What's New for May 2024

"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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  • U.S. EXIM Funding Fossil Fuels Abroad
  • End Polluter Welfare Act Supported by Over 300 US Organizations
  • US EXIM enters the battle against Chinese boycott of Lithuania
  • Audit slams US EXIM for weak performance in Africa
  • Bumper year for trade credit insurance, but claims rising
  • K-SURE to provide $1.3 bn credit for Saudi petrochemical project
  • Scottish firms win in 1st UKEF deal for oil & gas de-re?-commissioning
  • Vietnam's says HSBC to arrange funds for $1.49 bln refinery project
  • World Bank Group, NEXI to Bolster Investments in Developing Countries
  • HKECIC signs Guangdong pact with Sinosure
  • Etihad Credit Insurance records 21-fold growth
  • UK Export Finance unveils ambitious new target for SME support

U.S. EXIM Funding Fossil Fuels Abroad

(Living on Earth, Lee NH, 3 May 2024) Despite an international agreement to phase out financing for fossil fuel projects abroad, the Biden administration recently approved a $500 million dollar loan guarantee for an oil and gas drilling project in Bahrain. The Biden-Harris administration is coming under fire for failing to keep its promise to stop funding international fossil fuel projects. One of those critics is Nina Pušić, senior climate finance analyst with the advocacy group Oil Change International. At the U.N. Climate Conference in 2021, which was called COP26 in Glasgow, 39 governments and public finance institutions signed on to this initiative called the Clean Energy Transition partnership, also known as the Glasgow Statement. They promised that within one year they would stop new direct financial support to fossil fuel projects within the year. It was the Biden administration who signed on. So even though the Biden administration has promised that U.S. government agencies would stop funding fossil fuels, U.S. EXIM and DFC have decided that they're going to continue doing that regardless. And it wasn't just at the U.N. Climate Conference in 2021 where the Biden administration signed on to this, but it was also at the G7 in 2022. So it's not only one but actually two international commitments that this administration made.


End Polluter Welfare Act Supported by Over 300 US Organizations

(Sierra Club, Washington, 23 May 2024) Senator Bernie Sanders (I-VT) and Representative Ilhan Omar (D-MN) reintroduced the End Polluter Welfare Act, the most comprehensive legislative proposal to address the billions in special interest subsidies that disproportionately flow to the oil, gas, and coal industries. The reintroduction comes with the support of over 300 environmental, climate, consumer protection, and frontline organizations who have signed an organizational letter backing the legislation. These subsidies include century-old tax loopholes, giveaway leasing rules for extraction on our public lands and waters, and newer investments of billions into false solutions that keep fossil fuel projects alive for decades longer through investments from export credit and development finance agencies.” Among the over 300 signatories are prominent organizations such as the Sierra Club, Greenpeace USA, Friends of the Earth U.S., Oxfam America, People's Action, Public Citizen, Sunrise Movement, Oil Change International, WE ACT for Environmental Justice, 350.org, and the League of Conservation Voters.


US EXIM enters the battle against Chinese boycott of Lithuania

(ABC News, Washington, 27 May 2024) After Lithuania allowed Taiwan's de-facto embassy in Vilnius to bear the name Taiwan, instead of Taipei — Taiwan's capital city — as preferred by Beijing, Lithuanian businesses saw their cargo shipments to and from China stranded, and they were warned by major European businesses that Lithuanian-made auto parts would be barred from products for the Chinese market. Instead of caving in, Lithuania asked for help and American diplomats sought new markets for Lithuanian goods. The Export-Import Bank in Washington provided Vilnius with $600 million in export credit, and the Pentagon signed a procurement agreement with the country. The U.S. State Department has set up an eight-person team known as “the firm” to provide help to countries cut off from Chinese trade. Other examples: When a Norwegian committee in 2010 awarded the Nobel Peace Prize to a Chinese dissident, Beijing stopped buying salmon from the Nordic country. Two years later, China rejected banana imports from the Philippines over a territorial dispute in the South China Sea. In 2020, Beijing responded to Australia’s call for an investigation into the origin of the COVID-19 pandemic by raising tariffs on Australian barley and wines.


Audit slams US EXIM for weak performance in Africa

(Semafor, Legos, 23 May 2024) A scathing evaluation of the US Export-Import bank’s uneven approach to supporting US trade with sub-Saharan Africa has put its management on the backfoot. It comes the bank scrambles to make the opposite case with a slew of recent deal announcements. The report from the Office of the US Inspector General said the export credit agency had failed to expand its performance to achieve its sub-Saharan Africa mandate and in fact declined over the evaluation period from 2014 to 2023. It also found that, despite multiple Exim officials taking initiatives related to the region, there was no specific program or office designated with the responsibility. A senior Exim official pushed back at the report for not providing “a comprehensive picture of our efforts” in the region where it has a total exposure of over $8 billion.


Bumper year for trade credit insurance, but claims rising

(Global Trade Review, London, 29 April 2024) Export credit agencies and commercial trade credit insurers have celebrated an “exceptional” year for some key product lines, but are also experiencing a sharp rise in claims from customers, newly released data shows. New short-term trade credit insurance business rose 6% year-on-year to US$2.8tn in 2023, while medium and long-term (MLT) business shot up by 40% to US$165.4bn, according to a snapshot of full-year 2023 data released by the Berne Union on April 25.


K-SURE to provide $1.3 bn credit for Saudi petrochemical project

(Maeil Business News, Seoul, 24 May 2024) The Korea Trade Insurance Corp. (K-SURE), an export credit agency, said on Thursday that it will provide mid- to long-term export financing worth 1.7 trillion won ($1.3 billion) for the mega-scale Amiral petrochemical complex project in Saudi Arabia won by South Korean construction company Hyundai Engineering and Construction Co.


