What's New February 2020

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

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  • EDC considering support for controversial pipeline project
  • German gov't provides US$23 billion in export credit guarantees in 2019
  • ICIEC Insured $10.86bn Worth of Businesses In OIC Countries In 2019
  • EKN: On exporting Sweden’s fossil free energy future
  • G20 ECAs fund $30 bn a year in fossil fuels $30 bn under the radar
  • World Bank: Some development banks and ECAs contributing to debt problems
  • Quarantined Cruise Liners Pose Hidden Risk to Finnish ECA and Economy
  • Italy earmarks 350 mn euros for SACE fund to help coronavirus-hit firms
  • EDC review of Bombardier bribery compliance policies nears completion
  • Airbus bribery scandal triggers new probes worldwide
  • Bpifrance launchs multi-billion euro fund to support French firms
  • Tanzania Railway gets US$1.46b ECA backed financing
  • Euler Hermes supports attractive investment opportunities in Egypt

EDC considering support for controversial pipeline project

(350.org, New York, 24 February 2020) As thousands across Canada take to the streets in solidarity with indigenous Wet’suwet’en land defenders and hereditary chiefs, Export Development Canada (EDC) is considering handing over millions of dollars in public money to the very pipeline project that sparked this resistance. EDC has a track record of financing projects that violate Indigenous rights and disregard climate science. In 2018, they were essential to the federal government’s controversial buy-out of the TMX pipeline. Now, they could be committing an undisclosed amount of money to the Coastal GasLink Pipeline as early as February 26th.

https://350.org/no-public-money-for-the-coastal-gaslink-pipeline/?akid=114458.97...


German gov't provides US$23 billion in export credit guarantees in 2019

(Xinhua, Berlin, 17 February 2020) The German government provided some 21 billion euros (US$23 billion) in export credit guarantees for German exporters and banks in 2019, the Ministry for Economic Affairs and Energy (BMWi) announced on Monday. The figure marked an increase of 6 percent over the previous year, according to the ministry. Because of "continuing political and economic uncertainties in important international markets, demand for federal export credit guarantees remains high," the BMWi noted. In addition to numerous transactions by small and medium-sized enterprises last year, the German government continued to "cover large-volume transactions, especially in the shipping sector." The government also offered 3.3 billion euros of investment guarantees for German companies' projects overseas last year, according to the BMWi. Compared to the previous year, the investment guarantees had almost tripled, according to the BMWi.

http://www.xinhuanet.com/english/2020-02/18/c_138792862.htm


ICIEC Insured $10.86bn Worth of Businesses In OIC Countries In 2019

(ProShare, Lagos, 17 February 2020) The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) insured businesses globally to the tune of $10.86bn in 2019. The coverage was part of the report of the ICIEC reviewing its performance and activities for 2019. It translated to a 20.31% increase from 2018, which gulped total business insurance of $9.03bn. The majority of businesses insured in 2019 concentrated on two core regions: The Middle East and North Africa and also Sub-Saharan Africa and Europe. In terms of the impact made in 2019, the distribution by region showed that the Middleast and North Africa, MENA emerged the highest with 54.39%, while Sub-Saharan Africa came second with 42.34% and Asia with 3.28%. ICIEC Businesses Insured by Region in 2019 include Asia 3.28%, Middle East and North Africa: 54.39% and Sub-Saharan Africa 42.34%. Across all 3 regions, energy and manufacturing led the areas supported by ICIEC. Business insured in the energy sector totalled $5.5bn million, while in the manufacturing sector, the figure stood at $2.7bn. Organization of Islamic Cooperation country distributions were: Turkey-14.94%, Algeria -10.53%, UAE-10.18%, Jordan-8.9%, Kingdom of Saudi Arabia-6.18%, Egypt-3.38% and Lebanon-2.88%. ICIEC took part in the 2019 London Sukuk Summit, engaging with leading industry experts and institutions from across the world.

https://www.proshareng.com/news/Islamic%20Finance/ICIEC-Insured-$10.86bn-Worth-o...


