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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 July 2021

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

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

Questions? Email info-at-eca-watch.org

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

  • Germany accused of hypocrisy over Arctic gas project
  • Australian ECA gives 80X more to fossil fuel projects than renewables
  • EXIM support and the Pemex Ocean fire
  • Export Development Canada Promises Net Zero by 2050
  • UKEF reports export credit arrangements for 2020
  • Australian ECA eyes bid for Pacific telecoms to block China
  • Ghanaian rail project takes off with Swedish & South African ECA backing
  • U.S. Chamber of Commerce supports EXIM
  • U.S. EXIM Bank says 2020 financing volume still far below global rivals
  • SACE helps revive Italian steelmaker Acciaierie d'Italia
  • Insurers mourn missed chance to form EU ECA
  • Afreximbank plans $8 billion fund to offset trade-pact losses
  • New Norwegian ECA, Eksfin, begins operations

Germany accused of hypocrisy over Arctic gas project

(Sky News, London, 16 July 2021) As deadly flooding ravages parts of Germany, the country's government is still considering massive investment in a Russian-led gas project known as Arctic LNG II. Germany has been accused of "pure play hypocrisy" for complaining of the impacts of climate change brought by this week's catastrophic flooding while signalling support for a new gas project in the Arctic. Reuters has reported that France's Bpifrance, Germany’s Euler Hermes and Italy's SACE were among the state-backed international lenders considering providing about $9.5 billion in financial support for the project.


Australian ECA gives 80X more to fossil fuel projects than renewables

(Guardian, Sydney, 6 July 2021) Australia’s export credit agency provided more than $1.5bn in finance to fossil fuel projects between 2009 and 2020, about 80X what it spent on renewables, according to a new report from Jubilee Australia. Over the same 11-year period, covering the hottest years on record globally, it provided $20m in support to renewables projects. Luke Fletcher, executive director of Jubilee Australia, argues that EFA’s support for fossil fuel projects “bucks the international trend”, risks investing in doomed projects and curtails opportunities for the country’s energy sector to modernise. Export Finance Australia has also been criticized for taking on a role as a Development Finance Institution (DFI), adding equity stakes in risky overseas infrastructure to its export insurance and lending powers in order to to compete with Chinese, Japanese and Korean ECAs. For some, this sort of reform blurs the distinction between the government and the private sector, and at worst is a form of corporate welfare, blurring the line between helping developing countries vs Australian business. Australia is the world’s largest exporter of coal and gas, yet producers in those sectors are finding it increasingly difficult to source financing from commercial lenders.


EXIM support and the Pemex Ocean fire

(Climate Change News, Broadstairs, 14 July 2021) Campaigners have called on the US to review its longstanding support for Mexico’s state-owned oil and gas company after a gas leak from one of its pipelines set the ocean on fire in the Gulf of Mexico.  The US export credit agency Exim bank has provided $16.14 billion in loans and guarantees to Pemex since 1998, with recent funds going to the site of the fire. For 76 years, the company has received billions of dollars in support from the US export credit agency, the Export–Import Bank (Exim), despite warnings of safety and environmental concerns.


Export Development Canada Promises Net Zero by 2050

(Globe Newswire, Ottawa, 22 July 2021) Export Development Canada (EDC) is committing to net zero emissions by 2050 across its business lines and in its own global operations. The Crown corporation’s plan will include interim reduction targets for the most carbon intensive sectors for 2023 and 2030, supported by sustainable finance objectives. Meanwhile, EDC may face court action in the not-too-distant future, after a legal opinion commissioned by Oil Change International and several other organizations concluded that national export credit agencies have an international legal obligation to scale back their financing for fossil fuel-related activities. Canadian mining and gas company ReconAfrica is currently exploring for oil and gas in Namibia and Botswana which could become one of the biggest oil finds of the last few decades.


UKEF reports export credit arrangements for 2020

(Janes Defense, London, 23 June 2021) The UK's export credit agency, UK Export Financing (UKEF), revealed in its annual report on 22 June that it had underwritten a record GBP12.3 billion (USD17.1 billion) for UK industry during the 2020/21 financial year. Key transactions in the annual report included the beginning of the drawing of GBP1.13 billion to BAE Systems in support of the manufacture of Eurofighter Typhoon and BAE Systems Hawk trainer aircraft to Qatar. In addition, buyer credit guarantees for Indonesia were supplied for the acquisition of Lockheed Martin C-130J Hercules medium transport aircraft (maximum liability of GBP74.6 million) and air-defence systems from Thales UK (maximum liability of GBP29.8 million).


