ECA Watch Newsletter

What's New March 2021

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today!

Questions? Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Nearly 450 Organizations Call on Biden Administration to End Public Finance for Fossil Fuels
  • 250 organizations caution banks and ECAs against financing East African Crude Oil Pipeline
  • China Exim’s energy lending nosedives, Beijing weighs ban on foreign coal financing
  • ECA funding for critical mineral and rare earth projects
  • ECAs and the future of hydrogen finance
  • ECAs, the Kachi Lithium Brine project and environmental concerns
  • UK Undermines Own Claim to Climate Leadership By Failing to End Oil and Gas Licensing in the North Sea
  • SACE guaranteed 86 mln euro Greensill loan to collapsing Gupta steel arm
  • Swedish ECA under pressure to break ties with Belarus
  • EXIM: The Fox Is Watching the Henhouse: Green Energy Edition
  • What Investments Is The UAE Planning To Make In Israel?
  • Man Sentenced for Role in Scheme to Defraud EXIM
  • Hungarian Armed Forces Get EUR 349 Million ECA support
  • Our public finance institutions are fuelling climate change
  • JBIC injects liquidity into Japan Airlines
  • Does China subsidize export credit to reinforce its geopolitical aspirations?
  • Flash: ECA financed Mozambique LNG sector braces for delays amid escalating violence

Nearly 450 Organizations Call on Biden Administration to End Public Finance for Fossil Fuels

(Oil Change International, Washington, 18 MArch 2021) In a newly released letter, nearly 450 organizations called on the Biden Administration to immediately end all U.S. public financing for fossil fuels, including natural gas. Signatories to the letter span six continents and include major U.S. civil society organizations, international groups, and organizations in the Global South concerned about the impacts of U.S. support for overseas fossil fuel projects. U.S. public finance for overseas fossil fuel projects averaged more than $4 billion (USD) annually over the past decade, according to Oil Change International data, at times exceeding $10 billion USD in a single year. This finance was distributed primarily through the U.S. Export-Import Bank and the U.S. Development Finance Corporation, formerly the U.S. Overseas Private Investment Corporation. Dozens of groups from many countries where the U.S. has financed fossil fuel projects — including Brazil, Colombia, El Salvador, Georgia, Ghana, India, Nigeria, Papua New Guinea, South Africa, Turkey, Uruguay, and elsewhere — have signed onto the letter urging the Biden Administration to make good on it’s commitment to end high-carbon finance.

http://priceofoil.org/2021/03/18/letter-biden-public-finance-fossil-fuels/


250 organizations caution banks and ECAs against financing East African Crude Oil Pipeline

(Construction and Civil Engineering News, Nairobi, 2 March 2021) More than 260 organisations have urged banks not to finance the $3.5 billion project, saying the project could lead to the loss of community land and livelihoods, environmental destruction and surging carbon emissions. Nearly a third of the pipeline will run through the basin of Africa’s largest lake, Lake Victoria – which more than 40 million people depend on for water and food production. It will also cross more than 200 rivers, run through thousands of farms and cut through vital wildlife reserves. The pipeline is expected to cost around $3.5 billion. Of this, about $2.5 billion will be borrowed from banks and other financiers. It is not yet clear which banks intend to participate, although the three banks acting as financial advisors are likely to join and act as lead arrangers. The pipeline – proposed by French oil company Total and the China National Offshore Oil Corporation – will fuel climate change by transporting oil that will generate over 34 million tons of carbon emissions each year. The letter to the three banks acting as financial advisors for the project – Standard Bank, Sumitomo Mitsui Banking Corporation, and Industrial and Commercial Bank of China – and 22 banks that have recently provided finance to Total and CNOOC, comes as speculation mounts that a Final Investment Decision (FID), which would commit Total to mobilize capital for the project, is imminent. UKEF has apparently ruled out public subsidy for the pipeline Signatories to the open letter included Friends of the Earth International, 350.org, the Catholic Agency for Overseas Development, Reclaim Finance, Sierra Club, Global Witness, the IUCN National Committee of the Netherlands, BankTrack, Africa Institute for Energy Governance (AFIEGO) and Inclusive Development International (IDI).

https://cceonlinenews.com/2021/03/02/banks-cautioned-against-financing-east-afri...


China Exim’s energy lending nosedives, Beijing weighs ban on foreign coal financing

(Global Trade Review, London, 3 March 2021) Overseas energy financing from Chinese policy banks plummeted last year in the wake of the Covid-19 pandemic, a new report says, as pressure builds on Beijing to drop its zest for coal projects in developing countries. According to data from Boston University’s Global Development Policy Center (GDPC), funding from the China Development Bank (CDB) and the Export-Import Bank of China (Cexim) plunged by roughly 43% in 2020. Having funded around US$8.1bn in loans for energy projects in developing countries in 2019, the pair’s outlay tightened to US$4.6bn last year. More than half of the two banks’ combined overseas energy funding went to a single project in Nigeria, with Cexim providing a US$2.5bn loan to the Ajaokuta, Kaduna, Kano (AKK) gas pipeline project in Nigeria. The total figure was comprised of eight loans to countries across Africa and Asia, as well as one deal for a coal-powered district heating system in Serbia. A host of countries which have previously received sizeable loans from the CDB and Cexim, including Pakistan and Zambia, were forced to apply for debt relief from China in the wake of the devastating effects of Covid-19. Pressure has been growing internationally for export credit agencies (ECAs) such as Cexim to withdraw support for coal-fired power plants, and there are suggestions that Beijing could seek to ban development financing for overseas coal projects. UK Export Finance (UKEF) announced in December that it would end support for fossil fuel projects, joining the likes of France and Sweden in ruling out backing for deals in the oil, gas and coal space. Last year, the Japanese government said it would tighten lending criteria for export credit support for coal-fired power plants. Critics have, however, condemned “loopholes” in Japan’s commitment, noting that the country is still open to funding overseas coal plants that use highly efficient technology, or any project it has already agreed to back. A report from US-based research organisation Oil Change International has previously shown that when it comes to providing export credits for fossil fuels, Japan is the main offender – with China in second place. one example of the steps being taken by the Chinese government, in December, the environment ministry backed a green guidance paper suggesting that the most polluting BRI projects should be put on a negative list. In 2020, the commodity was still very much on the agenda, with the pair providing a combined US$474mn to two coal projects in Pakistan and Serbia.

https://www.gtreview.com/news/asia/china-exims-energy-lending-nosedives-beijing-...


ECA funding for critical mineral and rare earth projects

(Lexology, London, 15 March 2021) As demand for critical minerals and rare earths soars due to their importance to future facing technologies and 2050 net zero pledges, 2021 is poised to be a breakout year for critical mineral and rare earth projects in Australia, provided project proponents can source funding and navigate the key bankability issues. Unique to critical mineral projects are the sector’s geopolitical issues and an emerging focus on securing supply chain resilience as a matter of national sovereignty, particularly in the technology, healthcare and defence-related equipment manufacturing sectors. In Australia, the government has mandated Export Finance Australia (EFA), its export credit agency, to support critical mineral projects. For example, EFA’s support to a greenfield critical minerals project in New South Wales last year enabled the project proponents to escalate engagement with prospective strategic investors. Funding may also be available from foreign governments as demonstrated by Lynas Rare Earth Limited’s announcement on 22 January 2021 that it had entered into a co-funding agreement with the United States Department of Defense to build a commercial light rare earths separation plant in Texas, United States. The US funding is derived from the Department of Defense’s Title III, Defense Production Art program.

https://www.lexology.com/library/detail.aspx?g=aebfc267-564d-429c-8002-18e197e92...


