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 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.


What's New March 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.

  • Nearly 450 Organizations Call on Biden Administration to End Public Finance for Fossil Fuels
  • 250 organizations caution banks and ECAs against financing East African Crude Oil Pipeline
  • China Exim’s energy lending nosedives, Beijing weighs ban on foreign coal financing
  • ECA funding for critical mineral and rare earth projects
  • ECAs and the future of hydrogen finance
  • ECAs, the Kachi Lithium Brine project and environmental concerns
  • UK Undermines Own Claim to Climate Leadership By Failing to End Oil and Gas Licensing in the North Sea
  • SACE guaranteed 86 mln euro Greensill loan to collapsing Gupta steel arm
  • Swedish ECA under pressure to break ties with Belarus
  • EXIM: The Fox Is Watching the Henhouse: Green Energy Edition
  • What Investments Is The UAE Planning To Make In Israel?
  • Man Sentenced for Role in Scheme to Defraud EXIM
  • Hungarian Armed Forces Get EUR 349 Million ECA support
  • Our public finance institutions are fuelling climate change
  • JBIC injects liquidity into Japan Airlines
  • Does China subsidize export credit to reinforce its geopolitical aspirations?
  • Flash: ECA financed Mozambique LNG sector braces for delays amid escalating violence

Nearly 450 Organizations Call on Biden Administration to End Public Finance for Fossil Fuels

(Oil Change International, Washington, 18 MArch 2021) In a newly released letter, nearly 450 organizations called on the Biden Administration to immediately end all U.S. public financing for fossil fuels, including natural gas. Signatories to the letter span six continents and include major U.S. civil society organizations, international groups, and organizations in the Global South concerned about the impacts of U.S. support for overseas fossil fuel projects. U.S. public finance for overseas fossil fuel projects averaged more than $4 billion (USD) annually over the past decade, according to Oil Change International data, at times exceeding $10 billion USD in a single year. This finance was distributed primarily through the U.S. Export-Import Bank and the U.S. Development Finance Corporation, formerly the U.S. Overseas Private Investment Corporation. Dozens of groups from many countries where the U.S. has financed fossil fuel projects — including Brazil, Colombia, El Salvador, Georgia, Ghana, India, Nigeria, Papua New Guinea, South Africa, Turkey, Uruguay, and elsewhere — have signed onto the letter urging the Biden Administration to make good on it’s commitment to end high-carbon finance.


250 organizations caution banks and ECAs against financing East African Crude Oil Pipeline

(Construction and Civil Engineering News, Nairobi, 2 March 2021) More than 260 organisations have urged banks not to finance the $3.5 billion project, saying the project could lead to the loss of community land and livelihoods, environmental destruction and surging carbon emissions. Nearly a third of the pipeline will run through the basin of Africa’s largest lake, Lake Victoria – which more than 40 million people depend on for water and food production. It will also cross more than 200 rivers, run through thousands of farms and cut through vital wildlife reserves. The pipeline is expected to cost around $3.5 billion. Of this, about $2.5 billion will be borrowed from banks and other financiers. It is not yet clear which banks intend to participate, although the three banks acting as financial advisors are likely to join and act as lead arrangers. The pipeline – proposed by French oil company Total and the China National Offshore Oil Corporation – will fuel climate change by transporting oil that will generate over 34 million tons of carbon emissions each year. The letter to the three banks acting as financial advisors for the project – Standard Bank, Sumitomo Mitsui Banking Corporation, and Industrial and Commercial Bank of China – and 22 banks that have recently provided finance to Total and CNOOC, comes as speculation mounts that a Final Investment Decision (FID), which would commit Total to mobilize capital for the project, is imminent. UKEF has apparently ruled out public subsidy for the pipeline Signatories to the open letter included Friends of the Earth International, 350.org, the Catholic Agency for Overseas Development, Reclaim Finance, Sierra Club, Global Witness, the IUCN National Committee of the Netherlands, BankTrack, Africa Institute for Energy Governance (AFIEGO) and Inclusive Development International (IDI).