Australian ECA eyes bid for Pacific telecoms to block China

(Nikkei, Sydney, 20 July 2021) The government of Australia looks to support a bid by domestic telecom Telstra to buy a leading South Pacific mobile phone business reportedly eyed by a Chinese suitor, as Canberra works to limit Beijing's influence in the region. Telstra said Monday it is discussing a purchase of the Pacific operations of Jamaica-based Digicel "in partnership with the Australian government." The Australian company said any such deal for Digicel Pacific "would be with financial and strategic risk management support from the government." The government [through Export Finance Australia] would pay for half of the purchase -- estimated by local media at 2 billion Australian dollars ($1.47 billion) -- with Telstra taking a minority stake if the transaction is completed, Reuters reports. If China acquires the Pacific mobile network, it could monitor Australia’s communications to and from the region and use asset management as leverage noted John Lee, a senior researcher at the University of Sydney.


Ghanaian rail project takes off with Swedish & South African ECA backing

(TFX News, London, 7 JUly 2021) Most recently Ghana's Ministry of Finance (MoF) signed a landmark €600 million ($712 million) ECA-covered financing deal for the construction of a 100 km section of the country’s Western Railway Line running from Takoradi Port to Huni Valley. Deutsche Bank acted as mandated lead arranger for both loans. The first, backed by EKN and fully arranged by Deutsche Bank, is a €523 million loan covering the bulk of the cost. The second is a €75 million commercial loan arranged and structured by Investec to cover the downpayment on the EKN-backed financing. It is backed by South Africa’s ECIC and funded by a syndicate of Investec Bank, Rand Merchant Bank, Nedbank (London branch) and Sanlam life Insurance. The Western Railway line is key to the haulage of agricultural produce and minerals from the middle belt to Takoradi Port in the south of Ghana. [The corridor is home to key bauxite mines, which are the bedrock of the country’s integrated bauxite aluminium masterplan.] The involvement of EKN and SEK reflects the significant number of Swedish sub-suppliers participating in the project. The engineering, procurement, and construction (EPC) contractor for the project is Amandi Investment with Bluebird Finance & Projects acting as lead financial advisor for the EPC. Given South Africa’s expertise and established trade flows in rail projects, Investec and Bluebird Finance & Projects - alongside Amandi, discovered that a multitude of South African rail suppliers could be sourced for this project and in turn reached out to ECIC to support the commercial facility, a first for the South African ECA.


U.S. Chamber of Commerce supports EXIM

(US Chamber of Commerce, Washington, 1 July 2021) In a letter to the Committee on Appropriations of the U.S. House of Representatives, the Chamber noted that overseas markets represent 95% of the world’s consumers and 80% of its purchasing power. Exports already support half of all manufacturing jobs, and one in three acres of American farms is planted for hungry consumers overseas. Approximately 300,000 small- and medium-sized businesses export, accounting for one-third of all merchandise exports. The International Affairs budget and the agencies it supports play a vital enabling role for U.S. companies to tap foreign markets and create jobs and prosperity at home. The Ex-Im bank provides vital financing and guarantees to help American businesses export. In the last pre-pandemic fiscal year when the Bank was fully functional (FY 2014), Ex-Im backed export sales that supported more than 164,000 American jobs. That same year, 90% of Ex-Im’s transactions — more than 3,340 — directly supported American small businesses. Far from being a burden on the taxpayer or a subsidy for corporations, Ex-Im charges fees for its services that has generated $7 billion in revenue for the U.S. Treasury over the past two decades beyond funds it received in appropriations. Failure to support Ex-Im would amount to unilateral disarmament in the face of other nations’ aggressive trade finance programs.


U.S. EXIM Bank says 2020 financing volume still far below global rivals

(Reuters, Washington, 30 June 2021) The Export-Import Bank of the United States said on Wednesday it remained far behind its global competitors in financing volume in 2020 even as overall financing activity fell due to the COVID-19 pandemic. In its annual competition report here to Congress, EXIM said it authorized $1.8 billion in official medium- and long-term export credit support during calendar 2020, compared with global leader China at $18 billion, France at $12.1 billion, Germany at $8.6 billion and South Korea at $5 billion. China, traditionally the largest provider of export credit, saw its financing volume decrease last year from over $33 billion in 2019.


