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 2018

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.

  • Aussie defence fund a reminder of ECAs’ murky history with the arms industry
  • Australian ECA underwriting arms exports is 'baffling', expert says
  • Turkish, French, Italian firms awarded missile system development project
  • Aramco Seeks Cheap ECA backed loans prior to IPO
  • Asia could attract $250B in coal power investment
  • G20 billions feed Viet Nam's coal-fired future
  • US Ex-Im may back a controversial Vietnamese coal plant
  • Exporters urging Ottawa and EDC to undo uneven application of Russian sanctions
  • Mexican chapter in the Odebrecht saga underscores need to bolster transparency at EDC
  • Does the OECD really support environmentally conscious economic policies?
  • Airbus, Boeing Hopeful on Return of State-Backed Plane Financing
  • China eyes stronger ties with Mekong countries with ECA support
  • Britain cancels plan to forgive North Korean ECA debt
  • Britain doubles ECA backing for India

ECAs go to Market

(Finance & Trade Watch and CEE Bankwatch, Dec. 2017) Export credits are big business. Members of the industry’s Berne Union, both state and private, insured approximately USD 1.9 trillion per year between 2012 and 2016, of which USD1 trillion was state ECA insured. That amount far exceeds the total investments of multilateral lenders such as the World Bank and the regional development banks and represents some 11% of world trade Between 2015 and 2017, Finance & Trade Watch and Bankwatch, together with their national partners, researched state export credit agencies (ECAs) in seven countries of the European Union (Austria, Czech Republic, Croatia, Hungary, Poland, Romania and Slovakia). The aim of this research was to assess how the procedures and performance of these institutions comply with the relevant national, European and international regulatory frameworks. These include transparency, accountability, environmental and social standards as reflected in the OECD (Common Approaches), the EU (ECA Regulation) and the UN (Sustainable Development Goals, the Aarhus Convention and the Paris Agreement). Their report finds: a lack of ECA transparency, dubious investements, particularly in fossil fuels, projects contrary to national greenhouse gas commitments under the Paris Agreement, and OECD and EU standards and monitoring which are voluntary and unable to guarantee that prohibited investments are being approved. This has led to their involvement in a number of economically and politically-compromising projects. This first-of-its-kind research examines ECAs in the ‘new’ EU Member States and compares these with an example from the EU 15 – the Austrian ECA OeKB – as well as examples from other EU 15 countries. It shows regulatory gaps and offers a range of policy recommendations. The full report is available here and a summary here.


G20 Countries' Public Coal Financing Reaches 5 Year High

(Natural Resources Defense Council, New York, 8 February 2018) In 2017, financing from G20 governments for overseas coal projects reached a 5 year high, totaling at least $13 billion in loans, credits, and guarantees. This financial support for coal projects directly undermines G20 climate commitments and ignores the reality that a rapid coal phase out is needed if the world is to reach the 1.5 degree temperature goal under the Paris Climate Agreement. This is the 2nd year in a row that G20 public financing has increased for coal power projects in foreign countries. G20 public financing here refers to financial backing from government export credit agencies, like Japan Bank for International Cooperation, development banks, like China Development Bank, and government insurance entities, like Korea Trade Insurance Corporation. Public financial support is given to benefit domestic companies who are involved in projects abroad — for example, in 2017, Japan Bank of International Cooperation provided a $730 million dollar loan to enable Marubeni, a Japanese company, to develop the 1000 MW Cirebon 2 Coal Power Station in Indonesia. Public financial support can take the form of loans, guarantees, export and import credits, grants, and equity financing.


Vietnam Pulls Request for U.S. Ex-Im Help to Build a Coal-Fired Power Plant

(New York Times, Hong Kong, 13 February 2018) A Vietnamese company is no longer seeking American financial support to build a coal-fired power plant in Vietnam, bringing to an abrupt end a closely watched test of whether Washington would back international projects that could potentially contribute to climate change. On Thursday, the Export-Import Bank of the United States, a lender run by the American government, said the Vietnamese state-controlled company, PetroVietnam, had withdrawn its application for financial support. In this case, a green light would have allowed PetroVietnam to purchase millions of dollars’ worth of turbines and other equipment from General Electric, the American manufacturer. The project, which is already under construction, faced intense criticism inside and outside the United States. Environmental and other groups said the project would have had a greater environmental impact than reports submitted by PetroVietnam had suggested. The World Bank and other major institutions have increasingly avoided backing projects supported by developing countries that burn coal and other fossil fuels, which emit greenhouse gases that contribute to climate change. The UK’s version of the Ex-Im Bank had declined to offer financial support for the Long Phu 1 project for similar reasons.


Standard Chartered & ECAs ‘breaching climate policy’ with Vietnam coal plant investment

(Climate Home News, London, 14 February 2018) The London-based bank plans to co-finance Nghi Son 2 power plant, which NGOs say uses dirty old technology, against company and OECD guidelines. The proposed financing arrangements also appear to breach the Organisation for Economic Cooperation and Development’s guidelines on coal, which restrict governments from using public export finance for new coal plants. Both Japan's and Korea’s export credit agencies, which help companies to export and win international business, are backing the project. Environmental NGOs Market Forces and Greenpeace analysed data from the project’s environmental impact assessment,  released last week by Japan Bank for International Cooperation (JBIC) — an export credit agency wholly owned by the Japanese government. Vietnam’s expansion of coal-fired power generation to meet booming energy demand has led to major concerns over public health. The number of coal plants in Vietnam is projected to rise from 38 to 133, including all plants currently planned or under construction. Citing a study published in the journal Environmental Science & Technology  last year, Myllyvirta said coal-fired power plants were responsible for an estimated 4,300 premature deaths in Vietnam in 2011 alone. The study forecasts that by 2030 there will be more than 19,220 deaths per year due to coal pollution.


