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 January 2020

"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?

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

  • Luanda leaks show Dutch Export credit insurer Atradius involved in serious Angola human rights violations
  • UKEF to cease coal project support but current oil and gas projects will emit equivalent of 17 coal plants or 69m tonnes
  • Airbus faces record $4 billion fine after UKEF bribery probe
  • Davos: Financing fossil fuels risks a repeat of the 2008 crash
  • EDC writes off $200 million - won't say what for or why!
  • 2019 Review of Developments In Islamic Finance
  • Nigerian LNG expansion to include ECA financing
  • Saudi ECA offers support for TAPI pipeline
  • India asks DGFT to check fake export credit refund claims

Luanda leaks show Dutch Export credit insurer Atradius involved in serious Angola human rights violations

(Guardian, Luanda, 20 January 2020) Until the summer of 2013, Areia Branca, a fishing village just outside Luanda, the capital of Angola, was home to a thriving fishing community of 3,000 families. Now there is no trace of their houses, only sand, a pile of gravel, egrets, a bulldozer and a police post, bulldozed to make way for the Marginal da Corimba project, a multibillion-dollar real estate and highway development along Luanda’s coastline led by Isabel dos Santos, the daughter of Angola’s former president José Eduardo dos Santos. The Luanda Leaks investigation based on a huge cache of financial records belonging to dos Santos, Africa's richest woman, suggest her company stood to benefit from redevelopment of the vacated land. Many of Areia Branca’s former residents have moved to the other side of the lagoon, packed on to a tiny patch of land, known as Povoado. Previously a waste dump through which two sewage channels flowed, it has become home to 500 families sharing tiny shacks made of corrugated tin. Children play among piles of rotting rubbish. Infectious diseases – malaria, tuberculosis, meningitis – are rife. Documents released by the International Consortium of Investigative Journalists suggest dos Santos’ Urbinveste received at least $12 million from the Angolan government for work on the project. British architects Broadway Malyan and Dutch dredging company Van Oord claim not to have been aware of the forced evictions on behalf of the dos Santos real estate and construction company Urbinveste. Following revelations in the Dutch business press, a Both ENDS opinion piece in the Dutch business newspaper FD notes that the official export credit insurer Atradius DSB has not complied with OECD Guidelines for Multinational Enterprises. It appears that the Dutch ECA failed to do sufficient due diligence on environmental and human rights impacts and bribery risks before issuing an insurance to facilitate Van Oord and the Dutch ING bank's involvement in this project.


UKEF to cease coal project support but current oil and gas projects will emit equivalent of 17 coal plants or 69m tonnes

(Energy Live News, London, 24 January 2020) UKEF is financing fossil fuel projects overseas that are estimated to emit around 69 million tonnes of greenhouse gases every year, according to a new investigation by BBC Newsnight and Greenpeace. Prime Minister Boris Johnson recently announced the government will put an immediate end to using taxpayers’ money to support coal mining and coal-fired power stations in developing countries. The investigation found that no coal plants have been financed since 2012 but all the fossil fuel projects supported by UKEF which are oil and gas-related will emit the equivalent greenhouse gas emissions from 17 coal plants. A report from the Environmental Audit Committee (EAC) last year found 96% of UKEF’s energy investment between 2013 and 2017 went to fossil fuel projects – a fifth of all its investments. The Catholic charity CAFOD pointed to the fact that Johnson said the UK was still going to help countries with oil and gas production, not phase out all forms of public support for fossil fuels overseas


Airbus faces record $4 billion fine after UKEF bribery probe

(Reuters, London, 28 January 2020) Airbus faces a record $4 billion fine and lower 2019 profits after unveiling a preliminary deal with French, British and U.S. authorities following a crippling three-year probe into allegations of bribery and corruption over jetliner sales. The European planemaker has been investigated by French and British authorities for suspected corruption over jet sales dating back over a decade. It has also faced U.S. investigations over suspected violations of export controls. British and French investigations began after Airbus alerted regulators to misleading and incomplete declarations it had made to Britain’s export credit agency over payments to sales agents. “To my knowledge, an approximate $4 billion global settlement amount would be the largest global bribery settlement amount in history,” said bribery law expert Mike Koehler, a professor at Southern Illinois University School of Law. Airbus has fired more than 100 people over ethics and compliance issues as a result of its own probe into the allegations, which widened to other divisions. But the internal probe led to anger within the Franco-German firm and its jet sales teams who denied any influence over the tightly controlled agent system, which political sources have described as part of a wider French influence network abroad. It also threatened to reopen Franco-German tensions over Airbus as French sources complained the row diverted attention from a separate probe into fighter jet dealings with Austria, partially overseen by German-born Tom Enders who later served as chief executive. Enders has denied any wrongdoing. A further German probe into potential misuse of client documents is ongoing.


