s debt is owed to China. The largest portion of Africa’s debt is owed to multilateral institutions at 32%. The four biggest Chinese banks involved with lending to African countries are China Eximbank, CDB, ICBC, and BOC. China Eximbank–which is China’s official export credit agency, and also the only bank offering government subsidized foreign aid concessional loans–is the largest and since 2000 accounts for 56 percent of all loans.


Boeing Forecasts Sufficient Capital for Aviation Finance

(PR Newswire, Chicago, 14 April 2021) Boeing projects global and diversified funding will continue to flow into the aircraft financing sector as the aviation sector navigates the global pandemic and vaccine deployment continues to accelerate. The 2021 CAFMO reports the aircraft financing environment ended 2020 with enough liquidity to finance deliveries, but with stresses particularly in the bank debt and tax equity markets. At the industry level, commercial aircraft delivery funding volume totaled $59 billion, a 40% decrease from 2019 levels. Aircraft lessors executed a significant volume of sale-leaseback transactions, and the industry-wide leased fleet climbed to 46%. Export credit agencies remain a small but important funding source during the pandemic.


Iraqi, GE achieve financial close of Power Up Plan 4

(Utilities MIddle East, Dubai, 11 April 2021) GE will provide capital and spare parts, repairs and services to 7 Iraqi power plants to help maintain more reliable generation of up to 2.7 gigawatts (GW) of electricity. GE played a key role in bringing the Iraqi Ministries of Finance, Electricity and Planning together with various financial institutions, including export credit agencies, commercial banks and others, to secure financing for the project. This has been facilitated by Etihad Credit Insurance (ECI), the UAE’s Federal export credit company. GE has collaborated with various private and public financial institutions from around the world to help secure over US $2.4 billion in financing since 2015 for energy sector projects across Iraq.


Russian president signs law to ratify protocol restructuring Belarusian ECA loan

(BELTA, Minsk, 29 April 2021) Russian President Vladimir Putin has signed the law to ratify the protocol restructuring the protocol to amend the Belarusian-Russian intergovernmental agreement on the state export credit to the Belarusian government to build a nuclear power plant. During the ratification, it was noted that some $4.7 billion of the $10 billion loan provided for the construction of the Belarusian nuclear power plant was used as of 1 March this year. According to Russian government estimates, the cost of the construction will be about $6 billion. The protocol contains the following terms for restructuring Belarusian obligations: extension of the loan use period for 2 years - until the end of 2022; postponement of the grace period on the principal from 1 April 2021 to 1 April 2023; replacement of the current mixed interest rate on the loan with the fixed interest rate of 3.3% per annum.