Attorney calls for sanctions against Energy Transfer Partners in Dakota Access pipeline suit

(Associated Press, Bismark, 9 February 2018) Attorneys for a Florida-based environmental publication want a federal judge in North Dakota to sanction the Texas-based developer of the Dakota Access oil pipeline in a dispute over whether the publication can be sued. Earth First Journal maintains Energy Transfer Partners attorneys aren't acting in good faith by associating the publication with the Earth First social movement, which the company contends was part of an effort to undermine the pipeline project and the company. Energy Transfer in August sued Greenpeace, BankTrack and Earth First for up to $1 billion, alleging the environmental groups disseminated false and misleading information about the $3.8 billion pipeline moving oil from North Dakota through South Dakota and Iowa to Illinois, and instigated violent protests. Journal attorney Pamela Spees maintains the journal and movement aren't the same thing, and that the insistence of company attorneys to the contrary is "intentional and reckless disregard of their duties to the court." Spees asked Hovland to order the plaintiffs to pay the center's fees and to educate lawyers at the plaintiff firms about the Federal Rules of Civil Procedure, which she claims have been violated.


Airbus executives get swept away by a corruption investigation

(The Economist, Singapore, 8 February 2018) A management shake-out may reawaken national rivalries at the European aerospace giant. “The success of Airbus is intimately linked to the success of John [Leahy],” says Eric Schulz, successor to John Leahy, who has been chief salesman for the planemaker since 1994. Mr Leahy’s aggressive strategy to gain orders expanded Airbus’s market share for civil jets from 18% in 1994 to over 50%. But this year’s Singapore Airshow, which began on February 6th, will be Mr Leahy’s last before retirement. Staff turnover does not stop there. In December the firm said Tom Enders, its German-born chief executive, would step down in 2019; his French second-in-command, Fabrice Brégier, will leave this month. These changes follow the news that several countries, including Britain, France and America, are investigating allegations that in the past Airbus bribed officials to win contracts. That created divisions between French and German executives over how to respond.


BAE proposes UKEF financing to Malaysia for Typhoon jet deal

(Reuters, London, 12 February 2018) BAE Systems will provide Malaysia a UK government-backed financing deal if it decides to replace its fleet of combat jets with the Eurofighter Typhoon, senior company officials said. Malaysia has for several years been weighing France’s Rafale jet and the Eurofighter Typhoon, built by a European consortium including Britain’s BAE, as it looks to buy up to 18 jets to replace its Russian MiG-29s - most of which are grounded. The contest, potentially worth over $2 billion, is one of the biggest fighter deals under consideration in Asia. Financing would be provided via the UK Export Finance export credit agency.


No job estimates on arms export plan

(Associated Press Australia, Sydney, 28 February 2018) The Defence Department can't say exactly how many Australian jobs will be created out of the Turnbull government's plan to make the country a top 10 global arms exporters in the next decade. The issue was canvassed during a robust exchange between Greens senator Peter Whish-Wilson and Defence Minister Marise Payne at a Senate estimates hearing on Wednesday. The centrepiece of the government's ambitious plan is a $3.8 billion defence export facility within the export credit agency to help companies get finance to underpin sales of equipment overseas. "How is this good bang for our buck?" Senator Whish-Wilson asked, adding he wanted evidence it was the most cost-effective way for the government to create jobs. Department official Marc Ablong said no calculations had been carried out. "It's up to other agencies to determine whether there are more cost-effective ways for the government to spend the government's resources," Mr Ablong said.


Western banks rush to gain deals on China's Belt and Road Initiative

(Xinhua, Beijing, 28 February 2018) With China's Belt and Road Initiative gaining more recognition globally, Western banks are rushing in for a piece of the pie in this once in a generation opportunity. British and U.S. banks, including Citigroup, HSBC and Standard Chartered have been seizing opportunities brought about by the initiative proposed by Chinese President Xi Jinping in 2013. The initiative aims to create greater trade, infrastructure and people-to-people links between Asia, Europe, Africa and beyond by reviving and expanding the ancient Silk Road routes. The modern version comprises an overland Silk Road Economic Belt and a 21st Century Maritime Silk Road. As one example, Standard Chartered Bank has taken the initiative as a key part of its plan to generate the revenue growth necessary to achieve its target of making a return on equity above 10 percent. The bank has won 20 financing deals linked to the initiative over the past four years, such as a 515 million U.S. dollars project financing for a power plant in Zambia, a 200 million dollars loan for a Bangladesh electricity plant, and a 42 million dollars export credit facility for a gas terminal in Sri Lanka. [We will be following how ECAs swing in behind the banks on this initiative.]


