What's New for December 2023

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

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  • ECAs supporting billions in global trade form net-zero alliance facing civil society scepticism
  • At COP28, Export Development Canada joined Net Zero Alliance Despite Fossil Financing
  • Norway joins 40-signatory partnership to end international public finance for fossil fuels
  • Texas Gulf Coast communities speak out against Japanese ECA backed LNG development
  • EXIM Lent Nearly $1 Billion to Fossil Fuel Projects in 2023
  • PPIB Announces $2 Billion Financial Close of Thar Coal-Fired Plant
  • Saudi Arabia concludes €1 billion financing deal with Italy’s SACE
  • North Field expansion project - a quantum leap in leadership of Qatar's global energy landscape
  • TFX: Export finance trends of 2023: ECAs spearhead success amidst global challenges and geopolitical shifts
  • Gunvor gets gas loan backed by SACE
  • Ukraine strikes deal to get 2 Royal Navy minehunters from UK with UKEF support
  • Italy’s export credit agency SACE unveils its ambitious ESG strategy at COP28
  • Pakistan’s Export-Import Bank formally launched
  • Türk Eximbank expected to provide exporters $41 billion in 2023

ECAs supporting billions in global trade form net-zero alliance facing civil society scepticism

(UNEP, Dubai, 4 December 2023) At COP28 today, 8 leading export credit agencies, in partnership with the University of Oxford, Future of Climate Cooperation, and the UN Environment Programme Finance Initiative (UNEP FI) launched the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA), the first net-zero alliance comprising public finance institutions globally. In working to deliver net-zero economies by 2050, the NZECA will help decarbonise global trade and facilitate joint action from public and private finance. Combined, these ECAs supported an estimated US$120 billion in global trade in 2022 alone, providing finance and other services such as insurance and guarantees to facilitate local companies’ international exports. The export credit industry is hugely influential globally, with up to $28 trillion – comprising 80 to 90 per cent - of international trade relying on export financing, much of it provided by governments via export credit agencies and export-import banks. But NGOs note that a study by Net Zero Tracker found the bulk of “net zero” commitments from fossil fuel companies were meaningless as they either included no short-term emissions reduction plans, or did not fully cover scope 3 emissions (that is, the pollution released when a company’s products are used). Net Zero hopes/assumes that in the future technology will come along that can suck the carbon out of the atmosphere so that they can just keep going as it is until then.


At COP28, Export Development Canada joined Net Zero Alliance Despite Fossil Financing

(Environmental Defense, Toronto, 4 December 2023) At COP28, Export Development Canada (EDC) joined other export credit agencies to launch the Net-Zero Export Credit Agencies Alliances (NZECA), an alliance of international public finance institutions committed to reaching net-zero greenhouse gas emissions by 2050. However, EDC continues to provide public financing to oil and gas companies. In 2022, EDC provided around CAD $20 billion in public financing to oil and gas companies (which includes $12  billion for the Trans Mountain Expansion, or TMX, pipeline). So far this year, they have provided around CAD $12 billion (which includes $6  billion in loans for the TMX pipeline). “Crown corporation Export Development Canada has no place in a net zero alliance. Canada’s export credit agency continues to provide tens of billions each year to oil and gas companies, using publicly-back money to finance the companies and the activities that are fueling the climate crisis. Years of climate promises, including their own net zero commitment, have not made a difference." said Julia Levin, Associate Directorof Environmental Defense in Dubai.


Norway joins 40-signatory partnership to end international public finance for fossil fuels

(Oil Change International, Washington, 2 December 2023) Norwegian Prime Minister Jonas Gahr Støre  announced today that Norway has joined the Clean Energy Transition Partnership (CETP, sometimes called the Glasgow Statement) at the UN COP28 climate summit in Dubai. Boost for CETP which now boasts 40 signatories (including US, Canada, and many EU countries), shifting billions per year out of fossil fuels to clean energy. Norway – as a major oil & gas producing nation – boosts the initiative by joining, building momentum at the OECD level to create new rules to end international fossil finance across the OECD. This move from Norway bolsters an international campaign to adopt new rules at the OECD (the group of the world’s wealthiest countries) to end export finance support for fossil fuels. OECD countries supported fossil fuel exports by an average of USD 41 billion from 2018 to 2020, almost five times more than clean energy exports. The EU, Canada, and UK have tabled a proposal to end this finance. Having signed onto the CETP, Norway is now expected to deliver on the CETP’s commitment to “driving multilateral commitments in international bodiesby aligning with the UK, EU, and Canada in the push for oil and gas restrictions at the OECD.