SACE helps revive Italian steelmaker Acciaierie d'Italia

(SteelOrbis, Brescia, 1 July 2021) Invitalia, the public shareholder, by entering the board, is expected to implement contractual commitments, in all a little over €2 billion - €400 million of capital increase - have already been paid, while about €700 million are missing in guarantees for a SACE [Italian export credit agency] loan, plus €900 million in reimbursements and support for variously assorted investments,  Steel magnate ArcelorMittal has so far supported the company with a capital payment of €1.8 billion. Now it is up to the Italian State through Invitalia to do what was agreed, based on the contract that was signed in December 2020, stated Acceaierie CEO Lucia Morselli. She added "The market is favorable and the company is working hard. However, until August 2023 we must comply with environmental constraints that prevent us from accelerating production even more." 


Insurers mourn missed chance to form EU ECA

(Global Capital, London, 30 June 2021) Europe missed an opportunity to use the debate over the future of development finance to establish an insurance guarantee agency to attract private capital needed to help them hit targets for investment into emerging markets, according to experts in trade finance and insurance. Policymakers spent two years debating whether to use the EBRD or the European Investment Bank as a platform for a new single development bank before deciding to stick with the current set-up augmented by a more collaborative approach dubbed “Team Europe”. An EU development insurer could also use reinsurance to mobilise substantial amounts of non-development finance institutional capital from the private insurance market and from EU export credit agencies, Paul Mudde, former trade finance professional at ABN Amro and trade credit insurer Atradius, said. The problem, in his view, was that in the EU discussions about the European Financial Architecture for Development (EFAD) an insurance approach, like the World bank’s MIGA, had never been considered.


Afreximbank plans $8 billion fund to offset trade-pact losses

(Bloomberg, London, 15 July 2021) African nations plan to raise about $8 billion for a fund to help offset revenue losses for countries that lower cross-border tariffs, as part of a continent-wide free-trade agreement. The African Export-Import Bank, or Afreximbank, has already provided $1 billion for the fund after the African Union set it up to help cushion sudden revenue losses and encourage participation. The free-trade area went into effect on Jan. 1. The $1 billion made available by Afreximbank will be used to leverage funding from other multilateral development-finance institutions, export credit agencies, commercial banks and donors. Afreximbank, in collaboration with the African Union, will hold intra-Africa trade fair in South Africa in November to provide access to trade and market information to companies and countries. In addition, it’s planning “face-to-face training workshops’’ in 13 countries from October to build the capacity required to meet trade targets, the lender said.


New Norwegian ECA, Eksfin, begins operations

(ShipInsight, Oslo, 2 July 2021) Oslo-headquartered Export Finance Norway (Eksfin.no), the result of a merger between former government agencies GIEK and Export Credit Norway, has opened its doors and is fully operational from 1 July 2021. The merger of the two predecessor agencies forms part of a larger redesign by the Ministry of Trade, Industry and Fisheries of the government apparatus around export promotion and export credit financing to make the system easier to navigate for end users.


What's New June 2021

I apologize for the delay in publishing this month. This issue is being sent from the beach at Sandbank Park. What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Questions? Email info-at-eca-watch.org

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

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

Global capital racing towards clean energy

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


Rich Countries Subsidizing “Dash for Gas” in Developing World

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


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

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


Human Rights Watch Q&A on ECA Fossil Fuel Subsidies

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


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

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


Chinese export insurance company reports steady business growth

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


ECA supported Ethiopian projects show ‘railpolitik’ in action

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


EXIM Environmental and Social Projects Information and Concerns Grievance Hotline

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


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

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


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

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


UK business given £12.3bn export support from government

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


Rosatom Preparing Support With French ECA For Foreign Nuclear Power Plants

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


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

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


ECA Climate change goals lacking on maritime shipping decarbonization

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


What's New May 2021

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

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

Questions? Email info-at-eca-watch.org

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

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

ECAs and Fossil Fuels

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

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

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


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

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


EDC singled out on fossil fuel finance by international legal opinion

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


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

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


Decarbonising Danish Export Credits

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


Egypt to buy Rafale fighter jets with French ECA support

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


Russian Export Credit Line for Sri Lankan Arms

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


Japan looks to introduce finance system for defence exports

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


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

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


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

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


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

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