What's New for September 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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- Rich country ECAs sink billions into oil and gas despite Cop26 pledge
- ECA Market Booming Worldwide
- Export Finance for Future (E3F) and accountability
- Trade Credit Insurance Market Report by Development Factors 2031
- UK, Japanese and Italian ECAs support projects in Africa
- Uganda in talks with Chinese ECA for pipeline funds after Western banks cave in
- FSD Africa Investments Pledges $19.5 Million to Fortify Africa’s Climate Resilience
- UAE pledges $4.5bn for Africa clean energy projects
- USEXIM to Invest $5 Billion in Space Industry
- Ukraine’s ECA-backed exports hit record high
- US Exim approves first domestic manufacturing deal
- Could ECAs finance cleaner steel & industrial hubs?
- Hungary Exim wins World Bank support for ING loan
- Canada restricts subsidies, but delays plan to end billions more in ECA fossil fuel finance
Rich country ECAs sink billions into oil and gas despite Cop26 pledge
(Climate Change News, Broadstairs UK, 7 September 2023) The US, Germany and Italy have been accused of backsliding on a Glasgow promise to end public subsidies to fossil fuel projects overseas. They are among rich countries providing billions of dollars of public subsidies to fossil fuel projects abroad this year despite promises to end this support. Export credit and development agencies from six developed nations have approved $4.4 billion in funding for oil and gas projects overseas since the start of 2023, research from campaigning group Oil Change International shows. More than half of the total financing has been provided by the United States ($1.5 billion) and Italy ($1.2 billion), followed by Germany, Japan, the Netherlands and Switzerland. Common Dreams notes that: "The U.S., Italy, and Germany are going rogue by backtracking on their commitment to end international public finance for fossil fuels," said one analyst. "There needs to be accountability."
https://www.climatechangenews.com/2023/09/07/rich-countries-sink-billions-into-o...ECA Market Booming Worldwide
(openPR, 7 September 2023) The latest study published by HTF MI Research on the "Import Export Insurance Market'' evaluates market size, trend and forecast to 2029. Some of the Major Companies covered in this Research are Atradius (Netherlands), Euler Hermes/Allianz Trade (France), Coface (France), Zurich Insurance Group (Switzerland), Chubb Limited (Switzerland), Allianz SE (Germany), Liberty Mutual Insurance (United States), Tokio Marine Holdings (Japan), AXA XL (France), QBE Insurance Group (Australia), Sompo Holdings (Japan), AIG (American International Group) (United States). According to HTF Market Intelligence, the Global Import Export Insurance market [is] to witness a CAGR (compound annual growth rate) of 8.4%, an increase by USD 7.94 Bn, during the forecast period of 2023-2028. Global Import Export Insurance Market Breakdown by Application (Manufacturing, Agriculture, Energy, Retail, Others) by Type (Export Credit Insurance, Marine Insurance, Political Risk Insurance, International Product Liability, Others) by Organization Size (Large Enterprise, Small and Medium Enterprise (SMEs)) and by Geography (North America, South America, Europe, Asia Pacific, MEA).
https://www.openpr.com/news/3200455/import-export-insurance-market-is-booming-wo...Export Finance for Future (E3F) and accountability
(LinkedIn, Sunnyvale CA, Unknown date) An international coalition working to harness public export finance as a key driver in the fight against climate change. [ECA Watch note: Unfortunately E3F uses the LinkedIN professional network which relies on professional contacts, does not display dates for postings, and uses a format which is much less public than web page or Facebook networks, thus much less open to public information sharing and accountability.] E3F was launched by 7 European countries at ministerial level in April 2021 to align public export finance with climate goals. More specifically, the coalition aims to increase support for sustainable and climate-friendly projects and accelerate the progressive phasing out of fossil fuel related projects. With this, the coalition members, currently composed of the governments of Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Spain, Sweden and the United Kingdom, reaffirm their commitment to contribute to the climate goals of the Paris Agreement and to promote consistent international standards and pursue ambitious multilateral action. All current members are also signatories to the COP26 statement on international public support for the clean energy transition. From the E3F LinkedIn page: "Denmark is pleased to announce that Denmark will take over the chairpersonship of the Export Finance for Future (E3F) Coalition for the coming year. The coalition warmly thanks Germany for their efforts and for successfully steering E3F through the last year, maintaining our commitments and ambition through the energy crisis. There is a solid foundation for moving E3F further, and Denmark looks forward to taking up the mantle. The focus for the coming year will be on ensuring the continued credibility and increasing the visibility of the coalition, fostering dialogue with non-members and stakeholders, deepening the coalition and strengthening the coherence with other government initiatives." German NGO World Economy, Ecology & Development (WEED) has urged Denmark within E3F to "push all members to adopt ambitious local stratgies to end export finance for fossil fuels! - where Germany failed during their chairpersonship!"