Texas Gulf Coast communities speak out against Japanese ECA backed LNG development

(Oil Change International, Washington, 28 November 2023) Representatives of Friends of the Earth Japan & Oil Change International traveled to Texas & Louisiana in early November for a week-long tour, organized by Texas Campaign for the Environment, to witness & learn about the impacts of LNG development on local communities. The Japanese government is the largest global financier of LNG export terminals, providing 50% of international public finance, or $39.7 billion, for LNG export capacity built from 2012-2022, as well as projects under construction or expected to be built by 2026. In the Gulf South, Japan’s export credit agencies, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance, provided $3.7 billion in financing for the Freeport LNG terminal & $4.5 billion for Cameron LNG in 2014.  The Japanese & Korean governments are also rolling out plans to develop new ammonia & hydrogen production & export facilities globally including in Lake Charles & Corpus Christi. These projects would worsen the climate crisis & subject communities to further exploitation & harm. The proliferation of LNG projects & petrochemical facilities, coupled with regulatory failure to enforce environmental standards, have allowed the fossil fuel industry to severely pollute the air & water without consequence. Residents of Port Arthur & other communities on the Gulf Coast suffer from high rates of cancer, respiratory infections & migraines. Water security is also an issue. Industrial water use is prioritized over the needs of local residents. Despite the serious health and safety concerns with the Freeport LNG terminal, Japan’s export credit insurance agency NEXI is planning to support the expansion of the Cameron LNG terminal located on Calcasieu Lake in Louisiana.


EXIM Lent Nearly $1 Billion to Fossil Fuel Projects in 2023

(New Republic, New York, 28 December 2023) President Joe Biden pledged to stop financing such projects overseas, and yet the U.S. Export-Import Bank continues to do so. While much of the country was occupied last week with holiday travel and time with family, a little-known government agency approved a $90 million guarantee for ING Capital to finance a liquified natural gas export facility in Texas. All told this year, that agency—the U.S. Export-Import Bank—has approved nearly $1 billion in fossil fuel lending, including $100 million for expanding an oil refinery in Indonesia and $400 million of insurance for revolving credit facilities to help commodity trading giant Trafigura purchase LNG. Not long after taking office, in January 2021, President Joe Biden signed an executive order which tasked the bank and other federal agencies with identifying “steps through which the United States can promote ending international financing of carbon-intensive fossil fuel–based energy.”


PPIB Announces $2 Billion Financial Close of Thar Coal-Fired Plant

(ProPakistani, Islamabad, 14 December 2023) The Private Power and Infrastructure Board (PPIB) announced the $2 billion financial close of the Thar coal-fired power project, which is currently under Chinese management. The project’s main sponsor is Shanghai Electric Group Corporation, while the coal supplier from Thar Block-1 is Sino-Sindh Resources Limited (SSRL). The ICBC, China Development Bank, Bank of Communications Co. Limited, China Minsheng Bank Corporation, Postal Savings Bank of China Co Limited, and Agriculture Bank of China are the main sponsors while Sinosure, China’s premier provider of export credit insurance, was the insurer. The project, which has a power capacity of 1,320MW, is part of the China-Pakistan Economic Corridor (CPEC). This plant brings the total installed capacity of five commissioned Thar coal-based power plants to 3,300MW.


Saudi Arabia concludes €1 billion financing deal with Italy’s SACE

(Economy Middle East, UAE) Saudi Arabia’s National Debt Management Center (NDMC) has concluded a financing arrangement worth €1 billion with the Italian insurance-financial group SACE. The deal is part of a broader initiative to strengthen trade and investment relations between Saudi Arabia and Italy. The kingdom is seeking to benefit from all available financing resources for government projects as part of its Vision 2030 strategy. Notably, the financing was made through several international banks and aims to finance Saudi Vision 2030’s development and infrastructure projects. Moreover, it is Saudi Arabia’s third financing of its kind following other financing from financial institutions through other export credit agencies.


North Field expansion project - a quantum leap in leadership of Qatar's global energy landscape

(Gulf Times, Doha, 25 December 2023) Qatar’s energy sector saw a quantum leap in October this year when His Highness the Amir Sheikh Tamim bin Hamad al-Thani laid the foundation stone of the North Field expansion project, which will raise the country’s LNG production capacity from the current 77mn tonnes per year (mtpy) to 126mtpy by 2026. QatarEnergy is partnered in this global project by TotalEnergies, Shell, ConocoPhillips, ExxonMobil, Eni, Sinopec, and CNPC. The article outlines a large series of LNG project and sales to multiple European countries, noting they have also secured $4.4bn financing for the Ras Laffan Petrochemicals project, a world scale integrated polymers complex in Ras Laffan Industrial City, Qatar. The senior debt financing package is comprised of commercial and Islamic facilities as well as Export Credit Agency (ECA) financing.


TFX: Export finance trends of 2023: ECAs spearhead success amidst global challenges and geopolitical shifts