ECAs and the future of hydrogen finance

(Lexology, London, 8 March 2021) Hydrogen can be put to uses such as fuel cells for remote and emergency power or in the vehicle and transport sector, replacement feedstock for ammonia production, as reticulated natural gas replacement or to supply electricity markets. Global decarbonisation commitments are driving Australia's hydrogen industry together with bank mandates to move away from fossil fuels. Hydrogen offers the prospect of capitalising on Australia's renewable power resources of wind, solar and hydro to produce green hydrogen. The key inputs to a green hydrogen project are power and water. Ensuring a reliable and cost-effective power supply and access to water rights will be important. As will access rights to key infrastructure (ie gas pipelines, road, rail or ports). Early stage hydrogen projects are unlikely to be project financed without government and industry support. Establishing a new industry requires a long-term policy framework, innovation and collaboration of all industry participants – governments, regulators, industry, industry bodies, investors and financiers. Australia has the essential requirements for a reliable and efficient green hydrogen industry – reliable and affordable renewable power plus recent experience developing the LNG and solar energy markets. Following the lead of the large-scale LNG projects, funding from export credit agencies is also a likely option. ECAs such as The Japan Bank for International Co-operation, The Export-Import Bank of China, and Export Finance Australia are governmental agencies that provide finance for export related transactions. ECAs must fund in accordance with their government imposed mandate. Securing domestic energy supply or key commodities is often included in mandates and large, export oriented Asia Pacific LNG projects have benefited from ECA funding.

https://www.lexology.com/library/detail.aspx?g=60665de8-5780-4899-83b3-b9606704f...


ECAs, the Kachi Lithium Brine project and environmental concerns

(Proactive Investors, London, 16 March 2021) Australia's Lake Resources NL has refreshed its Argentine Kachi Lithium Brine Project prefeasibility with a net present value now at US$1.58 billion and is also assessing the potential increase of lithium carbonate production at the project as demand continues to rise from battery makers for high purity lithium carbonate. The Kachi project remains highly scalable and the company is working towards an expansion, which would make it globally significant in terms of high purity lithium carbonate production, and well-positioned to supply the expected deficit in battery-grade product over the next few years. Lake Resources NL's Kachi project is a large lease holding of 70,000 hectares with an expandable resource of 4.4 million tonnes of lithium carbonate equivalent of which only 20% is used for 25 years of production at 25,500 tonnes per annum. Joint financial advisors have been appointed to structure and arrange project finance, with a focus on export credit agencies for the development of the Kachi Project. While the race is on to find a steady source of lithium, a key component in rechargeable electric car batteries. the Guardian has recently noted that the lithium 'white gold' rush threatens environmental damage on an industrial scale.

https://ca.proactiveinvestors.com/companies/news/944046/lake-resources-refreshes...


UK Undermines Own Claim to Climate Leadership By Failing to End Oil and Gas Licensing in the North Sea

(Oil Change International, Washington, 24 March 2021) The United Kingdom announced a “North Sea deal to protect jobs in the green energy transition” that campaigners say fails to meet the UK’s responsibility to lead in a phase-out of domestic oil and gas extraction. In a positive step, the announcement includes further details on the earlier announced commitment to end public finance for fossil fuels, which will apply immediately. Yet, on the domestic oil and gas production side, the government’s plan falls far short of the immediate end to new licensing called for by climate groups. “Making future licensing rounds conditional on vaguely defined Climate Compatibility Checkpoints is a subterfuge aimed at concealing a simple fact: handing out new licenses for oil and gas is not compatible with limiting warming to 1.5°C. Wealthy oil and gas producing countries such as the UK have a responsibility to lead in phasing out extraction, a reality that the government ignored today. Other countries such as Denmark, New Zealand, and France have already ended oil and gas licensing rounds, and the UK is now a laggard in this respect."

http://priceofoil.org/2021/03/24/uk-undermine-its-own-claim-to-climate-leadershi...


SACE guaranteed 86 mln euro Greensill loan to collapsing Gupta steel arm

(Reuters, London, 18 March 2021) Italy's official ECA SACE guaranteed an 86 million euros ($102 million) loan from Greensill Bank, part of the collapsing Greensill Capital group, to one of Indian-British steel magnate Sanjeev Gupta’s firms, according to accounts filed with the Italian corporate registry in recent weeks. Gupta's firm, Liberty Magona SRL, secured a guarantee from SACE for the loan under measures to help companies navigate the coronavirus crisis, according to Liberty Magona’s accounts for a period from Jan. 1, 2019 to June 30, 2020, which include information on material post-yearend events. German financial regulator BaFin has filed a criminal complaint against the Bremen-based Greensill Bank. Greensill Capital group filed for bankruptcy protection in Britain and Australia this month, citing a $5 billion exposure to Gupta’s GFG Alliance. It said Gupta’s firms had begun to default on its obligations. GFG Alliance employs 35,000 people across 30 countries, according to its website. In Britain, the opposition Labour Party has said the government should consider nationalising the company if it cannot secure the financial backing it is trying to attract. Italy is not the only country to have provided guarantees to Gupta’s firms. The Scottish government gave a 575 million pound guarantee to the group in 2016, Reuters reported in 2019. The Times reports that the Steel magnate and financier Greensill ‘broke borrowing rules’ as Gupta ploted to buy back assets on the cheap, exploiting a Covid-19 state guarantee scheme for struggling companies to extract £400 million of taxpayer-backed loans — eight times the limit. British ministers have rejected a request from mining magnate Sanjeev Gupta for a 170 million pound ($234.36 million) emergency loan to prevent his group, GFG Alliance, from collapsing.

https://www.reuters.com/article/italy-gfgalliance-guarantee/italy-guaranteed-86-...


Swedish ECA under pressure to break ties with Belarus

(Intellinews, Berlin, 15 March 2021) International multinational firms including Swedish ECA EKN are coming under increased pressure to break business ties with Belarus as opposition leaders apply a "name and shame" campaign as part of their struggle to oust incumbent President Alexander Lukashenko. Belarus has been wracked by mass demonstrations since last year’s disputed August 9 presidential elections. German heavy engineering firm Siemens and Norwegian agricultural company Yara have found themselves in the firing line in recent months, as both have significant business with Belarus. The Eurasian Development Bank (EDB), which was set up as a joint venture between Russia, Kazakhstan and Belarus to invest into things like infrastructure, funded its credit line by raising financing from the German state-owned banks KfW IPEX Bank and Landesbank Hessen-Thüringen (Helaba), while the loan was insured by the state export credit agency of Sweden (EKN). Meanwhile, the Russian State Duma has ratified a protocol to amend the Belarusian-Russian intergovernmental agreement on state export credit to the Belarusian government to build a nuclear power plant.

https://www.intellinews.com/multinational-firms-under-pressure-to-break-ties-wit...


EXIM: The Fox Is Watching the Henhouse: Green Energy Edition

(National Review, Washington, 9 March 2021) Veronique de Rugy of the conservative leaning National Review notes that "asking Ex-Im officials to identify steps through which the United States can promote ending international financing of carbon-intensive fossil fuel-based energy is like asking the fox to guard the henhouse." She adds: "Indeed, Ex-Im itself has long been, and continues to be, knee-deep in the business of extending financing in the international and domestic oil and gas sector... Some $12 billion of this exposure - 26% of the bank’s portfolio - subsidizes the oil and gas industry...For example the Mexican state-owned oil company Petróleos Mexicanos, which has been hammered for years by mismanagement, underinvestment and low oil prices. For at least 15 years until 2017, the bank [EXIM] had more loans outstanding to Pemex than to any other borrower..."  Continuing she wonders: "let’s see if they make progress during multilateral negotiations with other export-credit agencies to agree to end their subsidies together. I won’t hold my breath, of course, since Ex-Im and other export-credit agencies around the world are enslaved to the special interests they support and they will drag their feet as long as they can. In the end, I predict that all we are likely to get from this [Biden Executive Order] is bad climate policies such as subsidies to well-connected green companies (see the 1705 loan program) and measures to destroy the domestic oil and gas industries while Ex-Im will continue to subsidize corrupt PEMEX."

https://www.nationalreview.com/corner/the-fox-is-watching-the-henhouse-green-ene...


