(Ukraine Business News, Kyiv, 26 August 2024) The State Property Fund of Ukraine (SPFU) is actively seeking opportunities to expand export insurance instruments to cover war risks for privatization objects, said the head of SPFU, Vitaliy Koval. The SPFU is also appealing to international insurance companies with a proposal to expand export insurance instruments and involve them in covering war risks. This will help demonstrate to international insurers such as Czech EGAP, Japanese JICA, export credit agencies from Germany (Euler Hermes), France (Bpifrance Assurance Export), Italy (SACE), British (UK Export Finance), and Swedish (EKN) the presence of real demand for such services and will contribute to the activation of their work in Ukraine,” said Koval.
Newsletter
EXIM Board approves landmark $1.6 billion solar energy and water project in rural Angola
(Smart Water Magazine, Madrid, 29 August 2024) The Board of Directors of the Export-Import Bank of the United States (EXIM) approved a historic $1.6 billion direct loan to support the construction of 65 solar photovoltaic energy mini-grids with energy storage facilities that will power water collection, treatment, and purification systems in four southern provinces in Angola. The project will increase access to electricity and potable drinking water in several provinces in Angola that previously had little access and will promote improved health, education, and social wellbeing. The transaction, involving ING Capital, Sun Africa, and Omatapalo is estimated to support 3,100 U.S. jobs.
Canada’s EDC ‘nursing losses’ after lending $1bn to Thames Water
(Guardian, London, 20 August 2024) Canada’s state-backed export credit agency is reportedly nursing steep losses after lending debt-ridden Thames Water as much as a billion Canadian dollars. The British utility, which has said it could run out of cash by next June, received five loans from Export Development Canada (EDC) between 2018 and 2022 after the Canadian pension fund Omers had invested. The total value of the loans was between C$750m and C$1.45bn (between £422m and £820m), EDC said, while declining to give an exact figure. EDC sold the loans at a deep discount in recent weeks, according to the Financial Times, which cited unnamed investors.
The Role of Export Finance in Global Shipping’s Sustainable Growth
(Hellenic Shipping News, Cyprus, 12 August 2024) From mitigating risks associated with financing large-scale maritime projects to promoting sustainability and compliance, export finance plays a pivotal role in the shipping industry. Shipping moves 11 billion tons of goods each year, amounting to 1.5 tons per person worldwide, underscoring its indispensable role in international trade and economic development. Therefore, export finance strengthens the financial backbone that facilitates global trade operations. Investments in modernizing fleet technologies can lead to significant reductions in emissions, operational costs, and improved competitiveness on a global scale. While the global shipping industry represents a critical component of international trade, its operations have significant negative impacts on the environment, ranging from emissions to disturbances in marine ecosystems. In fact, even though maritime shipping is the most carbon-efficient method of transporting goods, it still accounts for 3% of all CO2 emissions worldwide. To achieve massive measurable impact in the shipping industry, strategic initiatives focusing on sustainable technologies and innovative financing solutions are paramount. Export finance [could act] as a key enabler by providing the necessary funding and financial instruments to support these large-scale retrofitting projects.
Out With the Old, Slow With the New
(International Institute for Sustainable Development, Winnipeg, 27 August 2024) Countries are underdelivering on fossil-to-clean energy finance pledge. This report analyzes the progress made by Clean Energy Transition Partnership (CETP) signatories on shifting international public finance away from fossil fuels and into clean energy. It finds that although significant progress has been made on cutting finance for fossil fuels, signatories are not increasing renewable investment at the same scale. At the United Nations Climate Change Conference (COP) in November 2021, 39 countries and public finance institutions signed the Clean Energy Transition Partnership (CETP), a joint commitment to end international public finance for fossil fuels by the end of 2022 and prioritize international public finance for clean energy. To realize the CETP’s transformative potential, new policies are needed to boost clean energy financing. All high-income signatories need to review and update their policies! The Financial Times notes that a group of more than 30 countries cut public funding for fossil fuel projects overseas by up to $15bn last year, a report has found, although the US has continued to pour billions into oil and gas finance.
Cesce backs green loan for Iberdrola renewable expansion
(Global Trade Review, London, 5 August 2024) Spain’s export credit agency Cesce has agreed to cover a €500mn green syndicated loan for Iberdrola, backing its renewable expansion plans globally. The 15-year facility will help fund solar photovoltaic, wind and battery projects in the US, Italy and Australia. The total renewable capacity financed will reach 897MW and is expected to be operational between 2025 and 2026,” Iberdrola says. The facility furthers the Spanish energy company’s goal of diversifying its financing pool and brings its overall volume of export credit agency (ECA)-covered loans to a total of €2.5bn, it says. Last year, Norway’s ECA guaranteed a €500mn loan from Citi for a wind farm off the UK coast.