U.S. Treasury official slams China's 'non-market behavior'

(Reuters, Washington, 21 February 2018) The U.S. Treasury’s top diplomat ramped up his criticisms of China’s economic policies on Wednesday, accusing Beijing of “patently non-market behavior” and saying that the United States needed stronger responses to counter it. He said market-oriented, democratic governments were awakening to the challenges posed by China’s economic system, including from its state-owned banks and export credit agencies. And he reiterated his view that China had stopped liberalizing its economy and was actually reversing these trends. China says that its state-owned enterprises operate on free-market principles and is battling within the World Trade Organization’s dispute settlement system to be recognized as a “market economy” -- a designation that would weaken U.S. and EU trade defenses. [and their own ECA trade subsidies?]


US leads the way on protectionism in 2017 with tarifs and export credit

(Global Trade Review, London, 22 February 2018) No less than 467 protectionist measures were implemented worldwide in 2017, with the US responsible for 90 of them. But while protectionism is still rising, the scale of the increase is slowing: in 2016 there were 827 new measures introduced. Research from Euler Hermes, a trade credit insurer, found that the US “decided to bolster measures to counteract perceived protectionism from key competitors” in 2017. The Trump administration implemented 30 new import tariff measures, 20 anti-dumping measures and 17 tariffs on China alone, with the headline tariff being the 30% import tariff on Chinese solar panels. Euler Hermes also found that many trading powerhouses use what it considers to be protectionism to boost their exports. Among these is export credit agency (ECA) support, with Japan being highlighted for adopting 137 protectionist measures pertaining to its ECAs over the past four years.


Bipartisan group of House lawmakers urge action on Export-Import Bank nominees

(The Hill, Washington, 20 Feb 2018) A bipartisan group of 68 House lawmakers are urging Senate leaders to get the Export-Import Bank running at full speed again. In December, the Senate Banking Committee approved four nominees to the Ex-Im board — Kimberly Reed, Spencer Bachus, Judith Pryor and Claudia Slacik. Since 2015, the Ex-Im Bank has been without a quorum on its board, which prohibits the agency from making deals of more than $10 million. Without a quorum in fiscal 2017, the bank only authorized $2.4 billion in loans, guarantees and insurance, supporting just 2,412 exporters, 40,000 jobs and $7.4 billion in U.S. export sales, the letter said. That is a sharp decline from 2014, when the bank approved $20.5 billion in business, which supported 3,563 exporters, 165,000 jobs, and $27.5 billion in exports.


U.S. urges help for Iraq, extends $3 billion Ex-Im credit line

(Reuters, Kuwait, 13 February 018) The United States has urged members of the coalition fighting Islamic State to help rebuild Iraq or risk a reversal of the gains made against the group. Secretary of State Tillerson said the official U.S. export credit agency, the Export-Import Bank of the United States (EXIM), would sign a $3 billion memorandum of understanding with Iraq’s finance ministry “that will set a stage for future cooperation”. Iraqi Prime Minister Haider al-Abadi, whose government puts the costs of reconstruction at more than $88 billion, said Iraq could not rebuild without outside help.  Iraq received pledges of $30 billion, mostly in credit facilities and investment, on Wednesday from allies but this fell short of the $88 billion Baghdad says it needs to recover from three years of war. Officials say almost $23 billion is needed for short-term reconstruction and over $65 billion in the medium term. UNDP Administrator Achim Steiner told Reuters Iraq might have been unable to attract more pledges due to its association with corruption. Investors see Iraq as the 10th most corrupt country, according to Transparency International.


South Africa joins Afreximbank as a shareholder

(Business Live, Johannesburg, 20 February 2018) Showing its commitment to promoting intra-African trade and economic integration, South Africa has taken up shareholding in the African Export-Import Bank (Afreximbank), the continental multilateral trade finance institution. The South African government is represented by the Export Credit Insurance Corporation of South Africa (ECIC) as its designated investor, in line with the terms of the provisions of the charter of the bank. The shareholding makes South Africa the 47th African country to join Afreximbank as a participating state and/or shareholder. “South Africa accounts for about 30%–35% of total intra-African trade,” he added, “making its membership critical for the attainment of the bank's strategic goal of moving intra-African trade share of Africa’s total trade from about 15% currently to 22% by 2021, and raising its annual value to more than $250bn by that year.


South Africa’s Guptas hid Bombardier jet, EDC says in court repossession efforts

(Globe and Mail, Toronto, 19 February 2018) Canada's export credit agency is worried that a Canadian EDC financed Bombardier luxury jet could become the escape vehicle for the controversial Gupta brothers as they flee a corruption prosecution in South Africa, according to court papers filed by the agency in Johannesburg.