Davos: Financing fossil fuels risks a repeat of the 2008 crash

(World Economic Forum, Geneva, 3 January 2020) To continue financing fossil fuel expansion is today’s equivalent of betting the bank - and the global economy - on subprime mortgage-backed securities over a decade ago; it is fuelling a crisis that, even if it generates short-term profit, will inevitably cause economic catastrophe alongside the climate emergency. Since the Paris Agreement was signed, 33 major global banks have collectively poured $1.9 trillion into fossil fuels. To avoid any misinterpretation, governments should provide central banks with an explicit mandate to extend their horizon on financial stability to fully encompass climate risk and to be a force for decarbonization. Reporting under the Task Force for Climate Related Financial Disclosure should be mandatory. Governments should end supply-side subsidies and export credit financing for fossil fuels and incentivise investment in renewable energy.


EDC writes off $200 million - won't say what for or why!

(iPolitics, Ottawa, 22 January 2020) A report from Public Accounts of Canada for the 2018-19 fiscal year contains a line item for $196,010,248 that was written off from Export Development Canada’s (EDC) Canada Account, which offers financing for higher-risk projects and sales that the international trade minister deems is in best interest of the country. Guillaume Bérubé, a spokesperson for Global Affairs Canada refused to disclose to iPolitics what the item was, but said the decision to write-off the amount was made on recommendation that it was in the “best interests of Canada and Canadians.” In an April 2018 report he federal auditor general said Export Development Canada has significant problems when it comes to risk management because it hasn’t kept up with evolving industry practices.


2019 Review of Developments In Islamic Finance

(ProShare, Lagos, 5 January 2020) According to the Islamic Financial Industry Stability Report, the current global size of the market is $2.19trn,  which attests to a remarkable growth post-2008 financial crisis. Malaysia is currently the leading hub for Islamic Finance globally. At the end of 2017, it continued to be the main driver for both Sukuk outstanding and issuance for the year, with a global market share of 51% and 36.2% respectively, according to the Malaysian Reserve Bank report. Africa's market size for Islamic Finance as of 2011 was $18bn, while the potential for Nigeria since then is over $17bn. Nigeria and Africa are the new frontiers for the growth of Islamic Finance globally. The apex regulator of Nigeria's capital market, the Securities and Exchange Commission (SEC) restated its commitment in 2019 to provide the regulatory framework that will support the growth and development of the non-interest finance market.


Nigerian LNG expansion to include ECA financing

(The Nation, Lagos, 20 January 2020) The Nigeria Liquefied Natural Gas Limited (NLNG) has appointed one of Japan’s leading banks and the core unit of Sumitomo Mitsui Financial Group – Sumitomo Mitsui Banking Corporation (SMBC) and one of Nigeria’s leading banks – Guaranty Trust Bank Plc, as financial advisers for the Train 7 LNG processing project estimated to cost between $10 billion and $12 billion. The Train 7 project will be financed partly from NLNG balance sheet and partly through third party corporate loans from Export Credit Agencies and a number of key International and local banks. Discussions on these financial deals are ongoing. Barring unforeseen circumstances, Train 7 is expected to be completed within five years from start of construction. On completion, it will increase the company’s production capacity at its plant on Bonny Island, Finima, Rivers State from 22 million metric tonnes to 30 million metric tonnes per annum. Nigeria LNG is owned by four shareholders – the Federal Government represented by NNPC (49 per cent); Shell (25.6 per cent); Total Gaz Electricite Holdings France (15 per cent) and Eni International N.A. N.V. S.àr.l (10.4 per cent).