https://www.linkedin.com/company/export-finance-for-future-e3f/Trade Credit Insurance Market Report by Development Factors 2031
(Benzinga, Detroit, 11 September 2023) The Trade Credit Insurance Market Insights of 2023 is an extensive and comprehensive report that provides a complete analysis of the market's size, shares, revenues, various segments, drivers, trends, growth, and development. The Trade Credit Insurance market is expected to grow annually by (CAGR 2023 - 2031). The Trade Credit Insurance market report is a striking 131 pages that includes a comprehensive table of contents, a list of figures, tables, and charts, as well as extensive analysis. This report offers valuable insights to industry stakeholders and vendors. The report highlights company profiles, financial metrics, market demands, technological innovations, and regional developments. [A single user license costs US$4000.]
https://www.benzinga.com/pressreleases/23/09/34464120/trade-credit-insurance-mar...UK, Japanese and Italian ECAs support projects in Africa
Zawya, Dubai, 7 September 2023) The UK and Japanese export credit agencies (ECAs) have signed a memorandum of understanding (MoU) to support their future collaboration on sustainable projects worldwide, especially in Africa. The terms of the agreement will guide the UK Export Finance (UKEF) and Nippon Export and Investment Insurance (NEXI) to collaborate on projects around the world – especially in Africa and the Indo-Pacific – which draw on UK and Japanese supply chains, the UKEF said in a statement. With a focus on export credit policy and co-investment projects, the partnership between the two ECAs will support the international competitiveness of UK and Japanese businesses as they seek to access global trading opportunities, the statement added. In other news, The director of Mozambique NGO Justiça Ambiental has charged that "rich countries are addicted to fossil fuels" and emphasized the importance of fighting against oil and gas projects, noting that "If there isn't a strong backlash, the rest of the world will follow soon and then there will be no chance for vulnerable countries like Mozambique to deal with the ravages of the climate crisis... Instead of supporting Mozambique to develop clean and just energy sources, these countries are pushing Mozambique down a fossil fuel development pathway." The director took aim at Italian export credit finance agency SACE for its involvement in "the gas rush in northern Mozambique, which has led to human rights abuses, devastated lives, increased conflict and militarization, and oppression of communities, journalists, and civil society."
https://www.zawya.com/en/projects/utilities/uk-and-japanese-export-credit-agenci...Uganda in talks with Chinese ECA for pipeline funds after Western banks cave in
(Reuters, Kampala, 25 September 2023) Uganda is in advanced talks with Chinese export credit agency SINOSURE to provide credit for its crude oil pipeline after pressure from environmentalists forced some Western banks to recoil from the project, a top official said on Monday. The 1,445-kilometre (898-mile) East African Crude Oil Pipeline (EACOP) is planned to help Uganda export its crude from oilfields in the country's west via a port on Tanzania's Indian Ocean coast. It is co-owned by the government of Uganda, France's TotalEnergies (TTEF.PA), China's CNOOC (0883.HK) and Tanzania's Tanzania Petroleum Development Corporation (TPDC). The project will cost $5 billion, including the cost of credit and 40% of the money will be raised through debt while the rest will come from equity. Activists contend that the project violates the Equator Principles, a set of standards adopted by these specific lenders for assessing, determining, and managing social and environmental risk for project finance. In addition to Kampala, London, Paris, and New York, the Eacop demonstrations also took place in 18 other cities, including Tokyo, Johannesburg, Frankfurt, Brussels, Sendai, Hoima, Nagoya, Toronto, Fukuoka, Goma, Cape Town, Amsterdam, Copenhagen, and Vancouver.