What Investments Is The UAE Planning To Make In Israel?

(Albawaba, Amman, 15 March 2021) Last Thursday, the UAE announced a $10 billion fund that is allocated for Emirati investments in Israel, the latest country with which the UAE has signed a normalization agreement last September. Last December, the Etihad Credit Insurance (ECI) and the UAE's Federal export credit company, and the Israel Foreign Trade Risks Insurance Corporation (ASHR’A) have agreed to jointly create a strategic partnership in supporting exports, trade, and investment.

https://www.albawaba.com/business/what-investments-uae-planning-make-israel


Man Sentenced for Role in Scheme to Defraud EXIM

(PR Newswire, Chicago, 15 March 2021) As a result of the efforts of the Office of Inspector General (OIG) for the Export-Import Bank of the United States (EXIM), in coordination with the Miami-Dade State Attorney's Office, a Florida business owner was sentenced to 36 months' probation and ordered to pay over $140,000 for his role in a scheme to defraud EXIM. EXIM paid $142,472 for the fraudulent claim to Romel Ramon Duran-Martinez (Duran), 59, owner of Miami-based Deoca Manufacturing Co. (Deoca), although Deoca had received full payment for the transaction. To conceal this fraud, Duran directed individuals to lie and otherwise deal with EXIM in bad faith, which delayed the discovery of the fraud.  Because Duran previously paid approximately $39,000.00 to EXIM in administrative repayments prior to the Court's ruling, the Court further ordered Duran to pay $110,970.66 in restitution to EXIM, $29,029.34 for investigative costs, as well as a $603 Special Assessment Fee.  

https://www.prnewswire.com/news-releases/man-sentenced-for-role-in-scheme-to-def...


Hungarian Armed Forces Get EUR 349 Million ECA support

Hungary Today, Budapest, 17 March 2021) Norway is providing Hungary with 348.5 million euros of financing with a view to strengthening Hungary’s combat defence capabilities through Export Credit Norway (ECN) and the Norwegian Export Credit Guarantee Agency (GIEK), the Ministry of Finance said on Wednesday. The credit is tied to the 410 million euro NASAMS contract concluded by Hungary and Norwegian supplier Kongsberg Defense and Aerospace AS last November.

https://hungarytoday.hu/armed-forces-349-million-developments-norway-export-cred...


Our public finance institutions are fuelling climate change

(Times Live, Johannesburg, 22 March 2021) In Southern Africa, environmental racism has put poor, black, indigenous, and people of colour communities in the path of polluters and the climate crisis. This past Wednesday, civil society organisations hosted a virtual event to brief parliamentarians about the link between climate change and our public finance institutions (PFIs), specifically the Development Bank of Southern Africa (DBSA), the Industrial Development Corporation (IDC) and the Export Credit Insurance Corporation (ECIC). One of the largest recipients of SA public financing is the Mozambique Liquid Natural Gas (LNG) Project, led by Total, in Cabo Delgado, Mozambique. The ECIC and DBSA are providing a total of $920m (R13.5bn) plus an undisclosed amount from the IDC. This financing is fuelling an industry that has displaced over 550 families from their homes, fishing areas and farmland, and left them without livelihoods and reliant on food aid. There is no evidence that the $50bn (R736bn) gas industry currently being developed will benefit Mozambicans: though the country has been a large fossil energy producer for years, only 30% of the population has electricity access. Regional violence is deeply interlinked with the gas industry, with human rights violations committed by insurgents, the Mozambican military and SA mercenaries. PFIs' attitude is seemingly ‘business as usual’. Worse, the ECIC refused to make their EIA available, and ignored a request for public participation in their decision to finance this devastating project.

https://www.timeslive.co.za/ideas/2021-03-22-opinion--our-public-finance-institu...


JBIC injects liquidity into Japan Airlines

(Global Trade Review, London, 17 March 2021) Amid broader turbulence in the aviation sector, Asian public sector institutions rolled out hundreds of millions of dollars’ worth of support to airlines in the region last week. In one deal, the Japan Bank for International Cooperation (JBIC) inked a ¥25.3bn (~US$232mn) guarantee agreement covering four private financial institutions for the principal and interest of their loans to Japan Airlines (JAL). In doing so, the Japanese ECA is helping JAL obtain financing from Mizuho, MUFG, SMBC and Chiba Bank for the import of two aircraft from Airbus in France.

https://www.gtreview.com/news/asia/jbic-and-adb-inject-liquidity-into-asia-pacif...


Does China subsidize export credit to reinforce its geopolitical aspirations?

(EXIM and Chatham House, 2019 and 2020) The U.S. 2019 approved reauthorization of EXIM included a goal of reserving not less than 20% of the agency’s total financing authority (i.e. $27 billion out of a total of $135 billion) "to support the extension of loans, guarantees, and insurance, at rates and on terms and other conditions, to the extent practicable, that are fully competitive with rates, terms, and other conditions established by the People’s Republic of China". The objective apparently being To directly neutralize export subsidies for competing goods and services financed by official export credit, tied aid, or blended financing provided by China or by other covered countries, i.e. to out-subsidize China's ECAs. In an October 2020 Chatham House conference speakers challenged the position that the Belt and Road Initiative (BRI) is a geopolitical strategy to ensnare countries in unsustainable debt and allow China undue influence. They noted that while the BRI is frequently portrayed as a geopolitical strategy that ensnares countries in unsustainable debt and allows China undue influence, the available evidence challenges this position, claiming that economic factors are the primary driver of current BRI projects. "China’s development financing system is too fragmented and poorly coordinated to pursue detailed strategic objectives; and developing-country governments and their associated political and economic interests determine the nature of BRI projects on their territory." Lee Jones of Queen Mary University of London added that "If 'debt-trap diplomacy' means that China is deliberately luring developing countries into unsustainable debt so that it can grab key loan-funded infrastructure like ports for geo-strategic purposes, then it is a total myth. There is simply no evidence that this has happened in any country." "Debunking the Myth of 'Debt-Trap Diplomacy': How Recipient Countries Shape China's Belt and Road Initiative" was released in August by Chatham House.