(TFX News, London, 22 December 2023) ECAs have looked to adapt their support for buyers and exporters in a high interest rate environment, revisiting and revamping older policies. The success of this evolution can be seen in the data – export finance is set for a record-breaking year. Greater flexibility brings diversification in financing instruments – the rise of untied support schemes for large corporates has continued with major new deals involving Trafigura, Siemens Energy and Gunvor. This has also given ECAs a prominent new geopolitical role. Realpolitik has driven ECAs into the world of energy security and they must now be more proactive than ever in their support for national interest. Reforms to the OECD Arrangement on Officially Supported Export Credits arrived after years of negotiation and debate. While the impact of these changes will only be truly felt over the coming year, the market has reacted with optimism. Tenors for large-scale renewables projects have been pushed out to up to 22 years while most other projects can now go up to 15 years. The premium rate curve has also been adjusted for obligors with high credit risk ratings. These changes increase the affordability of the ECA product at a time of economic turmoil. However, questions remain: how will ECAs balance their portfolios as longer maturities become the norm? Should the Arrangement set a common position on support for fossil fuel projects? Can ECAs plug the funding gap as critical minerals make headlines? The phrase ‘critical mineral’ has now become standard parlance as countries look to secure the green energy transition with a steady supply of metal. However, the mining industry continues to suffer from a chronic lack of investment. ECA financing is increasingly available for projects that are deemed significant for national security. Over the course of 2023 ECAs supported several project financings including the Kathleen Valley lithium deal and the Hybar rebar steel mill facility. Expect to see this deal flow rise over 2024 if ECAs can make good on their expressions of interest. Talks are under way for three new mines led by Cerrado Gold, while BNP Paribas will lead the financing for Vulcan Energy’s zero-carbon lithium project.
Watch the TXF highlights of 2023 video!


Gunvor gets gas loan backed by SACE

(LNG Prime, Sarajevo, 15 December 2023) Geneva-based trader Gunvor has clos
ed a 400 million euro ($437 million) loan, backed by the Italy's SACE, to secure supplies of natural gas and LNG for Italian industry. The five-year term loan is guaranteed by SACE, the Italian export credit agency controlled by the country’s economy and finance ministry. Gunvor said in a statement that UniCredit acted as a global coordinator. The goal of the facility is to support Italian industry by securing natural gas and LNG supplies while promoting the export of Italy’s goods and services, the trader said.


Ukraine strikes deal to get 2 Royal Navy minehunters from UK with UKEF support

(Politico, Brussels, 11 December 2023) Britain will hand over two Royal Navy minehunter ships to Ukraine as the war-torn country grapples with a continued blockage of the Black Sea by Russia. U.K. Defense Secretary Grant Shapps will on Monday announce Ukraine's armed forces have "procured" the Sandown Class vessels from Britain's Royal Navy, although the details of the transfer are still being arranged through U.K. Export Finance, London's export credit agency. The move is part of a new Maritime Capability Coalition, set up with Norway, to help bolster Ukraine's maritime training, equipment and infrastructure. Norwegian Defense Minister Bjørn Arild Gram will be in London on Monday to launch the initiative. The new coalition wants to help Ukraine transform its navy to make it "more compatible with Western allies, more interoperable with NATO, and bolstering security in the Black Sea," the Defense Ministry said.


Italy’s export credit agency SACE unveils its ambitious ESG strategy at COP28

(Zawya, London, 1 December 2023) Italian export credit agency SACE unveiled a new ESG [environmental, social, and governance] strategy at COP 28, which will progressively align its business model with the United Nations Sustainable Development Goals (SDGs). The new strategy, unveiled at an offsite event during the COP28 summit in Dubai on Thursday, will integrate ESG criteria into decision-making processes and is underpinned by a scientific impact measurement system, the Agency said in a press statement. The Italian ECA is working on a €8.7 billion pipeline in the Gulf region for the Italian supply chain in strategic sectors such as renewables, infrastructure and construction, logistics, food and beverage, and energy. The Agency is also working on a €2 billion pipeline for Green Push transactions in the region.


Pakistan’s Export-Import Bank formally launched

(Pakistan Today, Islamabad, 21 December 2023) Caretaker Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, formally inaugurated Pakistan’s Export-Import Bank (EXIM) on Thursday. The move is aimed at strengthening external trade, attracting investments, and fostering broader economic growth in the country. The Caretaker Minister for Finance stated that institutions like EXIM have a global impact, noting that they disbursed a substantial $2.5 trillion in trade finance last year, benefiting exports across more than 60 countries. She stated that as EXIM Pakistan grows, it will play a crucial role in promoting trade finance through a well-structured institutional framework and effective policies. The finance minister stressed the need for streamlining export policy frameworks to contribute to the sustainability of the balance of payments, addressing historical challenges related to low levels of export earnings.


Türk Eximbank expected to provide exporters $41 billion in 2023

(Daily Sabah, Istanbul, 19 December 2023) The funding that Türkiye’s state-owned financial institution providing banking services to exporters extended this year is expected to reach $41 billion (TL 1.19 trillion) by the end of 2023, its chairperson said Tuesday. Export Credit Bank of Türkiye (Türk Eximbank) has provided $38 billion from January through November, General Manager Ali Güney said, adding that they supported 16,800 exporters, with the small and medium-sized enterprises (SMEs) ratio reaching 84%. “In 2022, we supported a total of 15,440 exporters, of which 81% were SMEs, while in 2023, the number of supported exporters increased to 16,800, with an SME ratio of 84%,” Güney told Anadolu Agency (AA). In another Daily Sabah article of 29 December, it was noted that Türk Eximbank had become a shareholder in the Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider. Türk Eximbank's first investment in an African entity makes it the first non-African sovereign shareholder in the AFC, it said in a statement.