EKN: On exporting Sweden’s fossil free energy future

(TFX, London, 12 February 2020) EKN's director general Anna-Karin Jatko set the tone for the Swedish export credit agency’s seminar in Stockholm on 9 February noting Swedish industry’s impressive ability to transform itself. Two companies, Siemens Industrial Turbomachinery and state-owned mining and mineral group LKAB, are among those doing transformative things in Sweden such as fossil-free steel products. Their exports have been covered by EKN for more than 80 years. The goal set by the Swedish government to be the “first fossil-free welfare society in the world” is an ambitious one, but Ibrahim Baylan, Sweden’s Minister for Business, Industry and Innovation is bullish. “It’s a huge challenge, but there are opportunities if it’s done in the right way,” he told the domestic and international banks and exporters, pointing out that the transition won’t be financed and delivered by the government of the country, whose population is only around 10 million, on its own.

https://www.txfnews.com/News/Article/6923/EKN-On-exporting-Swedens-fossil-free-e...


G20 ECAs fund $30 bn a year in fossil fuels $30 bn under the radar

(Space Daily / AFP, Paris, 30 January 2020) Rich nations are funnelling cash through government-backed financial institutions to provide $30 billion to fossil fuel projects each year that "run counter to the Paris Agreement", a new analysis showed Thursday. The export credit agencies (ECAs) of G20 countries currently provide more than 10 times more state-backed finance to oil, gas and coal projects abroad than they do to renewable energy schemes, the analysis said. That translates to $7.1 billion annually in the years since the signing of the landmark accord that enjoins nations to slash carbon emissions. The analysis singled out China, Japan, South Korea and Canada as among the worst offenders, accounting for 78 percent of G20 fossil fuel support from 2016-2018. UK ECA Export Finance, has not funded a coal-fired power plant since 2002, but a separate analysis showed it is financing millions of tonnes worth of overseas emissions through continued oil and gas funding.

https://www.spacedaily.com/afp/200130040116.014rcutz.html


World Bank: Some development banks and ECAs contributing to debt problems

(Reuters, Washington, 11 February 2020) World Bank President David Malpass on Monday chided other development banks for lending too quickly to heavily indebted countries, saying that some of them were helping worsen already-challenging debt situations. Malpass said at a World Bank-IMF debt forum in Washington that the Asian Development Bank, the African Development Bank, and the European Bank for Reconstruction and Development were contributing to debt problems. “We have a situation where other international financial institutions and to some extent development finance institutions as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Malpass said. In an interview, Malpass cited liens against Angola's oil revenues associated with Chinese debt that were hidden by non-disclosure agreements, convenient for politicians and contractors.

https://www.thehindubusinessline.com/news/world/world-bank-chief-some-developmen...


Quarantined Cruise Liners Pose Hidden Risk to Finnish ECA and Economy

(Bloomberg, Helsinki, 12 February 2020) The damage wrought by the coronavirus on the luxury cruise-liner business may hurt the economy of Finland more than most other countries’. The Finnish government has granted an “exceptionally high” number of export guarantees to cruise lines that have ordered luxury vessels from the Nordic country’s shipyards. So it’s more vulnerable than most to a slump in demand. The bulk of the guarantees involves just one industry and, because they exist outside the government budget, they’re largely excluded when calculating the state’s liabilities. But Finnish taxpayers are ultimately on the hook for as much as 11 billion euros ($12 billion) of credit risk stemming from these guarantees. Finnvera Oyj, the country’s export credit company, has guaranteed loans for Royal Caribbean Cruises Ltd. and Carnival Corp.

https://www.bloombergquint.com/onweb/quarantined-cruise-liners-pose-hidden-risk-...


Italy earmarks 350 mn euros for SACE fund to help coronavirus-hit firms

(IANS/AKI, Rome, 26 February 2020) The Italian government is making a total 650 million euros available to help Italian companies weather the coronavirus emergency, Foreign Minister Luigi Di Maio said on Wednesday. "Italy''s foreign trade institute (Ice) is making available 300 million euros for our companies and we will hold joint discussions on the best way to tackle this moment," Di Maio wrote on Facebook. A further 350 million euros will be set aside for Sace-Simest, Di Maio added, referring to a company that belongs to state lender Cassa depositi e prestiti and which is 76 per cent controlled by Italy''s export credit agency Sace. Economists have warned the disruption caused by the coronavirus outbreak whose epicentre is in the wealthy, industrial north of the country may tip Italy back into another recession - its fourth since 2008.

https://www.outlookindia.com/newsscroll/italy-earmarks-650-mn-euros-to-help-coro...