Flash: ECA financed Mozambique LNG sector braces for delays amid escalating violence

(Global Trade Review, London, 31 March 2021) French energy major Total has been forced to suspend operations at its liquified natural gas (LNG) project in northern Mozambique for the second time this year, after a fresh attack by insurgents which killed dozens of local and foreign citizens, with as many as 60 still missing. The Financial Times reports the ongoing risk of violence has led Total to reduce its workforce on the LNG project at the nearby Afungi site “to a strict minimum”. The suspension marks yet another setback for Total’s project, which had only recently started to resume operations following a decision to evacuate workers from the site in January due to heightened security risks. Such delays throw into doubt the slated 2024 production date of the project, and come less than a year after the company signed a bumper financing package worth nearly US$15bn with a cluster of commercial banks, export credit agencies (ECAs) and the African Development Bank (AfDB). ECA Watch member Friends of the Earth International reported in our June 2020 issue on how transnational corporate gas extraction in Mozambique was fuelling human rights abuses, poverty, corruption, violence and social injustice. In our June 2020 What's New we also noted UKEF's intent to commit some US$1 billion to the project. Bloomberg has reported on two additional LNG projects: the $4.7 billion Coral FLNG Project by ENI and ExxonMobil, and the $30 billion Rovuma LNG Project by ExxonMobil, ENI, and the China National Petroleum Corporation. A spokesperson for the Japanese ECA, the Japan Bank for International Cooperation, tells GTR that it is “closely monitoring” the security situation in Mozambique, in cooperation with the stakeholders of the project, including the operator, the sponsors and an external security consultant.

https://www.gtreview.com/news/africa/mozambique-lng-sector-braces-for-delays-ami...


What's New February 2021

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • US to end int'l financing for fossil fuel projects - but how?
  • USDA farm export credits to go now to climate change
  • China's Global Energy Finance Database
  • U.K. Firms Get Pandemic Support From Agency With Great War Roots
  • COVID-19 State Aid - The EU opens the door to additional support
  • UKEF may back Brazilian oil and gas project despite promised end to fossil fuel funding
  • Groundbreaking research reveals the financiers of the coal industry
  • Is new thinking needed on export finance regulation?
  • ICC rolls out ambitious new export finance sustainability initiative
  • ECAs and the once elusive SME
  • Mota-Engil Begins Work on ECA supported $1.8 Billion Nigeria-Niger Railway
  • Airbus cautious on 2021 hoping for ECA backed backed cash flow
  • Africa's COVID-19 vaccine financing gap opens opportunities for China, Russia

US to end int'l financing for fossil fuel projects - but how?

(Reuters, Barcelona, 27 January 2021) The United States will produce a plan to end international financing for fossil fuel projects, its special climate envoy John Kerry said Wednesday, as senior British and U.N. officials urged donor nations to meet a flagship climate finance promise. Speaking at an online panel organised by the World Economic Forum, Kerry said the new administration of U.S. President Joe Biden would draft a plan for U.S. climate finance, without giving further details. He noted the United States had spent $265 billion cleaning up three major hurricanes that hit the country in 2017, while another storm in 2020 racked up a bill of $55 billion. Yet “in stark contrast, we don’t fully fund” a commitment by wealthy governments, enshrined in the Paris Agreement, to raise $100 billion a year globally to help poor, vulnerable nations adopt clean energy and adapt to extreme weather and rising seas, he said.  Friends of the Earth noted that in the past two years the U.S. Export-Import Bank (EXIM) approved over $5 billion for fossil fuel projects abroad.

https://www.reuters.com/article/us-climate-change-finance-usa-trfn-idUSKBN29W2V1


USDA farm export credits to go now to climate change

(Yahoo News, Washington, 31 January 2021) The Trump administration used the USDA Commodity Credit Corp. to bail out farmers suffering from its trade wars. Now the Biden administration wants to deploy a $30 billion pot of money in the Agriculture Department to tackle climate change, support restaurants and kickstart other programs without waiting for Congress. Long hidden in obscurity as a Depression-era financial institution, the Commodity Credit Corp. is used to fund certain conservation programs, foreign market development, export credit and commodity purchases. The billions paid out to farmers far eclipsed the massive 2008 auto bailout, and accounted for 40 percent of farm income in 2020.

https://www.yahoo.com/news/30b-fund-sitting-inside-usda-115016514.html


China's Global Energy Finance Database

(Global Development Policy Center, Boston, 12 February 2021) In 2020, China’s two development banks with global operations — the China Development Bank (CDB) and the Export-Import Bank of China (CHEXIM) — recorded $4.6 billion of overseas energy sector finance. This represents a decrease of 43%, from the $8.1 billion in lending to foreign countries recorded in 2019. The China’s Global Energy Finance Database is an interactive data project that exhibits financing for global energy projects by China’s two global policy banks—the China Development Bank (CDB) and the Export-Import Bank of China (CHEXIM).

http://www.bu.edu/cgef/#/intro


U.K. Firms Get Pandemic Support From Agency With Great War Roots

(Bloomberg, London, 26 February 2021) U.K. companies pummeled for nearly a year by pandemic shutdowns are turning to a century-old government agency with roots in the country’s drive to rebuild trade after the Great War to help them raise funds. Subsea 7 Ltd. on Thursday sealed a $500 million loan guaranteed by UKEF. The oilfield services company, and airlines British Airways Plc and EasyJet Plc, are among 5 firms that have secured a combined 6.3 billion pounds ($8.93 billion) of funding with UKEF support since the pandemic began. Alongside massive fiscal stimulus, export financing aid is another device in the government’s toolbox to help companies ride out a slump that caused the British economy to shrink about 10% in 2020.

https://www.bloomberg.com/news/articles/2021-02-26/u-k-firms-get-pandemic-suppor...


COVID-19 State Aid - The EU opens the door to additional support

(Byrne Wallace, Dublin, 3 February 2021) The European Commission has broadened the scope of its COVID-19 State aid Temporary Framework Communication by more than doubling the level of support that Member States can provide to many individual businesses suffering as a result of COVID-19. It has also extended the period of validity for the Temporary Framework by a further 6 months to the end of December 2021.This is the fifth (and almost certainly the most significant) amendment to the Temporary Framework since it was introduced by the Commission in spring 2020 in response to the COVID-19 outbreak. The purpose of the Temporary Framework is to loosen the State aid rules applicable to Member States in light of COVID-19 in providing financial assistance to their economies, by imposing fewer restrictions on the aid amounts and eligible costs that can be provided to businesses. Support can be provided through a number of methods under the Temporary Framework including direct grants, State guarantees, subsidised public loans, safeguards for banks lending to SMEs, and short-term export credit insurance. Every EU Member State has notified at least 4 measures, with a total of over 325 notifications having been made in the less than 10 months the Temporary Framework has existed. Sixty-five of these measures have had budgets of over €1 billion, including three French measures mobilising €300 billion of liquidity support for companies, a £50 billion UK “umbrella” scheme, a €44 billion Italian recapitalisation scheme to support large companies, and a German fund of up to €500 billion of liquidity and capital support.

https://byrnewallace.com/news-and-recent-work/publications/covid-19-state-aid-th...


UKEF may back Brazilian oil and gas project despite promised end to fossil fuel funding

(The Telegraph, London, 6 February 2021) The Government promised last year to end taxpayer support for fossil fuel projects overseas. The UK is poised to back a major Brazilian offshore oil project that will contribute the same emissions as 800,000 cars annually, despite its promise to end funding for overseas oil and gas projects.

https://www.telegraph.co.uk/environment/2021/02/06/major-brazilian-oil-gas-proje...


Groundbreaking research reveals the financiers of the coal industry

(Urgewald & Reclaim Finance, Berlin, 24 February 2021) urgewald, Reclaim Finance, Rainforest Action Network, 350.org Japan and 25 further NGO partners have published groundbreaking research on the financiers and investors behind the global coal industry. It was found that in January 2021, 4,488 institutional investors held investments totaling USD 1.03 trillion in companies operating along the thermal coal value chain. The top commercial bank lenders to the coal industry are Mizuho, SMBC, MUFG, Citigroup and Barclays. Scandinavian banks poured $67 billion into the fossil fuel industry since Paris. The Rainforest Action Network notes that while "welcom(ing) President Biden’s Executive Order to end public financing for fossil fuels abroad, the new administration must also address the role of Wall Street as a huge driver of climate pollution around the world - driving us ever deeper into a climate crisis".
 

https://www.banktrack.org/article/groundbreaking_research_reveals_the_financiers...