Armenian NGO challenges controversial ECA supported gold mine

(Armenian Environmental Front, Yerevan, 11 February 2018) In February 2017, the Armenian Environmental Front (AEF) published information on supporters of a gold mine in Amulsar Mountain next to the resort of Jermuk. They now have presented the key entities responsible for funding and equipping the Amulsar gold mine project. The AEF is challenging plans to develop a gold mine in close proximity to the environmentally sensitive Jermuk resort in violation of Armenian legislation. Environmental and social impact assessments are said to be substantially incomplete and incorrect and international expert groups from Australia, USA and Canada, having studied dozens of documents available on the Lydian International corporate website, have presented their assessments and conclusions on the environmental risks of the gold project in Amulsar. They note: "Our overall conclusion remains that the high risk of acid drainage and contaminant leaching, the poor geochemical evaluation, the inadequate water quality predictions and mitigation measures and Lydian’s inexperience combine to make this an environmentally high-risk project during mining and for a lengthy period after operations cease." The AEF notes that a number of ECAs and international finance bodies have supported the project, among them: SEK - Sweden’s Export Credit Corporation (US$50 million via Dutch ING Bank); EKN - Swedish Export Credit Agency (Guarantees for the SEK credit); Sandvik SRP AB – a Swedish mining equipment company (recipient of the SEK & EKN support); the Swiss-Swedish ABB Group; the International Finance Corporation (IFC) of the World Bank Group (IFC's compliance branch concluded in 2017 that there were "shortcomings in IFC’s appraisal and supervision of the project as relate to a  number of the issues raised in the complaints and found that IFC’s pre-investment E&S review of the project was not commensurate to risk.";  and the European Bank for Reconstruction and Development (EBRD) (Which has apparetnly refused to respond to the arguments of Armenian ecological organizations concerning social and ecological risks of the project and continues to support it.)


Brazil grants US$2 billion ECA credit line to Angola

(Macahub, Luanda, 12 February 2018) Brazil has agreed to grant a credit insurance facility to Angola under the Export Guarantee Fund and support for the equalisation of interest rates through the Brazilian Export Financing Programme (Proex) for goods and services up to US$2 billion. Brazilian resources now made available through the state-owned National Bank for Economic and Social Development (BNDES) will be used to carry out some projects included in the Public Investment Programme of the State Budget. BNDES has financed several projects with social and economic impact in Angola, including the construction of the Laúca Hydroelectric Dam, the Cambambe Dam, the water supply system for the cities of Benguela, Lobito and Catumbela, the construction of the Luanda-Viana Expressway, the construction of Catumbela International Airport and the construction of the Capanda Industrial Hub, among others.


Anadarko agrees Mozambique LNG sale, banks/ECAs discuss finance terms

(Reuters, London, 20 February 2018) Anadarko Petroleum’s plan to export liquefied natural gas (LNG) from Mozambique moved a step closer to completion on Tuesday after it agreed a 15-year LNG sales and purchase agreement (SPA) with Electricite de France. France’s state-controlled utility will take 1.2 million tonnes of LNG annually from the Mozambique Area 1 marketing venture led by Anadarko and consisting of Japanese trader Mitsui, India’s ONGC Videsh and Thailand’s PTT, among others. LNG project developers across the board have struggled to find the long-term buyers needed before banks and export credit agencies could commit financing for new plants.


What's New December 2017

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.

  • Inside EDC one of Canada's most secretive agencies
  • Banks criticised for funding coal deals despite Paris agreement
  • Pipeline developer sues social movements
  • The UK arms trade with repressive regimes has no moral or economic sense
  • Turkey to Acquire Four Russian S-400 Missile Divisions with ECA support
  • Lenders jostle for mega PNG LNG financing deal
  • Africa – a new frontier for Floating LNG projects
  • Senate Panel Rejects Trump's Nominee to Lead Export-Import Bank
  • Former Ex-Im Bank Director under investigation for undisclosed foreign agent contract
  • Indonesia - Dirty man of Asia deepens addiction to coal
  • UKEF lines up new delegated supply chain finance (SCF) guarantees
  • An African corridor to prosperity [and coal fired global warming!]
  • Sinopec Signs $1b Iranian Abadan Refinery Expansion Deal
  • Kuwait Seals US$6.245bn ECA-Backed Corporate Transaction

Inside EDC one of Canada's most secretive agencies

(The Walrus, Toronto, 19 December 2017) Export Development Canada lends foreign buyers billions of taxpayer dollars. Critics say it's knowingly banking some of the world's worst regimes.  EDC has perfected the art of lending billions of taxpayer dollars to scandal-ridden foreign buyers. In May 2017, a trove of hundreds of thousands of emails was leaked to the press from an organization belonging to the Gupta family of South Africa. In a lengthy email thread strung out over the course of 2014, it was revealed that Bombardier had negotiated a C$52 million sale of a luxury jet to a Gupta subsidiary, with US$41 million of the jet’s financing provided directly to the Guptas by Export Development Canada, a Canadian Crown corporation. The Guptas are not EDC’s only controversial clients. The agency’s client list is studded with some of the most ­scandal-ridden multinationals on the planet including Kinross Gold whose West ­African mining operations were, as of 2016, under investigation by the United States Securities and Exchange Commission for bribery and corruption. [ECA-Watch member Above Ground has questioned EDC financing for controversial projects such as Omai Gold Mines in Guyana and Petrobas in Brazil, with EDC refusing to comment on the possible illegal or inappropriate use of Canadian tax dollars. Above Ground's 11 December 2017 report on Kinross Gold shows that, among other harms, Kinross’ dramatic expansion of the mine displaced the residents of traditional communities formed over a century ago by former African slaves who have land rights under Brazilian law. The legal process to formalize their collective title was well underway when Kinross announced its expansion plan and Export Development Canada provided financing, forcing them off their land. The report also raises concern about environmental oversight of the mine, which is located within 500 metres of neighbourhoods where hundreds of families live, as well as safety measures to keep people from entering the mine site.]  EDC activities are protected by disclosure protocols that are entirely opaque, with the result that few in ­Canada - including the Minister presiding over it - seem to know the full details about what the agency does, who it finances, and why. With EDC’s mandate up for review in 2018, it seems like a good time to examine the considerable reputational risks the agency often takes. [As well as its compliance with its own international, WTO and OECD agreed due diligence requirements on human rights, environmental standards and corruption.] On December 21, 2017, 2 days after this article was published online, EDC announced that it was suddenly terminating its $41 million loan to the Guptas for the purchase of a luxury Bombardier jet.