Saudi ECA offers support for TAPI pipeline

(EurasiaNet, New York, 14 January 2020) Turkmenistan's state media reported that the president had signed a decree authorizing the State Bank for Foreign Economic Affairs to conclude a loan with the Saudi Development Fund for the Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline. This is only the latest offer of assistance from Riyadh. Documents seen by Eurasianet reveal that the Saudi-backed Islamic Corporation for the Insurance of Investment and Export Credit, or ICIEC, has committed to $500 million in financing for the project. The ICIEC is a member of the Saudi-led investment fund, the Islamic Development Bank, or IDB, which has offered as much as $1 billion in financing for TAPI. Even all this Saudi money may not be sufficient to cover the ultimate cost of TAPI, which has been estimated at anywhere between $7.5 billion and $10 billion. The security situation along TAPI’s route is not the only thing spooking lenders. Turkmenistan’s endemic nepotism and corruption is also a disincentive.


India asks DGFT to check fake export credit refund claims

(New Kerala, New Delhi, 5 January 2020) After unearthing firms that made fake export credit claims, India's Department of Revenue has asked the Directorate General of Foreign Trade (DGFT) to seek regular compliance and verification reports from regulators. India refunds Integrated Goods and Services Tax paid by "star exporters" (exports of more than $3 million per year) as a form of export subsidy. Ongoing investigations have thrown up at least 9 star export houses as 'non-traceable' at their premises declared on record. All these star export houses have availed IGST refunds, which are now being questioned by tax officers. There are instances where an exporter with over Rs 50 crore of exports of readymade garments has taken refund of Rs 3.90 crore while the entity's total GST payment in cash was a mere Rs 1,650. The Revenue Department has identified several star-rated export houses that are bogus or shell export houses claiming fake refunds. Alarmed at the misuse of IGST refunds, the CBIC has requested to DGFT to install a more robust accreditation process. Meanwhile,  India's Commerce and Industry Minister recently announced that the scheme for providing export credit at low interest rates announced in September last year are being firmed up and would be implemented soon.


What's New December 2019

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

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

Email info-at-eca-watch.org

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

  • Controversy over Chinese subsidies for Huawei
  •  US Ex-Im Bank gets seven-year extension
  •  European Parliament asks Member states to end ECA support for fossil fuel projects
  •  Sweden proposes climate and export strategy which includes ban on ECA support for fossil fuel exploration and extraction
  •  Insurers drop coal in droves to “avoid climate breakdown”
  •  Korean ECA to Extend $375 Mil. to Daewoo E&C’s LNG Plant Project in Nigeria
  •  Gaslog LNG carrier announces $1.05 billion ECA backed debt
  •  Saudi Arabia looks for ECA finance to reduce deficits
  • UAE, Egypt to strengthen trade relations via ECA MoU
  •  Central Bank of Egypt launches ECA
  •  JBIC joins $1.3 billion financing for Bangladesh urea industries
  •  Chubb takes stake in ATI to boost African trade

Controversy over Chinese subsidies for Huawei

(Zdnet, York PA, 26 December 2019) Huawei Technologies has lashed out at a Wall Street Journal report that suggests the tech giant's success is fuelled by billions of dollars in financial support from the Chinese government, arguing that its ties are no different from any other "private company" that operates in China. The WSJ article noted that besides subsidies, Huawei since 1998 has received an estimated $16 billion in loans, export credits, and other forms of financing from Chinese banks for itself or its customers. But the WSJ also notes that Huawei’s largest American competitor, Cisco Systems, received $44.5 billion in state and federal subsidies, loans, guarantees, grants and other U.S. assistance since 2000. Further, it notes that Swedish export authorities provided some $10 billion in credit assistance for Sweden’s tech-and-telecom sector as of 2018 and that Finland authorized $30 billion in annual export credit guarantees economywide from 2017. A 2005 study by the UK Secretary of State for Trade and Industry showed that the "opportunity cost" of UK export credits, i.e. government "subsidies", was around US$271 million per annum. This dispute highlights the well known fact that Chinese and official OECD member export credit agency budgets are subsidies which violate the WTO's Agreement on Subsidies and Countervailing Measures. The OECD ECA Arrangement creates a WTO loop-hole for OECD ECA subsidies if they meet the OECD's poorly monitored and largely secretive OECD ECA self-monitoring. The Arrangement is a self-professed "Gentlemen's Agreement" designed to restrict a race to the bottom in export subsidies, but is flawed by a lack of transparency. So yes, the Chinese subsidize Huawei just as OECD ECAs subsidize their own exporters. The difference is the US claim of internet security concerns wrt Huawei in their efforts to retain economic superiority in global markets. Google and Facebook's violations of internet privacy and security don't seem to rate the same US concerns.


