(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.
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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.
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.”
The BRICS come of age [But what role for ECAs?]
(Project Syndicate, Cairo, 18 August 2023) by Hippolyte Fofack, Chief Economist and Director of Research at the African Export-Import Bank (Afreximbank). Given the BRICS’ economic success, more than 40 countries have shown an interest in joining the group and 22 have formally applied for membership. Expansion, trade and investment facilitation will be high on the agenda of the group’s summit scheduled for August 22-24 in Johannesburg. They include many issues on which the bloc’s views diverge from those of the G7, such as sustainable development, global governance reform (especially reform of the IMF), and de-dollarization. An enlarged grouping could deepen trade and settlement in local currencies, accelerate de-dollarization, and lead the transition to a more multipolar world. The economic potential of Brazil, Russia, India, and China, the group – called the BRICS since the addition of South Africa – contributes more to global GDP (in purchasing-power-parity terms) than the G7. Since 2014, Russia’s trade with G7 countries has fallen by more than 36%, owing to unprecedented Western sanctions, while its trade with the other BRICS has increased by more than 121%. The International Monetary Fund forecasts that China and India alone will generate about half of global growth this year. With geopolitical tensions running high, and the weaponization of the dollar for national-security purposes continuing to escalate, the BRICS have taken on new significance, offering trade diversion and other relief to weaken the effectiveness of sanctions and fast-tracking the transition to a multipolar world. Read the Summit Declaration here.
Four Emirati women lead UAE’s powerful financial institutions
(Gulf Business, Dubai, 28 August 2023) With a career spanning nearly two decades, Raja Al Mazrouei joined Etihad Credit Insurance (ECI) as a board member in January 2022 and became the export credit agency’s managing director and CEO in November 2022 and January 2023, respectively. Other women recognized on Emirati Women’s Day include: Hana Al Rostamani, Group CEO, First Abu Dhabi Bank; Rola Abu Manneh, CEO, Standard Chartered UAE and Maryam Buti Al Suwaidi, CEO, Securities and Commodities Authority
UKEF to provide £192m loan guarantee to boost Ukraine nuclear capabilities
(Sky News, London, 23 Augut 2023) Energy secretary Grant Shapps has visited Ukraine to announce fresh financial support for its nuclear fuel supply in a bid to end its reliance on Russia. The UK will provide a £192m loan guarantee to Ukraine’s national nuclear company, Energoatom via the UK’s export credit agency, UK Export Finance. Through the deal, UK-headquartered Urenco will supply Energoatom with uranium enrichment services that are vital for nuclear fuel, with nuclear power generating over half of the country’s electricity. The government hopes this will strengthen Ukraine’s energy security and help end the country’s dependence on nuclear services and nuclear fuel from Russia, as well as further isolate Vladmir Putin.
New Chinese growth drivers sought to boost exports amid weak global demand
(China Daily, Beijing, 9 August 2023) China’s foreign trade grew steadily in the first seven months of the year but exports in July declined at a steeper-than-expected pace amid subdued global consumer demand, which highlights the need to roll out stronger policy steps to further boost the country’s foreign trade, experts said on Tuesday. Li Dawei, researcher at the Chinese Academy of Macroeconomic Research’s Institute for International Economy, said the authorities should offer services such as exchange rate hedging, process export tax rebates faster, expand the scale of export credit insurance services and enhance customs clearance to foster new drivers of export growth amid falling global demand for the country’s traditional export products such as electronic items, clothing and footwear.
India’s Reliance Jio ties up $2.2 bn funding from Sweden’s EKN for 5G equipment
(Business India Today, Noida, 6 August 2023) “Reliance and its subsidiary Jio Infocomm JIL tied up its first ever Swedish Export Credit Agency (EKN) supported facilities of $2.2 billion equivalent making it the largest cover ever provided by EKN for a deal to a private corporate globally,” Reliance Industries said, adding that the proceeds of the facilities shall be utilised to finance the equipment and services in relation to JIL’s pan-India 5G roll out. Jio has committed to an investment of Rs 2 lakh crore to fulfill its ambitious pan-India 5G rollout plan, the company said. Jio started 5G network rollouts in October 2022. “Jio has launched its True 5G services across 2,300-plus cities/towns as of March 2023 and targets to achieve pan-India coverage by December 2023,” the annual report said.
EDC trying to reclaim $347 million insurance payout to Suncor linked to Libya unrest
(Bowen Island Undercurrent, BC, 2 August 2023) The federal government is trying to reclaim nearly $350 million in insurance paid to Suncor Energy Inc. by Export Development Canada in the wake of political unrest in Libya. The oil giant claimed $300 million in risk mitigation payments for losses linked to Libyan energy assets after fighting between rival political factions spread to the country’s oil crescent region in 2015, a Federal Court judge said in a ruling this week. The total — $347 million with interest — was determined by an arbitrator in 2019. But Export Development Canada, which insures against losses caused by political violence, argues that Suncor’s oil production facilities still deliver returns for the Calgary-based company. The insurance claim was paid under a policy underwritten by Export Development Canada for Petro-Canada in 2006, which Suncor then came into following their merger in 2009.
EU’s €45bn plan to tackle Latam productivity woes
(Financial Times, London, 31 July 2023) The European Commission’s recently released EU–LAC Global Gateway Investment Agenda identifies 130 types of projects scattered across the region in which it plans to inject €45bn by 2027. The roadmap targets the green transition, digitalisation, education and health, with projects in Chile, Colombia and Panama. “This is an enormous opportunity for Latin America to increase [European] partnerships, and receive not just investment but also technology transfer and finance to transform these areas,” says José Manuel Salazar-Xirinachs, executive secretary of the UN’s Economic Commission for Latin America and the Caribbean (ECLAC). The €45bn programme consists of funds and guarantees provided by the EU, its member states, development finance institutions and export credit agencies.