Banks criticised for funding coal deals despite Paris agreement

(ECA Watch, Ottawa, 31 December 2017) At the One Planet Summit in Paris in December 2017 a number of NGO, environmental and social movement organizations released briefings and research reports highlighting fossil fuel projects that are being funded by multilateral and national development banks and export credit agencies. The Big Shift global campaign released a briefing titled Dirty Dozen (pdf); complementary reports, ‘Banks vs. the Paris Agreement’ and ‘Investors vs. the Paris Agreement’ (pdf) were launched by Rainforest Action Network, BankTrack, Urgewald, Friends of the Earth France, and Re:Common at the Climate Finance Day in Paris; and the Natural Resource Defense Council released Power Shift: International Coal vs. Renewable Energy Finance.

Pipeline developer sues social movements

(Kallanish Energy News, Greensburg, 18 December 2017) Dakota Access Pipeline developer Energy Transfer Partners (ETP) and Florida-based environmental publication Earth First Journal are arguing in federal court whether something called a “social movement” can be sued. ETP in August filed a lawsuit against enviro-groups Earth First, Greenpeace and BankTrack, alleging they issued false and misleading information about the $3.8 billion pipeline, to move North Dakota crude to Patoka, Ill., interfered with construction, and damaged the company's reputation and finances through illegal acts. The company's lawsuit, filed in federal court in North Dakota, seeks damages that could approach $1 billion, The Associated Press reported.


The UK arms trade with repressive regimes has no moral or economic sense

(The Guardian, London, 20 December 2017) As the spectre of Brexit emerges, so do the first meaningful signs of the Tory vision of “building a global Britain”. The Department for International Trade, set up by Theresa May to put some flesh on the bones of her slogan, has prioritised arms sales for Britain’s post-Brexit industrial policy. The DIT, which licences Britain’s exports guns, planes and bombs, has overseen a sharp spike in sales to repressive regimes, many of which it has identified as “priority markets”. The biggest of these is Saudi Arabia, which is using our arms to bomb into famine its political enemies in Yemen. Our arms export control regime clearly states that it is illegal for the government to licence weapons to nations that oppress their own people or violate international humanitarian law. When buyers cannot afford our weapons, the government subsidises loans for them through export credit guarantees; UK Export Finance, which is supposed to support all British exports, says 50% of the support it provides (in the form of loans or guarantees) was given to defence exports.


Turkey to Acquire Four Russian S-400 Missile Divisions with ECA support

(Prensa Latina, Moscow, 28 December 2017) Turkey will acquire, for 2.5 billion dollars, four divisions of the modern Russian S-400 surface-to-air missile divisions, which will be delivered in 2020. The finance ministries of Turkey and Russia have concluded negotiations for the granting of an export credit to Ankara, Chemezov head of the Russian state conglomerate Rostec said. Turkey will pay an advance equivalent to 45% of the total and the Russian side will grant an export credit that will cover the other 55% of the contract. Ankara [a NATO member] received strong criticism and even threats from the United States for its decision to acquire the Russian arms. In other Russian ECA news, four Iranian banks have signed an "unlimited finance deal" with the Eximbank of Russia for public and private sector approved projects using Russian technical and engineering services.


Lenders jostle for mega PNG LNG financing deal

(Australian Financial Review, Sydney, 5 December 2017) Key project debt lenders have been giving their passports and travel insurers a workout as they troop up to Papua New Guinea to get to grips with what could be the region's biggest financing since the record US$20 billion deal for Ichthys LNG. While the final configuration of the next stage of LNG expansion in PNG is yet to be settled, those behind the circa US$17 billion project - primarily ExxonMobil, Total and Oil Search - are already well advanced. In considering funding export credit agencies are again expected to be well in evidence, while the backing of two oil majors and the sheer size of the project count in favour of commercial lender interest.


Africa – a new frontier for Floating LNG projects

(LNG Worldshipping News, London, 4 December 2017)) Floating LNG (FLNG) is opening new offshore gas basins for LNG development in Africa. The ownership structure of Africa’s new LNG production and the willingness of international oil companies to deploy new technologies will drive the commoditisation of LNG and cement its growing role as such in the global trading of energy. Uniquely, FLNG vessels will provide the first liquefaction plants in Mozambique and Cameroon and the technology is also expected to lead an expansion of capacity in Equatorial Guinea, Senegal and Mauritania. Italy’s Eni and its partners took a final investment decision on the 3.4M tonnes a year (mta) Coral FLNG scheme off Mozambique in June 2017. The project will be the first of this type to have as much as 60% of its cost funded on a project-finance basis, backed by 15 international banks and guaranteed by five export credit agencies. The financing was provided in the form of covered loans from five export credit agencies (Italy's Sace, China's Sinosure, Japan's Ksure, South Korea's Kexim, and Portugal's BPI) and two direct loans (one provided by Kexim, the other by an unnamed 'commercial bank').