US Ex-Im Bank gets seven-year extension

(Space News, Washington, 21 December 2019) The year-end spending package President Trump signed into law late December 20 includes a 7 year re-authorization for EXIM, a lending agency that has been largely sidelined as a source of cheap financing for U.S. satellite deals since Congress let Ex-Im’s charter lapse in 2015. The $1.37 trillion omnibus bill, which funds the U.S. government through Sept. 30, 2020, provides Ex-Im its longest authorization period ever, though still shorter than what some lawmakers had sought. The enacted legislation also enables the bank to keep lending in the absence of a full board of directors by allowing other government officials to temporarily fill vacancies in order to maintain a quorum. New rules for Ex-Im Bank state that if the bank lacks a quorum for 120 consecutive days during a president’s term, a temporary board will form consisting of the treasury and commerce secretaries, the U.S. trade representative and the bank’s confirmed board members. That temporary board would remain until at least three board members are confirmed or until the U.S. president’s term expires... Proponents of Ex-Im Bank have in recent years sought to use the export-credit agency as a soft power tool to counter Chinese export credit and, by extension, Chinese influence globally. The legislation directs the bank “to focus on the important economic and national security challenges posed by China,” Kimberly Reed, Ex-Im’s president and chairman, said in a statement on Dec. 20. The board of directors of the Export-Import Bank of the United States (EXIM), included Nicaragua in its Country Limitation Schedule (CLS) Program, which, as of December 23, will stop working with Nicaragua. With this decision, Nicaragua joins the “undesirables club of the EXIM,” which also includes Afghanistan, Bolivia, North Korea, Cuba, Eritrea, Haiti, Iran, Libya, Nauru, Central African Republic, Somalia, Sudan, South Sudan, Syria, Tajikistan, Venezuela and Yemen.


European Parliament asks Member states to end ECA support for fossil fuel projects

(European Parliament, Brussels, 28 November 2019) The European Parliament resolution of 28 November 2019 on the 2019 UN Climate Change Conference in Madrid stresses that the EU’s budget should be consistent with its international commitments on sustainable development and its mid- and long-term climate and energy targets. Article 54 welcomes the decision taken by the EIB to end financing for most fossil fuel energy projects from the end of 2021 and specifically asks "the Member States to apply the same principle when it comes to export credit guarantees."


Sweden proposes climate and export strategy which includes ban on ECA support for fossil fuel exploration and extraction

(ECA Watch, Ottawa, 30 December 2019) The Swedish government has presented a climate policy action plan with 132 measures to the Riksdag "taking a holistic approach to how emissions will be reduced throughout Swedish society." We have been unable to find an outline of these measures but have been informed that the also recently updated trade and investment strategy includes a ban on export credits for fossil fuel exploration and extraction by 2022 (at latest) including for example, mining and construction machinery, trucks, dump trucks and wheel loaders, drilling equipment, excavators, where the purpose is to use these for the extraction of coal and oil or gas. It also includes fire protection equipment for oil drilling platforms. We hope to be able to provide further information in our next issue.


Insurers drop coal in droves to “avoid climate breakdown”

(Unfriend Coal, London, 2 December 2019) The number of insurers withdrawing cover for coal has more than doubled in 2019 as the industry’s retreat from the sector accelerates and spreads beyond Europe, the Unfriend Coal campaign reveals today in its third annual scorecard on insurance, coal and climate change. Coal exit policies have been announced by 17 of the world’s biggest insurers controlling 46% of the reinsurance market and 9.5% of the primary insurance market. Most refuse to insure new mines and power plants, while industry leaders have ended cover for existing coal projects and the companies that operate them, and adopted similar policies for tar sands. Action has escalated since international NGOs launched the Unfriend Coal campaign in 2017. Insurers have also divested coal from roughly $8.9 trillion of investments – over one-third (37%) of the industry’s global assets. Insuring Coal No More: The 2019 Scorecard on Insurance, Coal and Climate Change is published by 13 civil society organisations from 10 countries. It was launched to an industry audience at the Insurance and Climate Risk conference in London, as the UN Climate Summit commences in Madrid. As of November 2019, at least 111 globally significant financial institutions – including commercial banks, development financiers, insurers, export credit agencies and central banks – had divested from coal or reduced their exposure to the sector in other ways. Yet in July 2019, 2,459 coal plants with a combined capacity of 2,027 gigawatts were in operation, and another 980 with a combined capacity of 925 gigawatts were planned or under construction.


