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 August 2013

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.

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  • Export credit agencies step into the breach
  • Turkish Export Credit Bank plans to give $300 million credit facility to Pakistan
  • Oman weighs credit risks on Egypt exports
  • OECD 2012 ECA Bribery Survey Responses Now Available
  • Nigeria seeks NEXIMs support on ECOWAS trade
  • U.S. Export-Import Bank Hindered by Budget Fight, Hochberg Says
  • Atradius DSB supports fewer applications but doubles risk exposure
  • Rinehart Record Debt Lures Even as China Slows: Australia Credit
  • ECAs and satellite financing

Export credit agencies step into the breach

(Business New Europe, Moscow, 17 August 2013) Seated next to Fred Hochberg in Prague is Danny Roderick, president and CEO of Westinghouse, the US nuclear company that's one the main reasons for Hochberg's visit to the Czech Republic. Westinghouse is in the midst of a battle with Russia's Rosatom to win the right to build two new nuclear reactors in the country, in a deal worth €8bn-12bn, and Ex-Im bank wants to play its part by offering low-interest loans to companies that buy American equipment and services... Hochberg, fresh from being confirmed in July by the US Senate for a 2nd term as president of Ex-Im Bank, presided over a banner year in 2012 - and 2013 looks like it could surpass even that. The bank’s overall financing in 2012 exceeded $35.7bn, backing $50bn of exports by US companies. Exports in the year continued their recovery from the depths of the global crisis in 2008, with US exports reaching a then record high of $188.7bn set in December 2012.

http://www.bne.eu/story5278/THE_INSIDERS_Export_credit_agencies_step_into_the_br...


Turkish Export Credit Bank plans to give $300 million credit facility to Pakistan

(Business Recorder, Karachi, 29 August 2013) The Export Credit Bank of Turkey (Exim Bank) is to give $300 million credit facility to Pakistan for 2013-14 for which a formal pact will be signed during the 3-day (September 16-18) official visit of Prime Minister Nawaz Sharif to Turkey... According to sources, considerable scope for further Turkish investments especially in the energy (hydel/coal and wind) and infrastructure sectors exists.

http://www.brecorder.com/market-data/stocks-a-bonds/0/1225979/


Oman weighs credit risks on Egypt exports

(Times of Oman, Muscat, 21 August 2013) In light of the political instability and current events in Egypt which have affected businesses, export credit agencies  (ECAs) of several countries are exercising considerable caution in providing new cover to their exporters to that country. A number of ECAs have cancelled credit limits to buyers in Egypt as the payment risks have been compounded by political risks which could inhibit buyers to fulfil their payment commitments. In October 2011, ECA Watch reported that Britain was pursuing Egypt for debts of up to £100m that funded the purchase of arms.

http://www.timesofoman.com/News/Article-21225.aspx


OECD 2012 ECA Bribery Survey Responses Now Available

(ECA Watch, Ottawa, 31 August 2013) The latest available OECD ECA bribery survey responses on how member ECAs implement the 2006 OECD Recommendation on Bribery and ECAs is available on their web site. However, despite the OECD's claims of transparency and effective gathering and dissemination of statistics, a confusing public link for what they say are the 2012 responses as of 30 June 2013 actually takes you to their blank 2007 questionnaire form. One has to persist and know how to uncompress all the individual country reports from another document in order to review the 2012 individual responses. It appears from the wording of the OECD announcement that only 6 of the 35 reporting countries (36 ECAs) responded to the 2012 survey. Most ECAs rely largely on reporting by corporate applicants who have little interest in providing information that might lead to rejections. In addition, some individual ECA forms (for example see p.10 Part 8 of the Atradius applicant form) only require the briefest of information on bribery, making it less likely that problematic situations will surface through this rather weak OECD monitoring and reporting process.




Nigeria seeks NEXIMs support on ECOWAS trade

(Premium Times, Abuja, 24 August 2013) The Federal Government on Friday asked the Board of the Nigeria Export-Import Bank (NEXIM) to support Nigeria in maintaining its leading position as the powerhouse in regional trade in West Africa... Mr. Ngama, Minister of State for Finance, said last year was the third time in a row that the bank was posting profit on its balance sheet and declaring dividends to its shareholders; a development that has put the bank on a path of sustained profitability. He said the management has also taken steps to clean up the balance sheet through the establishment of Debt Recovery Task Force which recovers bad debts and write-off irrecoverable legacy loan. He added that efforts have been made to improve the credit culture through training and enforcement of strict credit evaluation processes. However he asked the board to work towards securing a credit rating that would enable the bank go out and source for funds and increase its capital base.

http://premiumtimesng.com/business/143411-nigeria-seeks-nexims-support-on-ecowas...