China Exim’s energy lending nosedives, Beijing weighs ban on foreign coal financing

(Global Trade Review, London, 3 March 2021) Overseas energy financing from Chinese policy banks plummeted last year in the wake of the Covid-19 pandemic, a new report says, as pressure builds on Beijing to drop its zest for coal projects in developing countries. According to data from Boston University’s Global Development Policy Center (GDPC), funding from the China Development Bank (CDB) and the Export-Import Bank of China (Cexim) plunged by roughly 43% in 2020. Having funded around US$8.1bn in loans for energy projects in developing countries in 2019, the pair’s outlay tightened to US$4.6bn last year. More than half of the two banks’ combined overseas energy funding went to a single project in Nigeria, with Cexim providing a US$2.5bn loan to the Ajaokuta, Kaduna, Kano (AKK) gas pipeline project in Nigeria. The total figure was comprised of eight loans to countries across Africa and Asia, as well as one deal for a coal-powered district heating system in Serbia. A host of countries which have previously received sizeable loans from the CDB and Cexim, including Pakistan and Zambia, were forced to apply for debt relief from China in the wake of the devastating effects of Covid-19. Pressure has been growing internationally for export credit agencies (ECAs) such as Cexim to withdraw support for coal-fired power plants, and there are suggestions that Beijing could seek to ban development financing for overseas coal projects. UK Export Finance (UKEF) announced in December that it would end support for fossil fuel projects, joining the likes of France and Sweden in ruling out backing for deals in the oil, gas and coal space. Last year, the Japanese government said it would tighten lending criteria for export credit support for coal-fired power plants. Critics have, however, condemned “loopholes” in Japan’s commitment, noting that the country is still open to funding overseas coal plants that use highly efficient technology, or any project it has already agreed to back. A report from US-based research organisation Oil Change International has previously shown that when it comes to providing export credits for fossil fuels, Japan is the main offender – with China in second place. one example of the steps being taken by the Chinese government, in December, the environment ministry backed a green guidance paper suggesting that the most polluting BRI projects should be put on a negative list. In 2020, the commodity was still very much on the agenda, with the pair providing a combined US$474mn to two coal projects in Pakistan and Serbia.


ECA funding for critical mineral and rare earth projects

(Lexology, London, 15 March 2021) As demand for critical minerals and rare earths soars due to their importance to future facing technologies and 2050 net zero pledges, 2021 is poised to be a breakout year for critical mineral and rare earth projects in Australia, provided project proponents can source funding and navigate the key bankability issues. Unique to critical mineral projects are the sector’s geopolitical issues and an emerging focus on securing supply chain resilience as a matter of national sovereignty, particularly in the technology, healthcare and defence-related equipment manufacturing sectors. In Australia, the government has mandated Export Finance Australia (EFA), its export credit agency, to support critical mineral projects. For example, EFA’s support to a greenfield critical minerals project in New South Wales last year enabled the project proponents to escalate engagement with prospective strategic investors. Funding may also be available from foreign governments as demonstrated by Lynas Rare Earth Limited’s announcement on 22 January 2021 that it had entered into a co-funding agreement with the United States Department of Defense to build a commercial light rare earths separation plant in Texas, United States. The US funding is derived from the Department of Defense’s Title III, Defense Production Art program.


ECAs and the future of hydrogen finance

(Lexology, London, 8 March 2021) Hydrogen can be put to uses such as fuel cells for remote and emergency power or in the vehicle and transport sector, replacement feedstock for ammonia production, as reticulated natural gas replacement or to supply electricity markets. Global decarbonisation commitments are driving Australia's hydrogen industry together with bank mandates to move away from fossil fuels. Hydrogen offers the prospect of capitalising on Australia's renewable power resources of wind, solar and hydro to produce green hydrogen. The key inputs to a green hydrogen project are power and water. Ensuring a reliable and cost-effective power supply and access to water rights will be important. As will access rights to key infrastructure (ie gas pipelines, road, rail or ports). Early stage hydrogen projects are unlikely to be project financed without government and industry support. Establishing a new industry requires a long-term policy framework, innovation and collaboration of all industry participants – governments, regulators, industry, industry bodies, investors and financiers. Australia has the essential requirements for a reliable and efficient green hydrogen industry – reliable and affordable renewable power plus recent experience developing the LNG and solar energy markets. Following the lead of the large-scale LNG projects, funding from export credit agencies is also a likely option. ECAs such as The Japan Bank for International Co-operation, The Export-Import Bank of China, and Export Finance Australia are governmental agencies that provide finance for export related transactions. ECAs must fund in accordance with their government imposed mandate. Securing domestic energy supply or key commodities is often included in mandates and large, export oriented Asia Pacific LNG projects have benefited from ECA funding.