Scottish firms win in 1st UKEF deal for oil & gas de-re?-commissioning

(UKEF, London, 1 May 2024) UK Export Finance (UKEF) has closed its first ever transaction supporting overseas oil and gas decommissioning, securing finance for a major contract which benefits over 70 Scottish firms. The export credit agency has issued a $7.5 million guarantee which allows Brazilian contractor Ocyan to secure financing from ABC International Bank plc for new equipment from Scottish business Maritime Developments Ltd (MDL).  However in another online article, it turns out that this contract could be to remove old pipelines so as to re-commission idle oil rigs! UKEF does not name the rigs to be decommissioned. Yahoo Finance notes that "The contract [with Ocyan] will help Petrobras maintain a reliable supply of natural gas to its customers. The revitalized pipelines [eg Jorge Mitidieri and Renato Duque] will be able to transport additional gas, which will help meet the growing demand for natural gas in Brazil. Cost Savings: The deal will also help Petrobras in reducing costs. The new [recommissioned] pipelines will be more efficient than the old ones, which will help PBR save money on energy costs." It is not clear whether the decommissioned rigs are to be revamped or abandoned. Brazil is home to over 25% of the global FPSO fleets. At any rate, Brazil is clearly not leaving the offshore oil/gas rig industry thanks to UKEF, as implied by their press release.


Vietnam's says HSBC to arrange funds for $1.49 bln refinery project

(Tank Terminals, Hong Kong, 17 May 2024) Binh Son Refining and Petrochemical JSC (BSR), a subsidiary of state-owned Petrovietnam and operator of the Dung Quat oil refinery, has selected HSBC to coordinate an export credit agency (ECA) arrangement for a $1.49 billion expansion. In March, BSR had said it would spend VND36,397 billion ($1.49 billion) on expanding the refinery, increasing its capacity by 16% to 171,000 barrels per day or 7.6 million tons a year. The expansion also aimed to make products meet Euro V emission standards and other environmental requirements, while improving the facility’s flexibility to refine different kinds of crude oil. BSR aims to put the plant into operation in 2028 after 37 months of construction.



(ICE, Vietnam, 9 May 2024) Italian ECA SACE has unveiled a US$1.3 billion aid package aimed at supporting Italian businesses in Vietnam. Vietnam, one of the fastest-growing economies in Southeast Asia, has become a focal point for Italian companies seeking investment opportunities, said a SACE representative.“With a capital support plan of up to US$1.3 billion, Italian businesses as well as Vietnam will have easier access to technology and supplies from Italy to promote investment and development,” said Michal Ron, head of International Business at SACE, at a press conference on May 7.The funding will prioritize sectors such as renewable energy, manufacturing, and agriculture.


World Bank Group, NEXI to Bolster Investments in Developing Countries

(IFC, Washington, 28 May 2024) The World Bank Group's Multilateral Investment Guarantee Agency (MIGA) and International Finance Corporation (IFC) today signed three-year cooperation agreements with Nippon Export and Investment Insurance (NEXI), the official export credit agency of Japan, to promote foreign direct investment in developing countries. The agreements underscore the organizations' shared commitment to expanding investment opportunities and mitigating risks in developing countries. The cooperation between MIGA and NEXI builds on a 2020 agreement aimed at facilitating Japanese investment in developing countries through co-insurance and reinsurance instruments.


HKECIC signs Guangdong pact with Sinosure

(The Standard, Hong Kong, 23 May 2024) The Hong Kong Export Credit Insurance Corporation signed a pact with the Guangdong Branch of China Export & Credit Insurance Corporation, Sinosure, yesterday to strengthen cooperation on export credit insurance services for businesses across Guangdong and Hong Kong.


Etihad Credit Insurance records 21-fold growth

(24-7 Press Release, Seattle, 23 May 2024) Etihad Credit Insurance (ECI), the UAE Federal export credit company, unveiled its growth trajectory in its annual report for 2023. With a gross exposure of AED 9.6 billion (US$2.61 billion), ECI experienced a 21-fold increase compared to 2019. ECI's supported UAE exporters across 17 sectors in 110 countries, amounting to a non-oil trade and investment of AED 14 billion in 2023. This was facilitated by 21 agreements with government export credit agencies.


UK Export Finance unveils ambitious new target for SME support

(Global Trade Review, London, 1 May 2024) UK Export Finance (UKEF) has vowed to support 1,000 SMEs per year before the end of the decade, a big jump on current levels. The export credit agency (ECA) unveiled the target in its 2024-29 business plan this week. The plan also includes pledges to enable £12.5bn of export contracts and provide £10bn of “clean growth” financing by 2029. UKEF’s support for SMEs is closely scrutinised by UK lawmakers, because small businesses tend to find it harder to secure trade and export finance, compared to their larger peers. A handful of large companies, such as Rolls-Royce and BAE Systems, have previously scooped up the largest share of UKEF’s financial support by value. While the number of SMEs benefiting from UKEF’s backing is already high as a proportion of the agency’s overall customers, it still falls far short of the target of 1,000. Around 210 of the 251 customers UKEF supported in the 2023-24 financial year were SMEs. UKEF says it plans to boost its assistance to SMEs partly by on-boarding non-bank financial institutions that specialise in small business finance. A source at UKEF says such financial institutions would likely provide financing backed by a UKEF general export facility guarantee and need to have prior experience with trade finance. UK Export Finance (UKEF) typically charges premium rates of 6% to 7%, higher than other European ECAs according to an annual benchmarking report from the British Exporters Association.