Korean ECA to Extend $375 Mil. to Daewoo E&C’s LNG Plant Project in Nigeria

(Business Korea, Seoul, 23 December 2019) The Korea Export-Import Bank announced on Dec. 22 that it will provide US$375 million in loans to Daewoo Engineering & Construction’s LNG plant project in Nigeria. For the first time as a Korean company, Daewoo E&C won the LNG plant as a prime contractor in September. It will carry out the project on an engineering, procurement and construction (EPC) basis. The LNG plant market had been dominated by five or six builders from developed countries including the United States, Japan, and Italy. The project involves building an LNG plant with an annual production capacity of 7.6 million tons and additional facilities for the plant on Bonny Island of southern Nigeria. When the plant is completed, the nation’s LNG production will soar from 22 million tons to 30 million tons annually. Apart from the Korea Export-Import Bank, the Korea Trade Insurance Corp. is considering extending a loan of a similar size. Korean export credit agencies (ECAs) are expected to provide around US$750 million to the project. This project is also the first to be supported through a special account set up by the Korean government to help Korean companies land more overseas orders.


Gaslog LNG carrier announces $1.05 billion ECA backed debt

(Hellenic Shipping News, Cyprus, 17 December 2019) LNG carrier GasLog Ltd. announced that it has signed an Export Credit Agency-backed debt financing of $1.05 billion with twelve international banks for its current newbuilding programme (the “Newbuild Facility”). The Newbuild Facility covers the balance due to the shipyard on delivery and consequently the final instalments of the seven newbuildings are fully funded. Five of these seven newbuildings are scheduled to deliver from the yards into firm multi-year charters in 2020 and the remaining two into firm multi-year charters in 2021. GasLog’s owned fleet consists of 32 vessels, with 25 liquefied natural gas carriers on the water and seven LNG carriers on order. This includes 13 LNG carriers in operation that are owned by its New York-listed unit GasLog Partners.The deal is backed by the Export Import Bank of Korea (“KEXIM”) and the Korea Trade Insurance Corporation (“K-Sure”), who are either directly lending or providing cover for over 60% of the facility. Gaslog's latest tanker acquisition was recently launched at the South Korean Samsung Heavy Industries shipyard.


Saudi Arabia looks for ECA finance to reduce deficits

(Bloomberg, Riyadh, 11 December 2019) Saudi Arabia may tap international debt markets as early as next month as it seeks funding to help bridge its widening budget deficit. In addition to selling bonds the debt office is also looking at alternative options including export credit agency financing. Fahad Al-Saif, head of the Finance Ministry’s debt management office, said “We are now engaged in ECA financing that actually makes sense to be plugged into the portfolio. Also infrastructure finance, project finance -- it depends. There are certain governmental projects that we could finance away from the debt capital markets.”


UAE, Egypt to strengthen trade relations via ECA MoU

(Gulf Today, Dubai, 16 December 2019) UAE and Egypt have agreed to strengthen trade relations and boost bilateral exports between the two countries through a Memorandum of Understanding (MoU) signed between Etihad Credit Insurance (ECI), the UAE Federal Export Credit company and the Export Credit Guarantee Company of Egypt (ECGE). UAE-Egypt non-oil trade in 2018 amounted to Dhs20.1 billion (US$5.44 B), a 14.6 per cent growth compared to Dhs17.6 billion (US$4.8 B) in 2017 indicating a strong overall strategic partnership between the two countries, according to data released by the UAE Ministry of Economy. Furthermore, the UAE ranks first globally in terms of investments in Egypt with total FDI amounting to Dhs24.3 billion (US$6.6 B) reflecting the activity of 990 Emirati companies that invested in Egypt at the end of 2018. Egypt, on the other hand, ranks 28th globally in terms of investing in the UAE with total FDI valued at Dhs3.3 billion (US$899 M) during the same period.