ECAs, the Kachi Lithium Brine project and environmental concerns

(Proactive Investors, London, 16 March 2021) Australia's Lake Resources NL has refreshed its Argentine Kachi Lithium Brine Project prefeasibility with a net present value now at US$1.58 billion and is also assessing the potential increase of lithium carbonate production at the project as demand continues to rise from battery makers for high purity lithium carbonate. The Kachi project remains highly scalable and the company is working towards an expansion, which would make it globally significant in terms of high purity lithium carbonate production, and well-positioned to supply the expected deficit in battery-grade product over the next few years. Lake Resources NL's Kachi project is a large lease holding of 70,000 hectares with an expandable resource of 4.4 million tonnes of lithium carbonate equivalent of which only 20% is used for 25 years of production at 25,500 tonnes per annum. Joint financial advisors have been appointed to structure and arrange project finance, with a focus on export credit agencies for the development of the Kachi Project. While the race is on to find a steady source of lithium, a key component in rechargeable electric car batteries. the Guardian has recently noted that the lithium 'white gold' rush threatens environmental damage on an industrial scale.


UK Undermines Own Claim to Climate Leadership By Failing to End Oil and Gas Licensing in the North Sea

(Oil Change International, Washington, 24 March 2021) The United Kingdom announced a “North Sea deal to protect jobs in the green energy transition” that campaigners say fails to meet the UK’s responsibility to lead in a phase-out of domestic oil and gas extraction. In a positive step, the announcement includes further details on the earlier announced commitment to end public finance for fossil fuels, which will apply immediately. Yet, on the domestic oil and gas production side, the government’s plan falls far short of the immediate end to new licensing called for by climate groups. “Making future licensing rounds conditional on vaguely defined Climate Compatibility Checkpoints is a subterfuge aimed at concealing a simple fact: handing out new licenses for oil and gas is not compatible with limiting warming to 1.5°C. Wealthy oil and gas producing countries such as the UK have a responsibility to lead in phasing out extraction, a reality that the government ignored today. Other countries such as Denmark, New Zealand, and France have already ended oil and gas licensing rounds, and the UK is now a laggard in this respect."


SACE guaranteed 86 mln euro Greensill loan to collapsing Gupta steel arm

(Reuters, London, 18 March 2021) Italy's official ECA SACE guaranteed an 86 million euros ($102 million) loan from Greensill Bank, part of the collapsing Greensill Capital group, to one of Indian-British steel magnate Sanjeev Gupta’s firms, according to accounts filed with the Italian corporate registry in recent weeks. Gupta's firm, Liberty Magona SRL, secured a guarantee from SACE for the loan under measures to help companies navigate the coronavirus crisis, according to Liberty Magona’s accounts for a period from Jan. 1, 2019 to June 30, 2020, which include information on material post-yearend events. German financial regulator BaFin has filed a criminal complaint against the Bremen-based Greensill Bank. Greensill Capital group filed for bankruptcy protection in Britain and Australia this month, citing a $5 billion exposure to Gupta’s GFG Alliance. It said Gupta’s firms had begun to default on its obligations. GFG Alliance employs 35,000 people across 30 countries, according to its website. In Britain, the opposition Labour Party has said the government should consider nationalising the company if it cannot secure the financial backing it is trying to attract. Italy is not the only country to have provided guarantees to Gupta’s firms. The Scottish government gave a 575 million pound guarantee to the group in 2016, Reuters reported in 2019. The Times reports that the Steel magnate and financier Greensill ‘broke borrowing rules’ as Gupta ploted to buy back assets on the cheap, exploiting a Covid-19 state guarantee scheme for struggling companies to extract £400 million of taxpayer-backed loans — eight times the limit. British ministers have rejected a request from mining magnate Sanjeev Gupta for a 170 million pound ($234.36 million) emergency loan to prevent his group, GFG Alliance, from collapsing.


Swedish ECA under pressure to break ties with Belarus

(Intellinews, Berlin, 15 March 2021) International multinational firms including Swedish ECA EKN are coming under increased pressure to break business ties with Belarus as opposition leaders apply a "name and shame" campaign as part of their struggle to oust incumbent President Alexander Lukashenko. Belarus has been wracked by mass demonstrations since last year’s disputed August 9 presidential elections. German heavy engineering firm Siemens and Norwegian agricultural company Yara have found themselves in the firing line in recent months, as both have significant business with Belarus. The Eurasian Development Bank (EDB), which was set up as a joint venture between Russia, Kazakhstan and Belarus to invest into things like infrastructure, funded its credit line by raising financing from the German state-owned banks KfW IPEX Bank and Landesbank Hessen-Thüringen (Helaba), while the loan was insured by the state export credit agency of Sweden (EKN). Meanwhile, the Russian State Duma has ratified a protocol to amend the Belarusian-Russian intergovernmental agreement on state export credit to the Belarusian government to build a nuclear power plant.