Senate Panel Rejects Trump's Nominee to Lead Export-Import Bank

(New York Times, Washington, 19 December 2017) Two Republican senators broke with their party to block President Trump’s nominee to lead the Export-Import Bank, a setback for the White House that reflects deep divisions in the Republican Party over the role that the government should play in steering the United States economy toward prosperity. The nominee, Scott Garrett, a former representative and a Republican from New Jersey who had wanted to see the government’s export credit agency shuttered, was rejected by the Senate Banking Committee in a 13-to-10 vote. Since 2015, the agency has been hobbled by a lack of personnel necessary to approve projects over $10 million, formerly the bulk of the agency’s work. An estimated $42.2 billion worth of deals are stuck in the pipeline waiting for approval, which could support an estimated 250,000 American jobs, a spokeswoman for the Export-Import Bank said. Some of the biggest Ex-Im customers are General Electric, Boeing and Caterpillar, Some senators and the Trump administration have threatened to pull the other board nominees, leaving the bank without a quorum and barred from financing deals over $10 million and Boeing to fend for itself. However, in 2017 the Aircraft Finance Insurance Consortium has supported more than $1 billion of new airplane deliveries and Boeing has 661 firm orders for 2018, in addition to 6,600 backorders. Meanwhile it has been said that Boeing is upset that Garrett was getting help throughout the nomination process from Dan Murphy, a lobbyist for a high-powered Washington firm that counts Airbus among its clients.


Former Ex-Im Bank Director under investigation for undisclosed foreign agent contract

(Newsweek, Washington, 20 June 2017) Federal investigators probing the lobbying work of ousted national security adviser Michael Flynn are focused in part on the role of Bijan Kian, Flynn’s former business partner, according to a person interviewed by the FBI. In private conversations with potential clients, Kian portrayed himself as a rainmaker for Flynn, tapping into connections cultivated during a five-year tenure as a director at the U.S. Export-Import Bank, according to one person who worked with the firm. Inovo, a Netherlands-based company controlled by Turkish businessman Ekim Alptekin, hired Flynn Intel Group to research Fethullah Gulen’s activities in the United States, which he suspected were “poisoning” relations between the United States and Turkey. Like Turkey's President Tayyip Erdogan, Alptekin blamed the coup on followers of Gulen. Kian played a central role in securing and overseeing the Inovo contract, two people with knowledge of that project said. The FBI has been investigating whether Flynn’s consulting firm lobbied on behalf of Turkey - after being paid $530,000 by Inovo - without making the proper disclosure under the Foreign Agents Registration Act.


Indonesia - Dirty man of Asia deepens addiction to coal

(The Nation, Bangkok, 30 December 2017) Already the world’s fifth-biggest greenhouse gas emitter,  Indonesia is leading Southeast Asia’s boom in coal-fired power. Already one of the world’s biggest carbon polluters because of deforestation, Indonesia has back-pedalled on a pledge to cap coal production. The government initially planned to reduce its coal production to 413 million tonnes this year, from 419 million tonnes in 2016. The figure was expected to fall to 406 million tonnes next year, before hovering at only 400 million from 2019. However, this year’s coal production has already reached 477 million tonnes, far outstripping last year’s 434 million tonnes. The boom is being bankrolled by foreign governments and banks, the Guardian reports. Activist group Market Forces examined 22 deals involving 13.1 gigawatts of coal-fired power in Indonesia and found that 91 per cent of the projects had the backing of foreign governments through export credit agencies or development banks. The majority of the money was coming from Japan and China, with the Japan Bank for International Cooperation involved in five deals and the Export-Import Bank of China involved in seven deals.


UKEF lines up new delegated supply chain finance (SCF) guarantees

(Global Trade Review, London, 7 December 2017) UK Export Finance (UKEF) has announced plans for a new invoice financing scheme for exporters in a bid to boost exports through supply chain efficiency. GTR has learned that the new scheme will allow an exporter to set up a supply chain discounting facility with its bank, through which suppliers can receive up to 95% of their payment on invoice submission. The facility will be based on an export contract and support will be based on the buyer’s creditworthiness. UKEF will provide the bank with a guarantee for up to 80% of the amount of credit provided through the facility. The finer details of the scheme, which is due to be launched next year, are still being ironed out. Earlier in the year, the export credit agency (ECA) launched the Bank Delegation scheme, which gives banks authority to issue UKEF guarantees for their customers simply by telling UKEF they are issuing the guarantee based on the banks' own due diligence. [How UKEF will ensure compliance with its own international, WTO and OECD agreed due diligence requirements on human rights, environmental standards and corruption is not clear under this delegation of responsibility to private sector banks.]


An African corridor to prosperity [and coal fired global warming!]

(African Law & Business, London, 7 December 2017) London's Linklaters & US firm White & Case, together with local law firms, have shared the plaudits in agreeing financing of the US$4 billion Nacala Corridor rail and port project, which spans Mozambique & Malawi. It involves Brazil's Vale & Japan's Mitsui and will enable the construction, refurbishment and operation of nearly 1000 kilometres of railway line, as well as the construction and operation of a coal terminal in the port of Nacala, linking Vale’s coal project in Tete Province, in western Mozambique home to some of the world’s richest remaining coal deposits, with a deep sea port to be constructed in Nacala – the so-called Nacala Corridor, in eastern Mozambique. Banks involved in the deal, who were advised by Linklaters, included the African Development Bank (AfDB), Export Credit Insurance Corporation of South Africa (ECIC), Japan Bank for International Cooperation (JBIC) and Nippon Export and Investment Insurance (NEXI) together with ECIC and NEXI covered commercial banks.