U.S. Export-Import Bank Hindered by Budget Fight, Hochberg Says

(Bloomberg, Washington, 23 August 2013) The U.S. Export-Import Bank’s ability to compete with similar lenders from nations including China and Brazil has been hurt by questions stemming from last year’s reauthorization fight, according to the bank’s chairman. Fred Hochberg said reporters have asked him on recent trips abroad about the bank’s future, after it survived a Republican campaign last year to end its lending authority. Its $140 billion lending limit runs through September 2014. “That uncertainty is damaging to U.S. competitiveness,” Hochberg said today in an interview at the bank’s headquarters in Washington.

http://www.bloomberg.com/news/2013-08-23/u-s-export-import-bank-still-hindered-b...


Atradius DSB supports fewer applications but doubles risk exposure

(Atradius Dutch State Business, Amsterdam, May 2013) The 2012 Annual Review of Atradius Dutch State Business shows that while the number of approved applications actually declined in 2012 as compared to the previous year, the total aggregate nominal risk exposure in the same year more than doubled to a formidable € 16.6 billion. The Annual Review also reflects sustained efforst to expand the business of the Dutch ECA by developing new instruments, such as the 'Export Credit Guarantee' to facilitate bank financing for export transactions.

http://www.atradiusdutchstatebusiness.nl/Images/dsben/Annual%20Review%202012%20s...


Rinehart Record Debt Lures Even as China Slows: Australia Credit

(Bloomberg, Sydney, 11 August 2013) Gina Rinehart, chairwoman of Roy Hill Holdings Pty, is seeking about A$4 billion (US$3.56 billion) from export credit agencies, Banks are betting the economics behind Rinehart’s 21-year-long ambition outweigh concern that $250 billion of planned mines will create a glut as slowing growth in China saps demand in the biggest buyer of the raw material.

http://www.bloomberg.com/news/2013-08-11/rinehart-record-debt-lures-even-as-chin...


ECAs and satellite financing

(Satnews, Sonoma, 14 August 2013) After years that saw a clear domination by Export Credit Agency backed financing, which remains important for emerging regional players, financial transactions have picked up strongly in the satellite industry over the last 12 months. With the financial sector seemingly ready to take more risk again... Financing for satellite projects and the related challenges will be discussed from different points of view during the September 9-13 Summit for Satellite Financing welcoming executive-level speakers from leading financial institutions, ECAs and satellite operators.

http://www.satnews.com/story.php?number=1494772758&menu=1


US Ex-Im report grades competitiveness with other ECAs

(Shopfloor, Washington, 30 July 2013) Ex-Im Bank Chairman Fred Hochberg outlined the unprecedented challenges facing U.S. exporters and released the annual competitiveness report that stacks Ex-Im Bank up against other major export credit agencies (ECAs) around the world. In presenting the report he noted:

  • "it’s time [to] drop the fantasy that a purely free market exists in the world of global trade... In the real world, our private-enterprises are pitted against an array of competitors that are often government-owned, government-protected, government subsidized, government-sponsored, or all of the above."
Country: 

What's New July 2013

In this issue:

  • Ex-Im Bank Halts U.S. Funding Review for Vietnam Coal Plant
  • Australian coal projects could be ineligible to receive Chinese ECA support
  • Amnesty - UK Export Finance is sacrificing human rights on the altar of foreign trade
  • U.K. ECA Seeks Looser Rules To Level Playing Field
  • Boeing Sees Aircraft-Backed Bond Issues Doubling to $30 Billion
  • Australia's Rinehart clears hurdles on $10 bln iron ore project
  • Africa: Russian Investment Needs Credit Support
  • Parliament Approves $200mln Capital Increase for Export Guarantee Fund of Iran
  • Ministerial Meeting on Mobilizing Climate Finance Includes ECAs
  • US Ex-Im report grades competitiveness with other ECAs

