(Korea Times, Soeul, 24 October 2022) The Export-Import Bank of Korea (Eximbank) is holding a meeting of environmental and social practitioners October 24-25 to help address environmental and social issues when providing officially supported export credits. Eximbank is co-hosting the 46th OECD Environmental and Social Practitioners’ Meeting in Seoul jointly with the Korea Trade Insurance Corporation. The meetings have been held at the OECD headquarters in Paris in the first half of each year, while the meetings for the second half are held in one of the member countries. Around 50 experts from 25 OECD member countries are participating, sharing ideas to evaluate the environmental and social impact of projects and policies and practices related to due diligence where official export credit support is requested, as well as minimizing such impact. A Korean Eximbank employee was appointed in 2018 as chair of the OECD Working Party on Export Credits and Credit Guarantees, an entity established in 1963 under the Trade Committee of the OECD
Newsletter
EU challenges China’s Belt and Road with €300bn Global Gateway
(Business News East, Berlin, 2 December 2021) The European Commission on December 1 revealed details of the EU’s €300bn ($340bn) Global Gateway Strategy, a global investment plan hailed as a “true alternative” to China’s Belt and Road Initiative (BRI, or B&R). China has funded railways, roads and ports as BRI projects but it has come under fire from critics who say Beijing leaves some countries weighed down with loans they cannot hope to pay off. A centre-piece of Chinese foreign policy, BRI is accused of spreading “debt-trap diplomacy”. Critics of Global Gateway say in many ways it amounts to a repackaging of cash. As China pushes back against claims of “debt-trap diplomacy”, the European Commission thinks it can sell Global Gateway as a “trusted brand”.
China’s no new coal power overseas pledge, one year on
(China Dialogue, London (Beijing?), 22 September 2020) Reform of investment and financing models still needed in order to better support green transitions. On 21 September 2021, China’s president, Xi Jinping, told the UN General Assembly via video link that China would increase support for green and low-carbon energy in developing countries, and not build any new coal-fired power projects overseas. China has been a major builder of coal power plants around the world, often providing both the finance and the technology. The Exim Bank of China, the China Development Bank (CDB) and the China Export and Credit Insurance Corporation (Sinosure) are the main state-owned financial institutions funding overseas projects, and as such have been quick to respond to the change in government policy. Exim Bank has successfully issued 3 billion yuan (US$425 million) in green bonds earmarked for clean energy investment. The Green Belt and Road Initiative Center provides research, analyses and information on the policies, economics, environment, sustainability and green finance of the Belt and Road Initiative (BRI) – also known as Silk Road Initiative. The Green BRI Center is part of the International Institute for Green Finance (IIGF) of the Central University of Finance and Economics (CUFE) in Beijing.
US exports face empty container pile-up as supply chains recover
(Global Trade Review, London, 21 September 2022) Analysts are warning that ports in North America could become overwhelmed by a build-up of empty containers, as trans-Pacific supply chains and transportation times gradually return to pre-pandemic levels. The average time taken to deliver cargo soared to 112 days in February this year, nearly three times the average before Covid-19 struck, according to Denmark-based research and analysis firm Sea-Intelligence. As of late August, the most recent point for which data is available, that figure had dropped to 88 days.
India has $5 bn new export opportunity in Russia
(Fortune India, Gurugram, 15 September 2022) With Europe maintaining trade sanctions on Russia, India has the potential to export $5 billion worth of goods to Russia in the next 12 months, A Shakhtivel, President, Federation of Indian Export Organisations (FIEO) has said. The export demand is high and supplies can start as soon as the rupee payment mechanism gets operationalised, he added. Russia now accounts for 18% of India’s crude imports; up from 1% The ongoing Russia-Ukraine conflict may open up a $22.5 billion worth export opportunity across 83 commodities for India, says an analysis carried out by MVIRDC World Trade Centre, Mumbai.
EXIM strategy: Climate change, China, OECD ECA backsliding challenge competitiveness
TFX, London, 14 September 2022) The most recent edition of US EXIM’s Competitiveness Report makes plain that although US EXIM medium- and long-term support has grown since obtaining a quorum in 2019, much more must be done to advance America’s export competitiveness in an era of volatility and crowded competition. Released at the end of June, there were few surprises in the focus of the 55th edition of US EXIM’s Competitiveness Report – in short, climate change and US exporters facing increased competition from Chinese companies backed by historic levels of their government’s financing. But if the focus was no surprise, the wider scope of the challenges facing US EXIM was. The key point is that China is not US EXIM’s only problem. By not complying with OECD rules China has induced other countries to follow suit, skewing the competitive landscape. Indeed, many European ECAs have extended and developed their pandemic flexibility, offering new and innovative support for domestic and foreign exporters that don’t necessarily meet the terms of the OECD arrangement. As such US EXIM faces considerable challenges facilitating a level playing field.
TFG partners with UKEF and DIT to create a trade and export finance guide
(Trade Finance Global, London, 6 September 2022) Trade Finance Global (TFG) has partnered with UK Export Finance (UKEF), the UK government’s export credit agency, and Department for International Trade (DIT) to produce the UK Trade & Export Finance Guide. The 60-page guide comes against a backdrop of complex geopolitical circumstances and an ever-changing financial landscape. Exploring recent issues, such as the COVID-19 pandemic, Brexit, and the current Russia-Ukraine conflict, this guide aims to paint a clearer picture of how to navigate the current economic status of the industry.
Ukraine seeks $400 billion for foreign investment & export credit
(Pipa News, Pakistan,7 September 2022) Ukraine has begun attracting foreign investment of up to $400 billion in projects across the economy, even as it faces a protracted war with Russia and a slump in production. The Kiev government has identified hundreds of technology, agribusiness, clean energy, defense, metallurgy and natural resources initiatives that it hopes will attract international investors, backed by loan guarantees and insurance from Western donors. Ukrainian officials recognize that Western investors need protection. They want access to World Bank war risk insurance products and Western export credit institutions to provide guarantees.
Chilean firm to receive Korean ECA $100 million fund for stable Australian lithium supply to South Korean firms
(Aju Business Daily, Seoul, 7 September 2022) Korea Eximbank, an official export credit agency in South Korea, will provide a fund of $100 million to SQM, a Chilean supplier of plant nutrients, iodine, lithium and industrial chemicals, to help ensure a stable supply of lithium for domestic battery and cathode material makers. The fund including $55 million in loans and $45 million in guarantees will be used to invest in SQM’s development of lithium mines in Australia and the renovation and expansion of production facilities. SQM, one of the world’s biggest lithium producers, should supply lithium worth about $470 million to South Korean companies for 10 years.
Sri Lanka’s Chinese debt making international headlines
(The Island, Colombo, 9 September 2022) Sri Lanka’s debt to China is making headlines in international and local media again. Media reports partly blame China and its lending practices, for Sri Lanka’s debt crisis, says a Verité Research media release. It said: The publication titled: “The Lure of Chinese Loans: Sri Lanka’s experiment with a special framework to finance its infrastructure” sheds light on the perils of creating frameworks to facilitate deviations from competitive bidding to tap into concessional export credit from emerging economies such as China. The report analyses the design and execution of the special framework and finds that the lack of rigour in the evaluation process and the ability of decision-makers to exercise excessive discretion made the framework highly prone to abuse and misuse.