Is new thinking needed on export finance regulation?

(TFX News, New York, 3 February 2021) The OECD Consensus has a long history but it’s still the only game in town. With the International Working Group now in stasis, is that a problem, or is it going to focus minds on reform? The ‘Arrangement on Officially Supported Export Credits’ started out in 1978 building on the export credit ‘Consensus’ among a number of OECD countries in 1976 as a way of getting the world’s major exporting nations, in those days, the OECD countries, to agree on a level playing field for fair competition and, in the process, to rein in the huge export finance subsidies which were beginning to seem unsustainable even to the richest of them. The biggest pressures have been coming from outside the Consensus’s OECD core. Countries once indisputably not rich (e.g. China, India, Brazil, Russia and South Africa) moved from being exporters of primary goods and importers of capital goods to the opposite. Not all, but the size of the emerging exporting nations (China the biggest of them all) meant that their non-adherence to the OECD’s Consensus club created a need for a new forum. The International Working Group on Export Credits (IWG), was established in 2012 with the aim of trying to bridge the gap between them and the Consensus Participants. In November 2020, IWG technical groups were formally suspended for a year by 11 of the 18 countries (including the EU) due to the [Covid] freeze on IWG technical work. A new Secretary General has neither been so far agreed nor announced. The Arrangement has long had Sector Understandings, mini-‘Gentlemen’s Agreements’. At the moment, they cover aircraft, ships and trains plus energy and the environment (nuclear power, renewable energy, climate change mitigation and adaptation, and water projects, and coal-fired electricity). Time for new thinking is ahead. Like coral reefs, [10,000 years in development, quickly destroyed], the Arrangement is delicate, subject to abuse, but very valuable in parts to the world economy.

https://www.txfnews.com/News/Article/7118/Consensus-still-standing-Or-is-new-thi...


ICC rolls out ambitious new export finance sustainability initiative

(TXF News, London, 1 December 2020) The International Chamber of Commerce Global Export Finance Committee’s Sustainability Working Group (ICC-SWG) is out to market with an ambitious initiative: to engage the export finance community in a discourse on how the industry aims to fulfil the UN’s sustainable development agenda, in a bid to develop both ECA policy and product.  The ICC-SWG, comprising 16 of the most active ECA banks (including a handful of global heads) and the Rockefeller Foundation - has invited industry players to have their say on how banks and ECAs can better align their SDGs within the export finance solution. A white paper, convened by the ICC and expected to be published in June 2021, will review the state of sustainable finance across the export finance landscape and propose both product and policy recommendations aimed at boosting the flow of export credits towards greater sustainable activity.

https://www.txfnews.com/News/Article/7092/Exclusive-ICC-rolls-out-ambitious-new-...


ECAs and the once elusive SME

(TFX News, New York, 25 February 2021) What has Covid meant for ECAs and their ability to attract smaller companies? How are ECAs responding to the needs of these new clients and how are they broadening their financing partners? Once the pandemic imperative is over, will those smaller businesses be back for more? TXF talks to four ECAs [Sweden, Denmark, UK & USA] about their experience with SMEs – and finds out things may have changed for good. It’s long been on the wish list of export credit agencies to engage a broader range of corporates to provide export support. For whatever reason ... diversifying that ECA client base to help smaller companies’ exports has been a ‘nice to do’, and a bit of a struggle, rather than an imperative – until last year when the SME no longer seemed elusive. Towards the end of the summer, government attentions turned towards developing an SME product range for post-pandemic support for recovery. In July, UKEF launched its Export Development Guarantee programme which focused on larger corporates (for instance, Ford took up a £500 million facility focused on capital investment to support export growth). More recently, in December, however, UKEF announced its General Export Facility (GEF) for SMEs and corporates. [Is this a move to reduce the critique of ECAs as subsidizers of transnational corporations - the banks of Boeing? Or a desperate measure to stave off the Covid collapse of small business jobs?]

https://www.txfnews.com/News/Article/7129/ECAs-and-the-once-elusive-SME-Hunting-...


Mota-Engil Begins Work on ECA supported $1.8 Billion Nigeria-Niger Railway

(Bloomberg, New York, 9 February 2021) Mota-Engil’s local unit is a joint venture with Shoreline Group, an independent Nigerian oil producer. The nearly $2 billion of financing required for the rail line will be sourced from Europe, Credit Suisse Group AG, Africa Finance Corp. and German state bank KfW are finalizing loans from export credit agencies, multilateral institutions and commercial banks. Mota-Engil SGPS SA, a Portuguese construction company, started work on the $1.8 billion railway line that will connect Nigeria with neighbor Niger. Critics have questioned the commercial viability of the Kano-Maradi line, particularly the priority given to a link to Niger at a time when government revenue is scarce. Niger, with a GDP about one-fortieth the size of its larger neighbor, exported goods worth an estimated $1.54 billion last year, according to the International Monetary Fund. While the Mota-Engil group is based in Portugal, the company was originally founded in Angola in 1946. The firm has previously built or refurbished railways in countries including Malawi, Mozambique and Tanzania, and recently announced other construction contracts in Ghana, South Africa and the Ivory Coast. Mota-Engil agreed in November to sell a minority stake in the company to state-controlled China Communications Construction Corp.

https://www.bloomberg.com/news/articles/2021-02-09/mota-engil-starts-building-1-...


Airbus cautious on 2021 hoping for ECA backed backed cash flow

(Bloomberg, New York, 18 February 2021) Airbus SE generated 4.9 billion euros ($5.9 billion) in cash during the fourth quarter, while issuing cautious guidance on the pace of its recovery from aviation’s worst-ever crisis. Jet handovers are forecast to stay at 2020’s depressed levels this year, even as Airbus plans to ramp up production in the second half. In the meantime, airlines’ shaky finances will ripple back to Airbus. The planemaker’s cash flows will feel the impact from lower pre-delivery payments from customers, as well as a greater requirement to help finance plane purchases. The company may be required to finance 1 billion euros or more for its customers, though it hopes export credit programs will help to fill the gap.

https://www.bloomberg.com/news/articles/2021-02-18/airbus-cautious-on-2021-after...


Africa's COVID-19 vaccine financing gap opens opportunities for China, Russia

(S&P Global, New York, 4 February 2021) Since Feb. 1, Britain and other high-income countries such as Israel and the United Arab Emirates have continued their vaccination programs apace, while even relatively rich African countries such as South Africa continue to lag. This stark divide in access to vaccines to combat the pandemic underscores structural problems in the developing world, and in Africa in particular, where there are significant barriers to financing the procurement of life-saving inoculations. Shortfalls in both funding and supply are also creating opportunities for China and Russia to export their vaccines to Africa as they seek to strengthen commercial and political relations with the continent. Multilateral development financial institutions such as the World Bank and the African Development Bank will be crucial to bridging the financing gap. National export credit agencies that offer government backed-financing for companies' international activities will also need a boost. China and Russia see 'real opportunity'... and "are likely to fill the gaps in Africa by providing vaccines at favorable pricing or as donations, said Pangea-Risk's Besseling. "They are seeing a real opportunity to extend their commercial, diplomatic, political and geopolitical security relations with the African continent," he said.

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlin...