Ex-Im Bank Halts U.S. Funding Review for Vietnam Coal Plant

(Bloomberg, Washington, 18 July 2013) The U.S. Export-Import Bank voted to stop consideration of financing for a coal power plant in Vietnam, the first such decision since President Barack Obama vowed to cut federal support for the projects... “By denying taxpayer backed financing for this dirty coal project, the Export-Import Bank put the action in the President’s Climate Action Plan,” said Doug Norlen, policy director of Pacific Environment, which is fighting these kinds of fossil-fuel projects. Until now, Obama’s push to double exports of U.S. goods and services had undercut his goal of reducing the greenhouse gases linked to climate change, as the government-backed lender expanded financing that, by its own accounting, added to greenhouse-gas emissions. As part of a “Climate Action Plan” released June 25th, Obama called for ending U.S. support of foreign coal-fired power plants, unless they are in the poorest nations or have expensive carbon-capture technology. Obama’s coal pledge also comes at a time when the World Bank is mulling a proposal to limit its lending for coal projects in developing countries.

http://www.businessweek.com/news/2013-07-18/ex-im-bank-halts-u-dot-s-dot-funding...


Australian coal projects could be ineligible to receive Chinese ECA support

(Banktrack and Market Forces, Melbourne, 24 July 2013) Chinese banks have been notified that several Australian-based coal export projects could be ineligible for credit under China’s Green Credit Directive. A letter from international banking sector watchdog BankTrack and Australian environment group Market Forces has been sent to eight major Chinese overseas lenders and export credit agencies, highlighting an array of environmental and social impacts that would result from new coal export projects. It also profiles the corporate citizenry records of GVK and Adani, two Indian conglomerates who are both proposing new coal export projects. In June, sixty prominent Australians called on ‘big four’ banks to end fossil fuel investment.

http://us6.campaign-archive2.com/?u=ca4ff3016df790ab4c04c0ddd&id=a2824353df&e=a1...


Amnesty - UK Export Finance is sacrificing human rights on the altar of foreign trade

A new hard-hitting briefing from Amnesty International launched July 15 accuses the UK Government of allowing businesses to dip under the human rights radar when it comes to trade and investment. The 30-page document A history of neglect: UK Export Finance and human rights shines a light on a little known agency operating out of the Department of Business, Innovation and Skills – UK Export Finance (UKEF). Despite numerous Select Committee and Inquiry reports over the last five years recommending reforms to make it more transparent and accountable, successive governments have rejected those recommendations.

UKEF has responded to this report and Amnesty has counter-responded.

http://www.amnesty.org.uk/news_details.asp?NewsID=20879


U.K. ECA Seeks Looser Rules To Level Playing Field

(Spacenews, Glasgow, 18 July 2013) Britain’s export-credit agency, U.K. Export Finance, is unable to match the low-interest loans for satellite projects that its U.S., French, Canadian and Japanese counterparts offer because of national regulations that forbid interference with the private sector, a U.K. Export Finance official said July 16. Addressing the U.K. Space Conference in Glasgow, Jon Boyce said the agency is working to loosen rules that up to now have left the agency a bystander as more-aggressive agencies in North America, Europe and Asia battle to defend their domestic industry in satellite export competitions. On July 5th, Australian satellite operator NewSat announced it had secured financing to the tune of $611 million for its Jabiru 1 satellite project. NewSat worked with the Export-Import Bank of the United States and the French export credit agency Coface to secure the funding and selected Lockheed Martin to build the satellite. The Jabiru 1 spacecraft is expected to launch in 2015.

http://www.spacenews.com/article/financial-report/36283news-from-uk-space-confer...


Boeing Sees Aircraft-Backed Bond Issues Doubling to $30 Billion

(Bloomberg, Sydney, 10 July 2013) Aircraft buyers’ issuance of bonds backed by planes will double to about $30 billion next year, as banks and ECAs withdraw funding Boeing said... The industry needs $4 trillion to $5 trillion by 2031 to buy about 40,000 new planes required by growing demand from emerging economies, IATA said... Of concern is the withdrawal of funding from commercial banks as they limit lending in line with the Basel Committee on Banking Supervision’s 2010 revision of minimum capital levels, known as Basel III. Banks will provide about $29 billion to finance about 28 percent of aircraft deliveries this year, according to Boeing... Government export credit agencies, which stepped in to finance aircraft purchases after the 2008 credit crisis froze capital markets, are also cutting back. Funding from ECAs this year will be lower than Boeing’s initial forecast, at about 20 percent of the $104 billion total, compared with about 30 percent during 2012, Zolotusky said.

http://www.businessweek.com/news/2013-07-10/boeing-sees-aircraft-backed-bond-iss...