Sinopec Signs $1b Iranian Abadan Refinery Expansion Deal

(Financial Tribune, Tehran, 30 December 2017) China's Sinopec Engineering Company has signed a deal worth $1 billion to develop Abadan Oil Refinery, Iran's oldest crude processing facility in the southern oil-rich Khuzestan Province, the Chinese oil and gas group announced. According to Iranian officials, the venture will be financed by China Export and Credit Insurance Corporation, or Sinosure. The funding is reportedly part of a deal worth $3 billion to overhaul and expand the facility. Sinosure is China's major state-owned export credit insurance company. Its financing since its establishment in 2001 has totaled $290 billion for exports and investments. Commissioned in 1912, Abadan refinery is the longest-running Iranian crude refinery and once the largest oil refinery in the world.


Kuwait Seals US$6.245bn ECA-Backed Corporate Transaction

(Bonds & Loans, London, 5 December 2017) Kuwait National Petroleum Company’s (KNPC) US$6.245bn ECA-backed loan was a triumph for the company’s Clean Fuel Project and the region’s credit markets, setting a new record for the largest ECA-backed corporate loan to date. The Project involves modernisation of the Mina Al Ahmadi and Mina Abdullah oil refineries of KNPC located in Al Ahmadi Governorate, south of the country, to make their products meet stringent environmental requirements. Total debt financing for the Project is estimated to be around US$10bn. The financing package is supported by 7 ECAs: Atradius Dutch State Business N.V., Export-Import Bank of Korea (KEXIM), the Japan Bank for International Cooperation (JBIC), Korea Trade Insurance Corporation (K-Sure), Nippon Export and Investment Insurance, SACE, and UK Export Finance. JBIC and KEXIM extended direct financing to KNPC while the other agencies provided cover to commercial bank lenders involved in the transaction.


What's New November 2017

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.

  • Brussels Seminar December 4: Transparency and due diligence at Europe’s ECAs
  • OECD, It’s Time for Export Credit Agencies to Stop Funding Fossil Fuels
  • Too Coal-Hearted: Japan and Korea’s Support for Dirty Energy
  • Japanese Groups Strongly Object to JBIC Premature Loan Disbursement, Ingoring Upcoming Community Lawsuit
  • Japanese banks & JIBC back coal links between Japan & Africa
  • May Vies With Trump for Aramco Listing with ECA support
  • Airbus braces for a difficult landing after corruption allegations
  • Great Barrier Reef Pitted Against Coal Jobs in Australia Vote
  • ECAs are stepping up their SME support initiatives.

Brussels Seminar December 4: Transparency and due diligence at Europe’s ECAs

(CEE Bankwatch Network, Prague, 22 November 2017) In 2015-2017 Finance & Trade Watch and CEE Bankwatch Network together with its national partners researched export credit agencies (ECAs) in seven countries of the European Union (Austria, Czech Republic, Croatia, Hungary, Poland, Romania and Slovakia). The results of this research will be presented at a seminar in Brussels on December 4, 2017 at the Leopold Hotel  19:00 - 20:30 followed by a reception.

  • Opening remarks by Heidi Hautala, vice President of the European Parliament
  • Remarks on the position of European Parliament by Anna Záborská, Member of the EP Development Committee
  • Reflections on the issues of EU Member states ECAs by Silvia Gavorníková, EXIMBANKA Slovakia
  • Introduction of the research project by Thomas Wenidoppler, Finance and Trade Watch
  • Issues and Recommendations related to Transparency and Due Diligence of ECAs by Dana Mareková, CEE Bankwatch Network

To participate, register here

OECD, It’s Time for Export Credit Agencies to Stop Funding Fossil Fuels

(Friends of the Earth US, Washington, 14 November 2017) Precisely as the world’s attention is focused on addressing climate devastation at the 23rd United Nations Climate Conference (COP23) in Bonn, Germany, the largest public drivers of fossil fuel financing are meeting a mere 320 miles away in Paris. The irony couldn’t be starker. Representatives of the very same countries singing their own praises in Bonn are fomenting climate disaster from Paris, at a meeting of export credit agencies (ECAs) at the Organization of Cooperation and Development (OECD) Export Credit Group. Export credit agencies (ECAs) — which are bodies funded by taxpayers to support business overseas — are world leaders in public support for climate destruction. While relatively obscure but powerful institutions, ECAs provide government-backed loans, guarantees, insurance, and credits to projects overseas — including many energy projects — in the hopes of boosting their home countries’ exports and creating and maintaining jobs. According to a recent report by Friends of the Earth U.S. and Oil Change International, ECAs fund almost $40 billion worth of fossil fuel projects each year. That is a whopping 12 times more than what they spend on clean energy projects.


Too Coal-Hearted: Japan and Korea’s Support for Dirty Energy

(Natural Resources Defense Council, New York, 13 November 2017) Two years ago, OECD countries agreed to place limits on coal finance. Are countries following through on their commitments? The results are mixed. Most governments have stopped financing coal and shifted finance to clean energy projects. The worst actors, Japan and Korea, are continuing to provide billions for coal projects. Continued government financing for international coal projects undermines the Paris Agreement and the prospects of a low-carbon future. To address climate change, governments must shift international public finance toward smarter, sustainable options such as solar and wind power.