What's New January 2021

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • Atradius DSB launches 'Green Label' to promote greater environmentally responsible export transactions
  • EDC is undermining Canada’s climate commitments. Will Ottawa step in and take action?
  • NGOs Strongly Oppose JBIC Decision to Support Vietnamiese Coal-fired Power Generation Project
  • Asian ECAs sustain coal’s threat to world climate
  • EU greenlights more short-term ECA state aid for virus-hit firms and agriculture
  • Turkish ECA finances US$70 million Kenyan armored car deal
  • Departing EXIM chief urges Biden team to counter Chinese lending dominance
  • Australian ECA may finance buyer for Pacific mobile network Digicel to block China
  • British Airways & EasyJet: UK Export Finance's new form of state aid
  • US Exim and Greensill back domestic LNG exporter
  • UAE - India to enhance trade, economic cooperation
  • U.S. ExIm prepares possible seizure of Bulgarian satellite over loan nonpayment
  • Ukraine aims to develop cooperation with OECD ECAs

Atradius DSB launches 'Green Label' to promote greater environmentally responsible export transactions

(Both ENDS, Amsterdam, 29 January 2021). Atradius Dutch State Business (ADSB) recently launched the so-called “Green Label”. This is a methodology to determine whether a transaction can be qualified as a green transaction. Such green transactions are eligible for export credit insurance with specific, more attractive terms and conditions:

  • Cover for up to 95% – in stead of the usual 70-90% – of the total value of project finance transactions;
  • Flexible acceptance criteria for small green transactions up to €5 million;
  •  Flexible definition of export, allowing cover for domestic transactions that have export potential in the long run.

The green label is also meant to be a tool to determine the share of green transactions in ADSB’s overall portfolio. Starting from 2019, ADSB annually reports on this.

Aligning itself with the International Finance Corporation (IFC) and the Netherlands Finance Corporation for Developing Countries (FMO), ADSB reviews whether transactions contribute to:
    a) reduction of climate change (mitigation); or
    b) adaptation to the impacts of climate change; or
    c) reduction of ecological footprint beyond local legal requirements.
The Green Label distinguishes 11 categories of ‘green’ business, which in their turn have a total of 36 sub-categories. In an Annex to the document an overview – Green List – is provided of various types of business within each of these categories.

Depending on the intensity of the contributions of transactions to the environment or climate, they are identified as dark green, middle green or light green, but that does not affect their eligibility for the specific favourable terms and conditions for green transactions. The current Green Label will be valid for one year (to December 2021) and evaluated thereafter to ensure it incorporates further insights and developments.

It is observed that the Green Label aligns well with the EU taxonomy. However it is also noted that there can be differences between the two since the EU taxonomy is valid only for transactions within the EU, while ECA backed transactions are usually located outside the EU.

Both ENDS notes that this distinction between standards within the EU being different from the standards that ECAs may observe abroad is problematic, particularly where it relates to values and concerns that are universal. This is clearly the case where we need to address issues such as climate change, environmental standards or human rights.

Overall Both ENDS welcomes the Green Label as an effort to open up for further dialogue on the green qualifications of specific transactions. Many CSOs might question - for example - whether hydro dams for electricity, biomass, refurbishing thermal power plants or industrial farming should qualify for the label green, or instead a brown label.

Equally, we hope ADSB and other ECAs will prioritize effective instruments to put an end to support for transactions with obvious negative environmental and climate impacts, such as  transactions supporting the exploration and production chains of all fossil fuels. Following recent announcements by the UK government and the new Biden administration in the USA to phase out public support for fossil fuels, it becomes high time for all ECAs to follow suit.

https://atradiusdutchstatebusiness.nl/nl/documenten/the_green_label_eng.pdf


EDC is undermining Canada’s climate commitments. Will Ottawa step in and take action?

(Above Ground, Ottawa, 13 January 2021) Between 2016 and 2018, Canada provided more public finance for fossil fuels than any G20 country other than China, with Export Development Canada (EDC) providing on average $13.8 billion in support to oil and gas companies each year. Last month more than 50 civil society organizations joined us in calling for Ottawa to cut off this enormous flow of public financial support to an industry fuelling the climate crisis. Our letter to the trade minister urges the government to immediately end EDC’s support for all fossil fuels and to scale up its support for sustainable, renewable and equitable climate solutions that respect human rights. Find out more about EDC’s support to fossil fuel producers in our fact sheet.

https://aboveground.ngo/edc-fossil-finance-will-ottawa-step-in/


NGOs Strongly Oppose JBIC Decision to Support Vietnamiese Coal-fired Power Generation Project

(FOE Japan, Tokyo, 29 January 2021) JBIC, a public financial institution, announced it's decision on December 28 to provide project financing of up to US $636 million to the Vung Ang 2 coal-fired power generation project in Vietnam. The private-sector financial institutions participating in the cofinancing are believed to include Sumitomo Mitsui Banking Corporation, MUFG Bank, Mizuho Bank and Sumitomo Mitsui Trust Bank. Vung Ang 2 has been criticized internationally, and many problems with the project have been pointed out. The signatory NGOs strongly oppose JBIC's decision to support the project and its failure to be accountable or  address many criticisms, which include the project’s inconsistency with climate change measures and inadequate environmental impact assessments. The project was originally to be sponsored by Hong Kong-based CLP Holdings together with Mitsubishi Corporation, but CLP announced its coal phase-out policy in December 2019 and decided to withdraw from the project. Standard Chartered Bank of the UK, OCBC Bank and DBS Bank of Singapore, all of which had been considering financing, also withdrew from the project. General Electric, which was expected to participate in the project announced on September 21 2020 that it would “exit the new build coal power market”. In addition to JIBC, the Export-Import Bank of Korea (Kexim) and a group of private lenders, will provide nearly US$1.8bn in loans for the project.

https://www.foejapan.org/en/aid/jbic02/va/201229.html


Asian ECAs sustain coal’s threat to world climate

(New Statesman, London, 25 January 2021) The sun may be setting on coal-fired power in Europe and North America, but its persistence in Asia threatens global climate targets. Crucial to that darkening outlook is the growing difficulty that coal-fired power plants face in raising finance. Private sector banks, under pressure from investors and activists, have been gradually pulling back from lending to coal projects (although campaigners complain that their fossil fuel exclusion policies are often not tight enough). Instead, developers had looked to concessional finance from the Chinese, Japanese and South Korean governments, whose export credit agencies were happy to lend at attractive rates to projects that used turbines and other equipment supplied by their industrial giants. “[Approximately] 90 per cent of all coal-fired power plants built in Asia in the last five years were underpinned by export credit agency finance,” says Tim Buckley, director of energy finance studies at the Institute for Energy Economics and Financial Analysis (IEEFA). All three of those countries are shutting their chequebooks, under pressure to act on climate change.  But the latest IEA data comes with a sting. The Paris-based agency, part of the OECD, forecasts a rebound in coal demand of 2.6% in 2021 as the global economy recovers. Global Energy Monitor data also shows a small increase in the coal power pipeline last year, as Chinese regional apparatchiks, chasing economic growth targets, waved through new project applications. 

https://www.newstatesman.com/business/sustainability/2021/01/how-coal-s-uneven-r...


EU greenlights more short-term ECA state aid for virus-hit firms and agriculture

(Reuters, Brussels, 28 January 2021) Reuters reports that EU competition regulators on 28 January extended looser state aid rules for virus-hit companies to the end of 2021, making it easier for EU governments to pump money into economies battered by the pandemic. This includes extension to the end of 2021 of the temporary removal of all countries from the list of “marketable risk” countries under its short-term export-credit insurance guidance because of the continued lack of sufficient private capacity to cover export risks.

https://www.reuters.com/article/health-coronavirus-stateaid/update-1-more-state-...


