(Bloomberg, Ottawa, 19 July 2022) Canada’s export credit agency is targeting a 15% cut to its financing portfolio for upstream oil and gas production by 2030. The target will include a 3% shift – against a 2020 baseline – in the composition of production to gas from oil, recognizing that the former may play a role in supporting energy demand during the transition to net-zero emissions. EDC, a government-backed lender, also wants a 37% reduction in emissions per passenger kilometer from its airlines portfolio by 2030. The new targets for two sectors that make up a sizable portion of the agency’s financing business are part of its broader push to achieve net zero by 2050. Meanwhile, UKEF claims to have spent “its first year without providing any support for overseas fossil fuel projects”.
Newsletter
SK On Secures US$2bn in loan guarantees from 3 ECAs to Invest in Europe
(Business Korea, Seoul, 29 July 2022) SK On, a battery business subsidiary of SK Innovation, has raised a total of US$2 billion for investment in Europe through official ECAS in Korea and Europe. The company plans to use the funds to finance the construction of its third European plant in Ivancsa, Hungary. The policy financial institutions that helped SK On to secure funds were Euler Hermes, a German trade insurance agency, Korea Trade Insurance Corp., and the Export-Import Bank of Korea. The three institutions provide guarantees or insurance for SK On in the process of getting loans from overseas banks. Germany’s Euler Hermes and Korea Trade Insurance Corp. will provide insurance worth USUS$800 million and USUS$700 million, respectively. The Export-Import Bank of Korea will offer a US$200 million guarantee. In addition, the Export-Import Bank of Korea will directly lend US$300 million to SK On.
Taiwan’s Formosa 2 offshore wind plant starts with broad international ECA support
(Project Finance International, London, 23 July 2022) The 367MW Formosa 2 offshore wind plant has achieved the first delivery of power to the Taiwanese grid, following the installation of 12 turbines. It will have 47 turbines when completed. The international lenders were BNP Paribas, Credit Agricole, Societe Generale, Natixis, ING, DBS, OCBC, MUFG, SMBC, ANZ Bank and HSBC alongside domestic banks CTBC, E Sun, Fubon Bank and KGI Bank, and institutional lender Taiwan Life Insurance. The export credit agencies are Credendo of Belgium, EKF of Denmark, K-Sure, and UKEF. The project, referred to as Haineng Fengdian, is off the island’s Miaoli County and is being developed by Japan’s JERA (49%), Macquarie’s Green Investment Group (GIG, 26%), and Taiwanese company Swancor Renewable Energy (25%).
China’s Sinosure registers steady business growth
(Xinhua, Beijing, 28 July 2022) China’s only policy-oriented insurer specializing in export credit insurance reported steady business growth in the first half of 2022. The China Export & Credit Insurance Corporation, also known as SINOSURE, had underwritten about 445.13 billion U.S. dollars worth of insured businesses during the period, up 11.8 percent year on year, according to the company. SINOSURE served nearly 164,000 clients in the first six months, a yearly increase of 15.2 percent, said the company. The company said it will make additional efforts to tide enterprises over difficulties and improve its digital services in the second half of the year, giving full play to its role in supporting exports and the Belt and Road Initiative.
French ECA supports Côte d’Ivoire coastal road loan
(Construction Index, 29 July 2022) Standard Chartered has announced €104 million (£88 million) of social loan financing for the Republic of Côte d’Ivoire’s Ministry of Economy and Finance, to rehabilitate a critical transport route in the south of the West African country. The money will go towards upgrading a stretch of the coastal road connecting the country’s two main port cities, Abidjan and San Pedro, as well as improving a 93km section of road between the towns of Dabou and Grand Lahou. The financing is backed by the French export credit agency Bpifrance Assurance Export. The financing package has been structured by Standard Chartered in its roles as global coordinator and structuring bank, social loan coordinator, bookrunner and mandated lead arranger.
EXIM Board approves Cameroon and Brazil Projects
(Global Trading Magazine, Dallas, 14 July 2022) The Export-Import Bank of the United States (EXIM) Board of Directors yesterday unanimously approved two transactions that will support U.S. exports to Cameroon and Brazil. Together, the two projects total more than $279 million, $74m for construction equipment in Cameroon and related goods and a guarantee for a $205.5 million loan from Citibank to Embraer S.A. in Brazil to support the export of U.S. manufactured aircraft engines and related components. Utilizing the production facilities of three U.S. exporters, General Electric, Honeywell and Pratt & Whitney, the transaction is expected to support approximately 1,200 U.S. jobs across the aerospace supply chain in North Carolina, Ohio, Arizona and Alabama. Since 1992, EXIM has generated more than $9 billion for the U.S. Treasury for repayment of overall U.S. debt.
SACE supports Brazilian steelmaker CSN
(BNAmericas, Santiago, 12 July 2022) Brazilian steelmaker CSN has secured a credit facility worth US$375mn with Italian export credit agency SACE as part of the expansion plan for mining arm CSN Mineração. The funds will be used to buy equipment from Italian firms. The credit facility involves a pool of banks led by BNP Paribas, with Crédit Agricole, Natixis Corporate & Investment Banking and Société Générale Milan Branch. The credit facility involves a pool of banks led by BNP Paribas, with Crédit Agricole, Natixis Corporate & Investment Banking and Société Générale Milan Branch.
Australian ECA to provide $300m for Mount Peake vanadium-titanium-iron project
(Australia Mining, Canberra, 11 July 2022) The Australian Government’s export credit agency has given a conditional Letter of Support for the provision of up to $300 million of debt funding for the construction of TNG’s flagship Mount Peake vanadium-titanium-iron project in the Northern Territory. Export Finance Australia is administering the Australian Government’s $2 billion Critical Minerals Facility, which has been established to assist in funding critical minerals projects. Mount Peake is one of 15 Australian critical minerals projects identified by the Australian Government in its Resources Technology and Critical Minerals Processing: National Manufacturing Priority Road Map.
Norwegian ECA to provide €400m in guarantees and loans toward €1.6bn Arctic battery gigafactory
(Global Construction, London, 1 July 2022) Norwegian battery-maker Freyr expects the plant to be one of the biggest and most efficient in Europe, with 50% lower capital spending per GWh of capacity and more than 200% higher production per employee than conventional lithium-ion facilities. The Giga Arctic project, which will be Freyr’s first, was announced on Wednesday by Jan Christian Vestre, Norway’s minister for trade and industry.
French ECA role in Polish nuclear expansion
(R and R Life, Manchester, 3 July 2022) Following French/Polish agreement in October 2021 to build 4 to 6 nucelear reactors, the French government has clearly stated its willingness to consider different ways to provide support, which is expected by the Polish side. Electricite de France (EDF) and the French government are open to discussions with the Polish government about who and what type of funding will be provided. EFF VP V. Ramany pointed out that France has a number of institutions that support such programs. “In debt financing, we have strong export credit insurance. This in turn helps in attracting banks to borrow for such projects. With regard to debt, we have, for example, the Public Development Bank SFIL, which can refinance debt at a relatively low cost.” Poland generates most of its electricity from coal and was the only European Union member nation not to commit to climate neutrality by 2050 when the bloc set the target in 2019. But under rising pressure from the EU and with carbon emission costs surging, Warsaw is encouraging more investment in low emission sources.