https://www.reuters.com/markets/commodities/uganda-talks-with-chinese-credit-age...FSD Africa Investments Pledges $19.5 Million to Fortify Africa’s Climate Resilience
(Techinafrica, South Africa, 8? September 2023) [A somewhat confused article apparently about an investment in un-named Latin American ride sharing services by an African investment fund backed by un-named ECAs.] "To enhance mobility and environmental sustainability in Latin America, FSD Africa Investments (FSDAi) [a UK International Development funded regional programme operating in more than 30 countries from its Kenya base] has forged a significant alliance with the [South African] ride-hailing service [app] InDrive." [An Uber cum taxi competitor now operating in 6 other African countries]. FSDAi’s investments in Acre Impact Capital’s Export Finance Fund I, the Catalyst Fund, and Camco’s Spark Energy Services underscore the institution’s commitment to collaborating with local investment managers and venture capitalists. The goal is to champion environmentally-conscious enterprises that might otherwise face challenges securing the necessary capital. [Support for privately owned automobile services is environmentally conscious?]
https://www.techinafrica.com/fsd-africa-investments-pledges-19-5-million-to-fort...UAE pledges $4.5bn for Africa clean energy projects
(Argus Media, Nairobi, 5 September 2023) The UAE will provide $4.5bn in finance to accelerate the development of clean energy projects in Africa, UN climate summit Cop 28 president-designate Sultan al-Jaber said today at the Africa Climate Summit in Nairobi. Abu Dhabi's state-owned renewables firm Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, the country's export credit agency and Amea Power — a Dubai-based renewable-energy company — will provide the funds, al-Jaber said. Africa development bank's Africa50 investment platform will act as a strategic partner to help identify initial projects. The pledge aims to "catalyse at least an additional $12.5bn from multilateral, public and private sources," al-Jaber said. "This initiative will target countries with clear transition plans, robust regulatory frameworks and a real commitment to putting the necessary grid infrastructure in place," he added. Africa's annual climate finance needs amount to $250bn, according to the African Development Bank, but the continent only receives 12pc of the total, and less than 2pc is going to adaptation, according to al-Jaber.
https://www.argusmedia.com/en//news/2486005-uae-pledges-45bn-for-africa-clean-en...USEXIM to Invest $5 Billion in Space Industry
(CNBC, Paris, 11 September 2023) The U.S. export credit agency is working through a $5 billion pipeline of applications related to the space industry, as companies look to fund projects in orbit in a tighter capital market. The Export-Import Bank of the United States, or EXIM, is no stranger to financing space projects such as satellite and rocket products. EXIM generally sees more applications during tougher economic times, as the previous bulk of its financing for the space sector came between 2010 and 2015. “In our pipeline related to this industry, about $1.3 billion are likely to come to fruition within a year and another $4 billion that we’re looking at are a little less further along,” Judith Pryor, EXIM’s first vice president and vice chair of the board of directors, said on Monday at the 2023 World Satellite Business Week conference.
https://www.cnbc.com/2023/09/11/us-export-import-bank-working-through-5-billion-...Ukraine’s ECA-backed exports hit record high
(Global Trade Review, London, 30 August 2023) The export credit agency (ECA) of Ukraine insured loans for exports worth more than Hrn1bn (US$27.1mn) for the first time last month, as the agency continues to increase the scale of its support for trade from the war-torn country. The Ukrainian ECA was founded in 2018, began operations in 2022 and in 2021 covered Hrn12.5mn in financing for exporters. A total of 10 exporters were supported across the country. The largest individual loan, for Hrn20mn, was issued in Kyiv. The three banks that have provided the most in loans in 2022/23 are two major Ukrainian banks, Oschadbank and Ukrgasbank, and Vienna-headquartered Raiffeisen Bank. They issued loans of Hrn256.3mn, Hrn229mn and Hrn210mn, respectively, financing exports worth a total of Hrn5.33bn. In July, Russia withdrew from the Black Sea Grain Initiative, an agreement that saw the safe shipment of grain from Ukraine, and so far no new deal has been successfully negotiated. The news also comes weeks after the Ukrainian central bank said it was removing a ban on ECA-backed loan repayments, put in place amid Russia’s invasion of the country. The National Bank of Ukraine had barred the repayment of principal and interest on loans from foreign lenders. Following the invasion, several ECAs suspended coverage for Ukrainian trade, and some claimed the ban on overseas payments was the reason. While several countries, including Canada, the UK and the US, kept their coverage and credit limits for exports to Ukraine, in September 2022 the agency asked ECAs to restore their pre-war coverage limits.