EXIM: The Fox Is Watching the Henhouse: Green Energy Edition

(National Review, Washington, 9 March 2021) Veronique de Rugy of the conservative leaning National Review notes that "asking Ex-Im officials to identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy is like asking the fox to guard the henhouse." She adds: "Indeed, Ex-Im itself has long been, and continues to be, knee-deep in the business of extending financing in the international and domestic oil and gas sector... Some $12 billion of this exposure - 26% of the bank’s portfolio - subsidizes the oil and gas industry...For example the Mexican state-owned oil company Petróleos Mexicanos, which has been hammered for years by mismanagement, underinvestment and low oil prices. For at least 15 years until 2017, the bank [EXIM] had more loans outstanding to Pemex than to any other borrower..."  Continuing she wonders: "let’s see if they make progress during multilateral negotiations with other export-credit agencies to agree to end their subsidies together. I won’t hold my breath, of course, since Ex-Im and other export-credit agencies around the world are enslaved to the special interests they support and they will drag their feet as long as they can. In the end, I predict that all we are likely to get from this [Biden Executive Order] is bad climate policies such as subsidies to well-connected green companies (see the 1705 loan program) and measures to destroy the domestic oil and gas industries while Ex-Im will continue to subsidize corrupt PEMEX."


What Investments Is The UAE Planning To Make In Israel?

(Albawaba, Amman, 15 March 2021) Last Thursday, the UAE announced a $10 billion fund that is allocated for Emirati investments in Israel, the latest country with which the UAE has signed a normalization agreement last September. Last December, the Etihad Credit Insurance (ECI) and the UAE's Federal export credit company, and the Israel Foreign Trade Risks Insurance Corporation (ASHR’A) have agreed to jointly create a strategic partnership in supporting exports, trade, and investment.


Man Sentenced for Role in Scheme to Defraud EXIM

(PR Newswire, Chicago, 15 March 2021) As a result of the efforts of the Office of Inspector General (OIG) for the Export-Import Bank of the United States (EXIM), in coordination with the Miami-Dade State Attorney's Office, a Florida business owner was sentenced to 36 months' probation and ordered to pay over $140,000 for his role in a scheme to defraud EXIM. EXIM paid $142,472 for the fraudulent claim to Romel Ramon Duran-Martinez (Duran), 59, owner of Miami-based Deoca Manufacturing Co. (Deoca), although Deoca had received full payment for the transaction. To conceal this fraud, Duran directed individuals to lie and otherwise deal with EXIM in bad faith, which delayed the discovery of the fraud.  Because Duran previously paid approximately $39,000.00 to EXIM in administrative repayments prior to the Court's ruling, the Court further ordered Duran to pay $110,970.66 in restitution to EXIM, $29,029.34 for investigative costs, as well as a $603 Special Assessment Fee.  


Hungarian Armed Forces Get EUR 349 Million ECA support

Hungary Today, Budapest, 17 March 2021) Norway is providing Hungary with 348.5 million euros of financing with a view to strengthening Hungary’s combat defence capabilities through Export Credit Norway (ECN) and the Norwegian Export Credit Guarantee Agency (GIEK), the Ministry of Finance said on Wednesday. The credit is tied to the 410 million euro NASAMS contract concluded by Hungary and Norwegian supplier Kongsberg Defense and Aerospace AS last November.


Our public finance institutions are fuelling climate change

(Times Live, Johannesburg, 22 March 2021) In Southern Africa, environmental racism has put poor, black, indigenous, and people of colour communities in the path of polluters and the climate crisis. This past Wednesday, civil society organisations hosted a virtual event to brief parliamentarians about the link between climate change and our public finance institutions (PFIs), specifically the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation (IDC) and the Export Credit Insurance Corporation (ECIC). One of the largest recipients of SA public financing is the Mozambique Liquid Natural Gas (LNG) Project, led by Total, in Cabo Delgado, Mozambique. The ECIC and DBSA are providing a total of $920m (R13.5bn) plus an undisclosed amount from the IDC. This financing is fuelling an industry that has displaced over 550 families from their homes, fishing areas and farmland, and left them without livelihoods and reliant on food aid. There is no evidence that the $50bn (R736bn) gas industry currently being developed will benefit Mozambicans: though the country has been a large fossil energy producer for years, only 30% of the population has electricity access. Regional violence is deeply interlinked with the gas industry, with human rights violations committed by insurgents, the Mozambican military and SA mercenaries. PFIs' attitude is seemingly ‘business as usual’. Worse, the ECIC refused to make their EIA available, and ignored a request for public participation in their decision to finance this devastating project.