Central Bank of Egypt launches ECA

(Global Trade Review, London, 11 December 2019) The Central Bank of Egypt (CBE) has signed off on a new US$600mn export credit risk company in a bid to bolster Egypt’s intra-Africa trade links. The new company, which will be based out of Cairo, will seek to help Egyptian companies win contracts for major projects with African governments, which the African Export-Import Bank (Afreximbank) claims are [could be?] worth US$60bn annually. Trade between Egypt and other African countries is only around 2% of total Egyptian exports.


JBIC joins $1.3 billion financing for Bangladesh urea industries

(The Daily Star, Dhaka, 2 December 2019) The Hongkong and Shanghai Banking Corporation (HSBC) has arranged USD1.3 billion financing for Bangladesh Chemical Industries Corporation (BCIC) to set up its Ghorasal Potash Urea Fertilizer Project (GPUFP). This is the largest financing backed by an Export Credit Agency ever completed in Bangladesh. BCIC has signed loan agreement for $1.3 billion with Japan Bank for International Cooperation (JBIC), Bank of Tokyo-Mitsubishi UFJ Ltd (MUFG) and HSBC. Of the total credit HSBC will provide $300 million and rest $1 billion will be arranged by JBIC and MUFG.


Chubb takes stake in ATI to boost African trade

(Global Trade Review, London, 11 December 2019) Global insurer Chubb has made a US$10mn equity investment in the African Trade Insurance Agency (ATI), becoming the first global property and casualty insurer to invest in the multilateral political risk and credit insurance agency. ATI supports trade and investment in African member state nations by offering complete risk solutions, including credit insurance and political risk products. It currently has 16 African nations and 10 institutional members as shareholders, and claims to support trade and investment in the countries it represents equivalent to between 1 and 2% of their GDP.


What's New November 2019

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

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

Email info-at-eca-watch.org

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

  • France targets fracking & flaring with ECA guarantee overhaul
  • UAE running secret prison in French ECA supported LNG facility in Yemen
  • The ECA fossil elephant in the Dutch room
  • 20% of Dominican Republic territory at risk from fossil fuel auction
  • AfDB approves $400m loan for Mozambique LNG facility
  • EU Council to host business and human rights conference
  • Dutch Ship Firm Kept Fees Secret
  • Nigeria's Ajaokuta Steel completion to receive Russian ECA support
  • World Bank warns of Kenyan [ECA] debt distress
  • EU takes Greece off short-term export credit ‘blacklist’
  • UK export credit agency to provide US$303m in support of Formosa II
  • EX-IM signs new co-financing pact with Japanese rival NEXI
  • UK judge rules EDC can proceed with sale of Gupta jet

France targets fracking & flaring with ECA guarantee overhaul

(Reuters, Paris, 5 November 2019)  France is considering halting funding guarantees for energy projects abroad that involve fracking or flaring, according to a finance ministry report. The government aims to make its program of state guarantees for export financing more environmentally friendly and is dropping support for coal projects as a first step. Next year it will also look into stopping export guarantees for oil and gas activities that are banned in France, including fracking and gas flaring, the report submitted to lawmakers states. In the medium term, a ban on state guarantees for developing new foreign oil fields might also be considered.


UAE running secret prison in French ECA supported LNG facility in Yemen

(Sum Of Us, Paris, 7 November 2019) - A report published today by L'Observatoire des armements and SumOfUs in collaboration with Les Amis de la Terre France, documents the militarisation of Total's activities in Yemen since the 1980s. Open sources and witness testimony reveal that Total’s gas liquefaction site at Balhaf has been set up as a military base (since 2009) and a secret prison (2017-2018). The report also questions the role of the French government, which was involved in the militarisation of the site, and is the guarantor of Total’s Yemen LNG gas liquefaction project. French export subsidies are currently being discussed in the Assemblée nationale as part of the 2020 Finance Bill. Le Monde reports that Total has received official French export credit guarantees totaling 216 million Euros. Le Monde has drawn information from testimonies collected by Amnesty International, as well as a group of UN experts on Yemen, as well as non-governmental organizations and Yemeni activists who confirmed the existence of the prison inside a military base set up by the UAE in the same place. These reports draw on several accounts of arbitrary detention and inhuman and degrading treatment – such as torture and denial of medical care – by Emirati soldiers.