https://www.gtreview.com/news/europe/ukraines-eca-backed-exports-hit-record-high...US Exim approves first domestic manufacturing deal
(Global Trade Review, London, 5 September 2023) The Export-Import Bank of the United States (US Exim) has approved the first transaction under its domestic manufacturing programme, a direct loan of US$4.7mn to a Pennsylvania-based technology firm. The transaction comes more than a year after US Exim formally launched its Make More in America Initiative (MMIA), which in the time since has made available the agency’s range of medium and long-term loans for the establishment or expansion of US-based manufacturing facilities with an “export nexus”. US Exim had been recommended to explore the possibility of creating such a product a year earlier, following a 100-day White House review of supply chains for critical products, such as minerals and semiconductors.
https://www.gtreview.com/news/americas/us-exim-approves-first-domestic-manufactu...Could ECAs finance cleaner steel & industrial hubs?
(Clean Technica, Bradenton FL, 15 August 2023) The climate finance community should be watching Sweden. Swedish steelmaker H2 Green Steel (H2GS), founded in 2020 to produce (using renewable hydrogen), is completing a landmark €5 billion+ fundraise for its first plant in Boden, near the Arctic Circle in northern Sweden, an industrial project finance template is taking shape and it’s important: heavy industry produces 30% of global carbon emissions and steelmaking is 7% alone. Export credit agencies may be less nimble than private lenders, due to the government oversight and political constraints they must operate within. But for these first-of-a-kind deals, they are proving to be powerful allies, both as debt guarantors and direct lenders. In the H2GS deal, Swedish ECA Svensk Exportkredit participated in the €3.3 billion senior debt tranche alongside commercial banks. Meanwhile, the core ECA, Allianz-owned Euler Hermes, committed to guaranteeing €1.5 billion of the senior debt.
https://cleantechnica.com/2023/08/15/5-lessons-for-industrial-project-finance-fr...Hungary Exim wins World Bank support for ING loan
(Global Trade Review, London, 13 September 2023) The Hungarian Export-Import Bank (Hungary Exim) will boost sustainable lending after securing a €300mn loan extended by investment bank ING and covered by the investment insurance arm of the World Bank. The World Bank’s Multilateral Investment Guarantee Agency (Miga) issued €386mn in guarantees to ING, covering the Dutch lender’s principal, interest and other financing costs on the debt. Hungary Exim says it will use the credit line to launch new green financing products and primarily to support SMEs, although some “larger” sustainable projects may also benefit.
https://www.gtreview.com/news/europe/hungary-exim-wins-world-bank-support-for-in...Canada restricts subsidies, but delays plan to end billions more in ECA fossil fuel finance
(Above Ground, Ottawa, 4 August 2023) Ottawa has taken a major step forward towards ending another significant component of its fossil fuel support. It announced last week a policy that makes Canada the first G20 country to publish a plan for delivering on the group’s 2009 commitment to phase out so-called “inefficient” subsidies to the fossil fuel sector. Under the new policy, federal support identified as a fossil fuel subsidy can no longer be provided unless it fulfills one of six criteria. Unfortunately, these criteria provide for significant exemptions that may allow fossil fuel companies peddling false climate solutions to benefit from billions of dollars a year in tax breaks and public spending. For example, Ottawa will still provide subsidies that facilitate “abated production processes” – language often used by oil companies to describe their use of carbon capture technology to reduce emissions from their own operations. This ignores the much larger quantity released when the fuels they produce are burned. Perhaps most significantly, the new policy leaves intact public financing from Export Development Canada (EDC), which Ottawa – contentiously – doesn’t consider a subsidy. Last year alone, EDC provided roughly $20 billion in financing to oil and gas companies, mostly in the form of loans, guarantees and insurance. This represents the overwhelming bulk of Canada’s financial support for the sector. Ottawa has pledged to “develop a plan” to phase out this financing as well. As of January the government has, under its Glasgow policy, barred EDC from providing new, direct financing for most oil and gas activities abroad. Yet this doesn’t touch the majority of EDC’s fossil fuel finance, which supports the industry’s operations in Canada.
https://aboveground.ngo/canada-restricts-subsidies-but-delays-plan-to-end-all-fo...