Japanese Groups Strongly Object to JBIC Premature Loan Disbursement, Ingoring Upcoming Community Lawsuit

(FOE Japan, Tokyo, 14 November 2017) On November 14, The Japan Bank for International Cooperation (JBIC) disbursed the first installment of a loan for the 1000 MW Cirebon coal-fired power plant expansion plan which Marubeni and JERA invested in, known as Cirebon 2. The total loan amount JBIC has signed in the loan agreement is around USD 731 million. However, the validity of the new environment permit, which has only recently been issued, is still in question. The local community and NGO groups, which are opposing the project, are preparing to file an administrative lawsuit next week, demanding the revocation of the new environment permit. This would make it impossible for the Cirebon 2 project to violate the laws of the host country (Indonesia) and the “JBIC Guidelines for Confirmation of Environmental and Social Considerations”. This disrepectful JBIC neglect of the lawsuit by local residents is a repeat of its conclusion of the loan agreement without an adequate EIA. JBIC had a meeting with the local community and NGO groups in Indonesia last October and directly heard their concerns and the judicial risks. Nevertheless, JBIC decided to disburse the loan and just push through with the project ignoring their concerns.


Japanese banks & JIBC back coal links between Japan & Africa

(Global Capital, London, 1 November 2017) Japan Bank for International Cooperation (JBIC) and a syndicate of lenders have provided a $2.73bn loan to finance the construction of a railway and upgrade a port in Mozambique, which will ensure the long term supply of coal to Japan from the African country. JBIC provided $1.03bn of the deal with the rest provided by African Development Bank, Sumitomo Mitsui Banking Corporation (SMBC), Mizuho, Standard Chartered, Nippon Life Insurance Co, MUFG and Sumitomo Mitsui Trust Bank.


May Vies With Trump for Aramco Listing with ECA support

(Bloomberg, London, 29 November 2017) U.K. Prime Minister Theresa May said London is “extremely well-placed’’ to win a planned stock exchange listing by Saudi Arabia Oil Co., as she competes against U.S. President Donald Trump for the coveted initial share sale by the world’s largest crude producer. Aramco, worth trillions, is mulling an international sale in addition to a listing on the Saudi exchange. Trump earlier this month tweeted his hope that the Saudis would use a U.S. exchange, before lobbying Saudi King Salman personally on a phone call. The UK government earlier this month agreed to a $2 billion loan guarantee, an unusually large export credit guarantee that’s designed to finance the purchase of British goods, but that also opened May up to the suggestion she was trying to influence the listing decision.


Airbus braces for a difficult landing after corruption allegations

(Guardian, London, 5 November 2017) A UK Serious Fraud Office probe into allegedly misleading statements made by Airbus to UK Export Finance, the government department that provides commercial support for major deals has ballooned with further allegations of corruption. The investigation concerns whether Airbus lied to the government about its use of intermediaries. It is understood that Airbus has not received any further support from UKEF since it was informed of the allegations in April last year. Der Spiegel has published a lengthy investigative piece alleging that Europe’s largest aerospace multinational had operated a London slush fund, distributing millions of dollars to accounts held by companies in tax havens. Before the month was out, the firm would reveal to investors that it had reported itself to authorities in the US, this time over potentially breaching regulations on the use of agents to sell sensitive weapons technology.


Great Barrier Reef Pitted Against Coal Jobs in Australia Vote

(ABC, Sydney, 22 November 2017) As the world grapples with the fossil fuel’s role in the future energy mix, Indian bilionaire Guatam Adani's proposed Carmichael coal mine became a defining issue in Australia's Queensland election. An unnamed Adani Mining director was quoted as saying the company is close to securing a deal with Chinese enterprises and export credit agencies to fund both the mine and the rail link, and that Adani wouldn’t need a loan of up to $1 billion from the federal Northern Australian Infrastructure Facility (NAIF) for the rail line. A formal announcement about the financing deal is said to be imminent, but the ABC reports that reliance on funds from Chinese enterprises and export credit agencies could cost Australia jobs associated with the project. Such Chinese interests invariably require that materials for key infrastructure are sourced from China and that effective shifts work out of Australia. Coal and the impact of climate change on Australia's Great Barrier Reef were an issue in the election.


ECAs are stepping up their SME support initiatives.

(TXF News, London 23 November 2017) Application processes and ease of access to export cover is improving. But as commercial banks retreat from the SME loans market, more ECA direct lending to SME exporters is a must. Many export credit agencies (ECAs) have been, or are in the process of, stepping up their support for small and medium sized enterprises (SMEs). Finnvera, Credendo, Atradius, Sace, EFIC and Euler Hermes already have streamlined services specifically targeted at SME customers. UKEF has entered into partnerships with five commercial banks – Santander, Barclays, Lloyds, Natwest/RBS, and HSBC – to allow customers to access export finance from commercial bank branches. And Bpifrance hopes to create a one-stop-shop for exporters to increase accessibility. But for all the initiatives, meeting the very different needs of the majority of SMEs remains elusive. For example, UKEF has introduced capacity to provide funding in 40 local currencies. In short – the needs spectrum of SMEs is so broad that ECAs are in the difficult position of trying to 'please all of the people all of the time'.