The ECA fossil elephant in the Dutch room

(Both Ends, Amsterdam, 17 November 2019) This report shows that the Dutch Export Credit Agency ADSB insured fossil fuel-related projects with a total insured value of € 10.8 billion in the period 2012-2018. This is more than 60% of its total insured value for that period and € 1.5 billion a year on average. The policy incoherence  thus created by the Dutch government nullifies the Dutch contributions to international climate ambitions. The Dutch government indicates that it will end all financial support to coal projects and exploration and development of new oil and gas fields abroad from its foreign trade and development cooperation instruments as of 2020. Unfortunately, this commitment is not applied to the export credit facility, which supports the by far largest volume of fossil fuel related business transactions abroad. By not applying the same principles to its public export credit support, the Dutch government undermines its own foreign climate ambitions. This report calls upon the Dutch government to align the policies of its Export Credit Agency  with the Paris climate goals. Furhtermore, it provides suggestions for possible ways to go about it.


20% of Dominican Republic territory at risk from fossil fuel auction

(Bank Track, Nijmegen, 26 November 26, 2019) Ahead of the November 27 auctioning of exploration licenses for 14 onshore and offshore oil and gas blocks in the Dominican Republic, environmental groups warned financiers not to back companies which may end up being awarded licenses. Dominican NGO CNLCC, Italy's Re:Common and BankTrack have raised concerns over the major climate risks and adverse environmental and social impacts which would result from the opening up of fossil fuel blocks in the country’s Cibao, Enriquillo, Azua, and San Pedro basins which together cover more than 20 percent of Dominican territory. A major corruption scandal has plagued the Dominican Republic involving the Brazilian construction company Odebrecht, which received the Punta Catalina coal-fired power plant contract due to an opaque, allegedly criminal tendering process. European banks were compelled in 2018 to freeze their project finance disbursements.


AfDB approves $400m loan for Mozambique LNG facility

(Hydrocarbons Technology, London, 27 November 2019) The African Development Bank (AfDB) has approved a $400m loan to support construction of the integrated liquefied natural gas (LNG) plant and liquefaction facility in Mozambique. The Mozambique LNG Area 1 Project is led by the French corporation Total. Other partners in the project are Mitsui, Oil India, ONGC Videsh, Bharat Petroleum, PTT Exploration, and Mozambique’s national oil and gas company ENH. NGOs have provided overwhelming evidence that Mozambique's LNG projects will emit at least 5.2 million tons of carbon dioxide per year, causing climate chaos,


EU Council to host business and human rights conference

(European Council, Brussels, 28 November 2019) The Finnish Presidency of the European Council is hosting a conference on 2 December on business and human rights. The agenda includes a panel on "Promoting Human Rights Due Diligence through State Financing", noting that "A critical way for states to incentivise businesses to respect human rights is through the provision of public financing for private sector investments abroad through development finance, export credit and other forms of support. This discussion will explore the importance of leadership by individual state-based financial institutions and by government in this area.


Dutch Ship Firm Kept Fees Secret

(Bahamas Tribune, Nassau, 12 November 2019) The Dutch company that supplied nine Royal Bahamas Defence Force vessels, Damen Shipyard Group, misrepresented to the Dutch government how much it paid a foreign intermediary that worked on the project. The World Bank disbarred Damen for 18 months in 2016 for failing to disclose an agent and the amount of commissions due to the agent. The Dutch government then temporarily suspended Damen from accessing its export credit insurance. Dutch Secretary of Finance Wopke Hoekstra said ADSB subsequently conducted an investigation and found 14 cases where Damen gave “insufficient or incorrect information in respect of paid agency commissions.” Damen’s project with The Bahamas was one of these cases. Dutch investigators believe Damen paid 12 percent of its contract with the Bahamian government to NSG Management & Technical Services Ltd as commissions. It is not clear what NSG’s work on the project involved. Dutch investigators are said to be examining whether Damen allegedly bribed foreign officials in multiple jurisdictions through their foreign agents. NSG is said to be at the centre of its inquiry.