JBIC injects liquidity into Japan Airlines

(Global Trade Review, London, 17 March 2021) Amid broader turbulence in the aviation sector, Asian public sector institutions rolled out hundreds of millions of dollars’ worth of support to airlines in the region last week. In one deal, the Japan Bank for International Cooperation (JBIC) inked a ¥25.3bn (~US$232mn) guarantee agreement covering four private financial institutions for the principal and interest of their loans to Japan Airlines (JAL). In doing so, the Japanese ECA is helping JAL obtain financing from Mizuho, MUFG, SMBC and Chiba Bank for the import of two aircraft from Airbus in France.


Does China subsidize export credit to reinforce its geopolitical aspirations?

(EXIM and Chatham House, 2019 and 2020) The U.S. 2019 approved reauthorization of EXIM included a goal of reserving not less than 20% of the agency’s total financing authority (i.e. $27 billion out of a total of $135 billion) "to support the extension of loans, guarantees, and insurance, at rates and on terms and other conditions, to the extent practicable, that are fully competitive with rates, terms, and other conditions established by the People’s Republic of China". The objective apparently being To directly neutralize export subsidies for competing goods and services financed by official export credit, tied aid, or blended financing provided by China or by other covered countries, i.e. to out-subsidize China's ECAs. In an October 2020 Chatham House conference speakers challenged the position that the Belt and Road Initiative (BRI) is a geopolitical strategy to ensnare countries in unsustainable debt and allow China undue influence. They noted that while the BRI is frequently portrayed as a geopolitical strategy that ensnares countries in unsustainable debt and allows China undue influence, the available evidence challenges this position, claiming that economic factors are the primary driver of current BRI projects. "China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives; and developing-country governments and their associated political and economic interests determine the nature of BRI projects on their territory." Lee Jones of Queen Mary University of London added that "If 'debt-trap diplomacy' means that China is deliberately luring developing countries into unsustainable debt so that it can grab key loan-funded infrastructure like ports for geo-strategic purposes, then it is a total myth. There is simply no evidence that this has happened in any country." "Debunking the Myth of 'Debt-Trap Diplomacy': How Recipient Countries Shape China's Belt and Road Initiative" was released in August by Chatham House.

Flash: ECA financed Mozambique LNG sector braces for delays amid escalating violence

(Global Trade Review, London, 31 March 2021) French energy major Total has been forced to suspend operations at its liquified natural gas (LNG) project in northern Mozambique for the second time this year, after a fresh attack by insurgents which killed dozens of local and foreign citizens, with as many as 60 still missing. The Financial Times reports the ongoing risk of violence has led Total to reduce its workforce on the LNG project at the nearby Afungi site “to a strict minimum”. The suspension marks yet another setback for Total’s project, which had only recently started to resume operations following a decision to evacuate workers from the site in January due to heightened security risks. Such delays throw into doubt the slated 2024 production date of the project, and come less than a year after the company signed a bumper financing package worth nearly US$15bn with a cluster of commercial banks, export credit agencies (ECAs) and the African Development Bank (AfDB). ECA Watch member Friends of the Earth International reported in our June 2020 issue on how transnational corporate gas extraction in Mozambique was fuelling human rights abuses, poverty, corruption, violence and social injustice. In our June 2020 What's New we also noted UKEF's intent to commit some US$1 billion to the project. Bloomberg has reported on two additional LNG projects: the $4.7 billion Coral FLNG Project by ENI and ExxonMobil, and the $30 billion Rovuma LNG Project by ExxonMobil, ENI, and the China National Petroleum Corporation. A spokesperson for the Japanese ECA, the Japan Bank for International Cooperation, tells GTR that it is “closely monitoring” the security situation in Mozambique, in cooperation with the stakeholders of the project, including the operator, the sponsors and an external security consultant.