Export credit financing for coal-fired power projects - A thing of the past?

(Lexology Newsfeed, 5 October 2016) On 17 November 2015, members of the OECD which are party to the OECD Arrangement on Officially Supported Export Credits (the Arrangement), agreed to a new sector understanding that limits the availability of export credit finance for less environmentally friendly coal-fired power projects (the New Sector Understanding). The New Sector Understanding is due to come into force in January 2017. The members of the OECD that have signed up to the New Sector Understanding are Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland and the United States. The New Sector Understanding is likely to have a notable effect on the availability and terms of OECD export credit financings. However, it remains to be seen whether local commercial banks and development finance institutions in countries that are party to the Arrangement will align their approach to financing coal-fired power projects with that of the participating OECD export credit agencies.