Nigeria's Ajaokuta Steel completion to receive Russian ECA support

(Nairametrisc, Lagos, 2 November 2019) Recent reports are that the completion of Nigeria's long-abandoned Ajaokuta Steel Complex would be funded by the Russia's MetProm Group with funding from the Russian Export Centre.  Nairametrics understands that although massive plants and other gigantic equipment in the complex were idle and most had been overgrown with weeds, most of the facilities were still functional, and as such over the years, the problems facing the company had not prevented the workers from receiving salaries. The Ajaokuta Steel Complex was originally built by another Russian firm, TyazhPromExport (TPE), but in 2016 the Federal Government decided to jettison TPE because the company did not want to complete the steel mill. A rail line and functional seaport are still needed to ease the operation of the steel mill.


World Bank warns of Kenyan [ECA] debt distress

(Daily Nation, Nairobi, 31 October 2019) In its Kenya Economic Update for October 2019, to be released today, the World Bank notes that, “with 43% of domestic debt expected to mature within a year, the government could face challenges in rolling over such bonds in an environment of no interest rate caps, low subscription rates and over-exposure of commercial banks to these assets”. Signs of distress in paying debt came to the surface last month after it emerged that Kenya had defaulted on a Sh500 million (US$4.9m) debt owed to a Belgian export credit company for the construction of a water supply system in Mavoko. Credendo Export Credit Agency, an export credit agency of the Kingdom of Belgium, had written to the Treasury demanding the payment by November 1, accusing the government of failing to pay despite repeated reminders. As at 30th September 2019, the Star reported that most of Kenya’s bilateral debt is on concessional terms with no interest chargeable on Sh4.2 billion and an interest rate of just 2.08 per cent on Sh660.5 billion from Exim Bank of China (which constituted 74 per cent of total bilateral debt and got the relic like railway trains chugging along).


EU takes Greece off short-term export credit ‘blacklist’

(Greek City Times, Sydney, 27 November 2019) The European Commission on Tuesday announced its decision to return Greece to the list of “marketable risk” countries for short-term export credit insurance, following the successful completion of its fiscal adjustment program in August 2018 and the continuing implementation of reforms. The European Commission said its decision will be activated on January 1, 2020, and will mean that “short-term export credit risks towards Greece will be considered as marketable to be covered by private insurers.”


UK export credit agency to provide US$303m in support of Formosa II

(Renewables Now, Fresno, 5 November 2019) The UK’s export credit agency, UK Export Finance (UKEF), will provide a TWD-9.2-billion (US$303m/EUR 272m) project finance guarantee to support the construction of the 376-MW Formosa II offshore wind project in Taiwanese waters. UK companies will be involved in constucting the Formosa 2 offshore windfarm, helping to unlock the export potential of this growing sector of the UK economy.


EX-IM signs new co-financing pact with Japanese rival NEXI

Politico, Washington, 5 November 2019) EXIM has signed an agreement with Japan’s export credit agency, NEXI, that allows either agency to act as the lead on co-financing projects. Under the previous co-financing agreement, only Ex-Im could act as the lead. The expanded scope is expected to facilitate greater business opportunities for exporters of both nations, Ex-Im said. The new arrangement makes it “possible for Japanese companies to collaborate with American companies in infrastructure projects” in the Indo-Pacific region, NEXI Chairman and CEO Atsuo Kuroda said in a statement.


UK judge rules EDC can proceed with sale of Gupta jet

(Corporate Jet Investor, London, 21 November 2019) A judge in the UK courts has ruled that the sale of Global 6000 ZS-OAK can now go ahead, after Export Development Canada (EDC) settled its litigation with Westdawn Investments. Westdawn Investments is a South African company that is owned by the Gupta family, the wealthy Indian-born South African family with interests in computing, media, and mining and whose members who are under investigation for misappropriation of large amounts of state assets have fled the country. They have refused to return to face court hearings and to participate in criminal investigations. According to EDC, it ended its business relationship with Westdawn Investments in December 2017, after Westdawn Investments defaulted on its loan in October 2017. EDC’s statement notes that in the months and years following its decision to provide Westdawn Investments with the loan, allegations that the Gupta family had been involved in corruption and political interference in South Africa arose.