Arab oil and gas sector attracted investments worth $406bn over 22 years
(Arab News, Jeddah, 7 August 2024) RIYADH: Arab nations have attracted $406 billion in investments from 356 foreign and regional companies in the oil and gas sector over the past 22 years, according to recent data from the Arab Investment and Export Credit Guarantee Corp., also known as Dhaman. During this period, which spans from January 2003 to May 2024, the region has seen the execution of 610 projects. The US has emerged as the leading investor, with 85 projects representing approximately 14% of the total. In terms of investment costs, Russia has taken the lead, contributing $61.5 billion, which constitutes about 15.2% of the total investment. The Middle East remains the largest holder of proven oil reserves globally. As of 2023, it accounts for approximately 55.5% of the world’s known oil reserves, according to the global statistics platform Statista. However, the region’s share has declined from nearly 63% in 1960 to less than 56% by 2020. Future projections indicate a continued decline in proven oil reserves in the Arab region. In other news Saudi Arabia is investing in a gigantic Red Sea tourism alternative to oil, with a $3.8bn loan raised by the Saudi government-owned Red Sea Development Company. Due for completion in 2030, the so-called ‘giga-project’ will spread across 22 of the 90 islands that form an archipelago off Saudi Arabia’s west coast, as well as inland, and offer 50 hotels with 8,000 hotel rooms. The first ECA green loan in Saudi Arabia was a $258m loan last year that German credit insurer Euler Hermes structured alongside Crédit Agricole CIB and HSBC. The proceeds were for the Ministry of Finance to acquire 842 buses for the new Riyadh public transport network from Daimler’s bus subsidiary in Germany. Another ECA loan covers the purchase of 50 electric vertical take-off and landing (eVTOL) jets from Lilium GmbH under a Saudi Export Import Bank export credit insurance policy supporting Saudi non-oil trade.
UKEF to finance Cambodia’s infra for exports
(Khmer Times, Phnom Penh, 7 August 2024) The UK Export Finance (UKEF), a United Kingdom government ministerial department and the nation’s export credit agency, Tuesday expressed the willingness to finance Cambodia’s infrastructure projects and public services to attract investment from the British. The UKEF delegation was on a three-day mission from August 5-7 to explore opportunities for strengthening cooperation under the export finance framework in Cambodia. The Head of UKEF appreciated the efforts of the working groups which led to the development of all sectors across the country, especially the public infrastructure sector, a key to support the socio-economic development of Cambodia. “As part of the International Development Strategy, the UK Government is committed to supporting Cambodia’s socio-economic development by promoting investment in infrastructure and public services.”
Canada’s EDC nursing steep losses from billions loaned to Thames Water
(Water Briefing, London, 10 August 2024) Canada’s state-backed export credit agency is reportedly nursing steep losses after lending debt-ridden Thames Water as much as a billion Canadian dollars. The British utility, which has said it could run out of cash by next June, received five loans from Export Development Canada (EDC) between 2018 and 2022 after the Canadian pension fund Omers had invested. The total value of the loans was between C$750m and C$1.45bn (between £422m and £820m), EDC said, while declining to give an exact figure. EDC sold the loans at a deep discount in recent weeks, according to the Financial Times, which cited unnamed investors. EDC declined to comment on whether it had lost money. A spokesperson said: “EDC has been carefully following the recent challenges encountered by the utility and with the regulator’s recent determination and Omers’ decision to write down its stake, we are assessing the best course of action to manage our loan exposure with the company.
Spanish ECA supports Siemens Gamesa $1.3 bln guarantee package
(Reuters, Madrid, 15 July 2024) Spanish ECA Cesce has moved to support Siemens Energy’s (ENR1n.DE) wind turbine division, Siemens Gamesa, as part of a 1.2 billion euro ($1.31 billion) guarantee facility. The Spanish state’s backstop will be up to 600 million euros, or 50% of the package to support wind projects, and will be deployed via Cesce. Six banks also support the guarantee facility. Siemens Energy recently announced an overhaul of its struggling wind division, which was affected by major quality issues at its newer onshore wind turbine platforms. Last year the German government agreed to support Siemens Energy with guarantees worth 7.5 billion euros as part of a deal with other stakeholders.