Turkish ECA finances US$70 million Kenyan armored car deal

(Defense News, Virginia, 29 January 2021) Kenya’s military has ordered 118 four-wheel drive personnel carriers from Turkish armored vehicles manufacturer Katmerciler. Kenya Defence Forces spokesperson Col. Zipporah Kioko told local press that the Ministry of Defence is finalizing the deal for the mine-resistant, ambush-protected Hizir vehicles through Turkey’s Export Credit Agency. Kenya’s military will primarily deploy the Hizir vehicles for counterterror operations against the al-Shabab militant group in Somolia. Reports have emerged of growing disquiet among Kenyan military ranks over the planned acquisition from the Turkish firm amid safety concerns. The vehicles, said to have fallen short of User Specifications Requirements (USR) set by the Kenya Army, were approved in a single sourcing deal by the Defense Procurement Board. Two other firms, one from South African and another from North America, were locked out of the multi-billion shillings deal, despite having more internationally accepted military vehicles.

https://www.defensenews.com/land/2021/01/27/kenya-orders-118-armored-vehicles-fr...


Departing EXIM chief urges Biden team to counter Chinese lending dominance

(Reuters, Washington, 18 January 2021) The head of the Export-Import Bank of the United States (EXIM) on Monday urged the Biden administration to keep pushing to neutralize Chinese export subsidies and help U.S. companies compete, building on gains made under Donald Trump. Chairman Kimberly Reed, a political appointee who will leave her job on Wednesday after 20 months in office, told Reuters she was confident that restoration of the bank’s full lending powers had strengthened the competitiveness of U.S. companies and helped level the playing field, but more work was needed.

https://www.reuters.com/article/us-usa-trade-exim/departing-exim-chief-urges-bid...


Australian ECA may finance buyer for Pacific mobile network Digicel to block China

(Sydney Morning Herald, Sydney, 14 January 2021) China Mobile is firming as the most likely Chinese company to make a play for telecommunications assets in the Pacific in a move that would trouble Australia’s national security agencies. Digicel, owned by Irish billionaire Denis O’Brien, is under financial pressure and looking to offload its mobile phone networks across the region including in Papua New Guinea, Fiji, Tonga and Samoa. The Morrison government is considering using the nation’s export credit agency, Export Finance Australia, to provide support to other private bidders looking to acquire the assets. This could be in the form of subsidised loans or loan guarantees. Australian security agencies are concerned about the prospect of a Chinese telco gaining a foothold in the region and potentially spying on our close neighbours, government sources said. O'Brien is reportedly asking for more than $2 billion for the assets, but industry sources put the value at less than $1 billion.

https://www.smh.com.au/politics/federal/australia-may-finance-buyer-for-pacific-...


British Airways & EasyJet: UK Export Finance's new form of state aid

(Centre for Aviation, Sydney, 31 December 2020) On 31-Dec-2020 IAG announced that its subsidiary British Airways had received commitments for a GBP 2 billion five-year term loan facility underwritten by a syndicate of banks. On 8-Jan-2021 easyJet announced a GBP1.4 billion five year facility, also underwritten by a syndicate of banks. The unusual feature in both loans is that they are partially guaranteed by UK Export Finance (UKEF), an arm of the UK government. Such loan guarantees to UK exporters mark a strategic shift for the UK's export credit agency towards more direct support. In the past, its support has typically been indirect, through guarantees provided to foreign buyers of UK-produced goods and services, with direct support to UK exporters generally focused on smaller businesses. UKEF has long supported the UK aerospace sector's exports through credit guarantees and loans to foreign airlines buying from UK exporters.

https://centreforaviation.com/analysis/reports/british-airways--easyjet-uk-expor...


US Exim and Greensill back domestic LNG exporter

(Global Trade Review, London, 13 January 2021) The Export-Import Bank of the United States has signed off on a new supply chain finance loan guarantee that marks its first support of a domestic liquified natural gas (LNG) exporter. As part of the deal, US Exim will provide a 90% guarantee to cover a US$50mn SCF facility from Greensill Capital to Houston-based Freeport LNG Marketing. Freeport LNG’s chairman and CEO Michael Smith says the deal will provide the company with “essential working capital” and support its global export operations.

https://www.gtreview.com/news/americas/us-exim-and-greensill-back-lng-exporter-w...


UAE - India to enhance trade, economic cooperation

(MENAFN, Amman, 30 December 2020) Etihad Credit Insurance (ECI), the UAE Federal export credit company, has partnered with ECGC Limited (ECGC), the premier export credit agency of India, to explore and bolster the trade and economic cooperation between the UAE and India. India's ministry of external affairs in February 2020 reported that current trade between the two nations is valued at around $60 billion, making the UAE India's third-largest trading partner and second-largest export destination in 2018 to 2019.

https://menafn.com/1101360474/UAE-India-to-enhance-trade-economic-cooperation


U.S. ExIm prepares possible seizure of Bulgarian satellite over loan nonpayment

(SpaceIntel Report, Potomac, 11 January 2021) The U.S. Export-Import Bank is preparing a possible seizure of the Bulgaria Sat 1 telecommunications satellite, in orbit since 2017, following the owner’s inability to reimburse an Ex-Im loan of $150.5 million. The bank, which is the U.S. export-credit agency, has put out requests for candidates who would advise the bank on how to “maximize recovery on its loan by finding a strategic buyer of the company assets,” the bank said.

https://www.spaceintelreport.com/u-s-ex-im-bank-prepares-possible-seizure-of-bul...


Ukraine aims to develop cooperation with OECD ECAs

(Ukrinform, Kyiv, 27 January 2021) Ukraine intends to accede to the Arrangement on Officially Supported Export Credits and intensify cooperation in the export credit field; to cooperate in the area of management of state-owned enterprises and privatization; strengthen responsible business practices in the energy sector and develop the public procurement system. The state budget of Ukraine for 2021 provides for financing of the Export Credit Agency in the amount of up to UAH 1.8 billion (US$63.7 million) in preparation for the negotiation of a free-trade agreement with the Egypt, Jordan, Indonesia and China,

https://www.ukrinform.net/rubric-economy/3178850-ukraine-aims-to-develop-coopera...


What's New December 2020

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • UKEF to stop funding overseas fossil fuel projects?
  • EU Commission Approves €625 Million Italian Scheme to Counter COVID-19 Impacts
  • EXIM is helping American workers and keeping China at bay
  • Unions oppose EXIM relaxation of domestic content rules
  • Korea's Eximbank provides $500 mil. for Mozambique gas project
  • Too Many Eggs in the Dragon’s Basket? Part Two: Diversifying Australia’s Export Base
  • UK widens access to export loans as post-Brexit transition ends
  • UKEF concerned over ‘largely unused’ export credit facility
  • Ugandans question ECA supported EACOP pipeline vs energy transition
  • UAE, Israel export credit agencies sign trade cooperation deal
  • Ukrainian-UK Defense Cooperation: Will UKEF Have Kyiv’s Back?
  • Massive SACE loan from Italy to Egypt
  • Shipping lenders face carbon cutting shortfalls despite Poseidon Principles
  • Swedish ECAs propose $2-billion credit for aviation development in Vietnam
  • Norwegian Air secures court protection over €4.1bn debts
  • Hungarian & Russian ECAs sign $1.17 billion Egyptian rail deal
  • Russian Export Forum to focus on COVID-driven incentives for businesses
  • China, Japan, and S. Korea see $205 billion renewable energy market in Southeast Asia
  • Crisis response: a paradigm shift for ECAs

UKEF to stop funding overseas fossil fuel projects?