Australia’s Rinehart clears hurdles on $10 B iron ore project

(Reuters, Sydney, 18 July 2013) Australian mining magnate Gina Rinehart's $10 billion Roy Hill iron ore project has overcome key hurdles holding up debt negotiations, a move that could pave the way for the mine to start producing by September 2015, sources said on Thursday... Export credit agencies (ECAs), including Export Import Bank of Korea (KEXIM), Japan Bank for International Cooperation (JBIC) and Nippon Export & Investment Insurance (NEXI) had been pressuring Roy Hill shareholders led by Rinehart's Hancock Prospecting Pty Ltd to fully guarantee that the project reaches completion, in return for up to $5 billion of loans... Getting Roy Hill into production is likely to boost further the fortunes of Rinehart, already Australia's richest person with a net worth estimated by Forbes at $17 billion. However, it could also add to an expected glut of the steel-making ingredient as rivals Rio Tinto, BHP Billiton and Fortescue Metals Group crank up production just as demand in top consumer China is set to cool.

http://uk.reuters.com/article/2013/07/18/australia-ironore-royhill-idUKS9N0DT01U...


Africa: Russian Investment Needs Credit Support

(SpyGhana, Moscow, 14 July 2013) Over the past few years Russian companies have shown an increasing interest towards investment and preparedness to compete with other foreign players in Africa, but they have also complained bitterly of lack of state financial support and investment credit guarantees from policy banks and money-lending institutions. China, India and Japan, and more recently the United States have provided funds to support companies ready to carry out projects in various sectors in African countries.

http://www.spyghana.com/africa-russian-investment-needs-credit-support/


Parliament Approves $200mln Capital Increase for Export Guarantee Fund of Iran

(FarsNews, Tehran, 6 July 2013) The Iranian Parliament has allocated $200 million in the Budget Law of the fiscal year 2013-2014 as a capital increase for the Export Guarantee Fund of Iran, EGFI Chairman and CEO Taher Shah Hamed said. This capital increase could be considered as a compensation for the substantial amount of claims paid by the EGFI during the last two years in order to indemnify Iranian exporters and outward investors for losses incurred. With this capital increase, EGFI will have a better capital adequacy ratio, which in turn will boost its ability for protecting its clients, through issuing guarantees and insurance policies. EGFI, established in 1973, as the first-established Export Credit Agency (ECA) in Middle East and North Africa (MENA) region, is the official Export Credit Agency of Iran, 100% government-owned and affiliated with the Ministry of Industry, Mine, and Trade.

http://english.farsnews.com/newstext.aspx?nn=13920415000063


Ministerial Meeting on Mobilizing Climate Finance Includes ECAs

(US State Department, Washington, 11 April 2013) Ministers and senior officials from more than a dozen donor countries met in Washington, D.C. on April 10-11 to discuss ways to meet the challenge of scaling up low-carbon investment in developing countries. The meeting was convened and chaired by the United States. Participants included ministers and senior officials from a broad range of government entities, including ministries of foreign affairs, environment, finance, and development, as well as representatives from development finance institutions and export credit agencies. Countries represented included Australia, Canada, Denmark, the European Union and Presidency, France, Germany, Italy, Japan, New Zealand, Norway, Poland, Switzerland, the United Kingdom, and the United States. From the U.S. communique, it appears little concrete action was agreed upon. A follow-up meeting is apparently scheduled for Denmark in September that will include a section on ECAs and climate finance.

http://www.state.gov/e/oes/rls/remarks/2013/207420.htm


US Ex-Im report grades competitiveness with other ECAs

(Shopfloor, Washington, 30 July 2013) Ex-Im Bank Chairman Fred Hochberg outlined the unprecedented challenges facing U.S. exporters and released the annual competitiveness report that stacks Ex-Im Bank up against other major export credit agencies (ECAs) around the world. In presenting the report he noted:

  • "it’s time [to] drop the fantasy that a purely free market exists in the world of global trade... In the real world, our private-enterprises are pitted against an array of competitors that are often government-owned, government-protected, government subsidized, government-sponsored, or all of the above."
http://www.shopfloor.org/2013/07/ex-im-report-grades-competitiveness-identifies-...


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