EDC review of Bombardier bribery compliance policies nears completion

(Compliance Week, Boston, 18 February 2020) Export Development Canada (EDC) announced it has completed its independent review of Bombardier’s compliance policies and procedures, concluding there is progress in its ethics and compliance program. EDC initiated the review of Bombardier in 2019 following leaked findings from the World Bank’s investigations into Bombardier’s 2013 contract with Azerbaijan Railways. As Compliance Week previously reported, a March 2017 report by investigative centers and media outlets around the globe alleged Bombardier paid “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom.

https://www.complianceweek.com/ethics-and-codes/bombardiers-compliance-program-p...


Airbus bribery scandal triggers new probes worldwide

(Reuters, Paris, 3 February 2020) Fallout from the Airbus bribery scandal reverberated around the world on Monday as the head of one of its top buyers temporarily stood down and investigations were launched in countries aggrieved at being dragged into the increasingly political row. Prosecution documents agreed by Airbus detailed a global network of agents or middlemen in transactions across the group's business and run from a cell in Paris where the group had part of its headquarters, split between France and Germany. Outlines of the operation and its annual budget of 250 million to 300 million euros had been reported by Reuters. fter Britain's Special Fraud Office reported that Airbus had hired the wife of a Sri Lankan Airlines executive as its intermediary in connection with aircraft negotiations, Airbus misled UK export credit agency UKEF over her name and gender, while paying her company $2 million the SFO said. Payments to "agents" in Nigeria, Korea, Taiwan, Colombia, Sri Lanka, Ghana and Malasia are being investigated.

https://finance.yahoo.com/news/airbus-bribery-scandal-triggers-probes-205521977....


Bpifrance launchs multi-billion euro fund to support French firms

(Reuters, Paris, 30 January 2020) French public investment bank Bpifrance has raised several billion euros from private and sovereign investors for a new fund that can be used to fend off activist investors targeting French companies. The new fund would give extra financial firepower to Bpifrance, which already manages a 15 billion euro portfolio of state shareholdings. In addition to managing French state shareholdings, Bpifrance's main business lines also include offering guarantees for banks' business loans and export credit insurance. In addition, Bpifrance has signed up to the Poseidon Principles to become the 17th signatory with a collective aim to limit carbon emissions from ships.

https://wkzo.com/news/articles/2020/jan/30/french-state-lender-to-launch-multi-b...


Tanzania Railway gets US$1.46b ECA backed financing

(East Africa Business Week, Kampala, 14 February 2020) Tanzania's Ministry of Finance has signed a facility agreement with Standard Chartered (SC.com) Tanzania for a US$ 1.46 billion loan to fund the construction of the Standard Gauge Railway (SGR) project from Dar es Salaam to Makutupora. According to the Tanzania Railways Corporation, it is expected that the railway will address current congestion challenges and decrease freight service charges by 40%, as the railway will be able to haul up to 10,000 tons of freight, equivalent to 500 lorries, per trip. It will also connect Tanzania to Burundi, Rwanda and The Democratic Republic of Congo, DRC, thereby playing a key role in enhancing regional trade. Standard Chartered Tanzania acted as Global Coordinator, Bookrunner and Mandated Lead Arranger on the facility agreement that is the largest foreign currency financing raised by the Ministry of Finance to date. The biggest component of financing comes from the Export Credit Agency Covered Facility(‘s) from the Export Credit Agencies of Denmark and Sweden.

https://www.busiweek.com/tanzania-gauge-railway-project-kicks-off-with-stanchart...


Euler Hermes supports attractive investment opportunities in Egypt

(MENAFN, Cairo, 8 February 2020) According to the Head of Deutsche Bank's representative office in Cairo, a higher economic growth rate, improved credit conditions, privatisation of public companies and listings in the local exchange will help Egypt to move towards a more private-sector-lead economic model. Deutsche Bank helped the government of Egypt arrange its first euro dominated bond ever, raising €2bn in the international debt capital markets. Another transaction is Deutsche Bank's participation in the financing of three power plants for €3.5bn for the Egyptian Electricity Holding Company (EEHC). Supported by German export credit agency Euler Hermes, these deals represent part of the single largest order ever for our partner, Siemens, the largest-ever STEF export finance transaction and the largest-ever export financing in the Egyptian market.

https://menafn.com/1099673685/Egypt-provides-attractive-investment-opportunity-t...