(Sydney Morning Herald, London, 12 December 2020) British taxpayers will stop subsidising overseas fossil fuel projects under a pledge by Prime Minister Boris Johnson which opens a new front in the push for more urgent international action on climate change. Johnson will announce the "world-leading policy" while opening a virtual climate summit on Sunday morning. The plan is yet to be finalised and a start date has not been settled, but Johnson will tell world leaders he will stop the government's export credit agency from providing finance or other support for the extraction, production, transportation and refining of crude oil, natural gas or thermal coal overseas. Green groups have accused the British government of "rank hypocrisy" for talking tough on climate change while still directing billions of pounds towards polluting projects abroad. In June, it promised nearly £900 million ($1.58 billion) in loans and bank guarantees to help build a huge liquefied natural gas project in Mozambique which will open up the country's vast gas reserves. Environmental campaigners are challenging the deal in court on the basis it is incompatible with the UK's Paris climate accord commitments. A third runway at London's Heathrow Airport was blocked by the courts in February because the mega infrastructure project did not take the UK's climate obligations into account. UN secretary-general António Guterres is pushing for all development finance institutions to halt fossil fuel financing ahead of a crucial international climate summit in Glasgow next November. [Meanwhile, as recently as December 2nd, UKEF revealed in response to a parliamentary question that it had been approached regarding finance for Uganda's EACOP pipeline, but that no decision has yet been made. The French, German and Italian ECAs are also reported to have been approached ($). While a welcome advance, we must remember that these measures have been promised for years with little progress to-date.]

https://www.smh.com.au/world/europe/uk-to-stop-funding-overseas-fossil-fuel-proj...


EU Commission Approves €625 Million Italian Scheme to Counter COVID-19 Impacts

(Schengenvisainfonews, Prishtina, 7 December 2020) Operators together and travel agencies in Italy affected by the Coronavirus outbreak will receive financial support to get out of the current economic crisis, as the European Union Commission has approved €625 million Italian scheme, under the State aid Temporary Framework. The European Commission concluded that the scheme notified by Italy completes the conditions set out by the Temporary Framework, significantly that aid will not surpass €800,000 per company; and it will be allocated by June 30, 2021. The Temporary Framework provides several types of aid, which can be granted by the Member States. The framework was amended, on April 3, May 8, June 29 as well as October 13, 2020, and includes, among other financial mechanisms, public short-term export credit insurance for all international countries, without the need for the Member State in question to show that the respective country is “non-marketable”.

https://www.schengenvisainfo.com/news/eu-commission-approves-e625-million-italia...


EXIM is helping American workers and keeping China at bay

(The Hill, Washington, 17 December 2020) [An example of political influences on EXIM vs the OECD's purely economic free market level playing field.] One year ago, under President Trump’s leadership, Congress came together across party lines to re-authorize EXIM, our nation’s export credit agency. As our great economic resurgence continues and American companies battle the setbacks caused by COVID-19, that decision looks even better. American companies and their workers face an unlevel playing field, where countries like China stack the deck. As just one part of the Chinese Communist Party’s multi-faceted Belt and Road initiative to achieve global dominance, its government offers vast amounts of export finance to incentivize foreign companies to purchase Chinese goods and services. The country’s export financing is estimated to equal 90% of what is provided by all G7 countries combined. While the number of export credit agencies like EXIM has grown to 115 around the world, up from 85 only four years ago, China’s expansive export and trade-related activity far exceeds that of other countries. The reauthorization law charges the agency with a goal of reserving no less than 20% of its total financing authority — $27 billion out of $135 billion — for support of U.S. exports to neutralize export credit or other subsidies provided by China or other covered countries.

https://thehill.com/blogs/congress-blog/politics/530609-one-year-after-reauthori...


Unions oppose EXIM relaxation of domestic content rules

(Market Screener, Annecy, 8 December 2020) EXIM, the U.S. export credit agency that is supposed to support U.S. jobs by financing exports of U.S.-made goods, is instead considering extreme proposals to destroy requirements that tie financing to domestic content rules. Under the guise of competition from China, the Bank posted a public notice just before Thanksgiving soliciting comments on weakening its current domestic content requirements. Proposals to weaken the current content rules would allow U.S. exporters to offshore more American jobs to other countries and receive Ex-Im financing to do so.

https://www.marketscreener.com/news/latest/International-Association-of-Machinis...


Korea's Eximbank provides $500 mil. for Mozambique gas project

(Korea Times, Seoul, 14 December 2020) The Export-Import Bank of Korea (Eximbank) said Monday it will provide $500 million (545 billion won) in financial support for a major integrated liquefied natural gas (LNG) project in Mozambique. The project financing by the state-run lender is aimed at helping Korean companies successfully complete the construction of two LNG plants. The total value of the project is about $23.5 billion. When the project is finished, about 12.9 million tons of LNG will be produced from the plants annually. This amounts to 23 percent of Korea's annual LNG imports. "We expect the project to create 1,300 new jobs annually and promote foreign exchange earnings," an official from the lender said. The Korean construction and equipment manufacturers taking part in the project plan to invest $550 million in the five-year project. Eximbank also said it expects two Korean shipbuilders ― Hyundai Heavy Industries and Samsung Heavy Industries ― to win orders for 17 LNG ships, though contract negotiations are still underway. This is not the first Korean Exim's project in Mozambique. A group of eight export credit agencies have joined the project across the globe. They include Eximbank, the Export-Import Bank of the United States, the Japan Bank for International Cooperation and SACE from Italy. The project has exposed workers to Covid-19 and created a natural resource curse in Mozambique where export credit agencies have supported hugh MNC oil and gas developments.

http://www.koreatimes.co.kr/www/biz/2020/12/175_300864.html


Too Many Eggs in the Dragon’s Basket? Part Two: Diversifying Australia’s Export Base

(Future Directions, Nedlands, 15 December 2020) Since the publication of Part One of this paper, further deterioration in the Australia-China political and trading relationships has occurred, with the media offering useful commentary and analysis of the escalation, including as it relates to exports of wine, barley and coal. Despite serious current issues, Australia’s export reliance on China as a key destination for commodity exports will continue, but concurrent initiatives to broaden and grow the export base have to be pursued. Productivity benefits accrue from exporting, but the primary explanation is economically simplistic, in that countries promote their exports to cover the payments made for imports. Australia needs to continuously import an array of products and services that are not produced domestically but which are vital to sustaining the economy and preserving a high standard of living.

https://www.futuredirections.org.au/publication/too-many-eggs-in-the-dragons-bas...


UK widens access to export loans as post-Brexit transition ends

(Reuters, London, 7 December 2020) Britain’s government said on Monday it would offer a wider range of loan guarantees to promote exports as part of a drive to boost overseas sales following the country’s departure from the European Union, its biggest foreign market. Lenders will receive a state guarantee for 80% of the money they lend to companies to support exports, up to 25 million pounds per business. The guarantees will be available to support working capital and other general costs, and will not be tied to specific export contracts, which was usually the case under previous schemes underwritten by export credit body UK Export Finance.

https://www.reuters.com/article/britain-economy-exports/uk-widens-access-to-expo...


UKEF concerned over ‘largely unused’ export credit facility

(The NEWS, Islamabad, 11 December 2020) The UK on Thursday asked Pakistan to expedite utilisation of 1.5 billion pounds of annual UKEF credit line by facilitating UK businesses investing in and exporting to the South Asian economy. British High Commissioner to Pakistan Christian Turner said £1.5 billion of credit line for export credit facility remains largely unused. “British companies are keen to invest in [sic - invest in, not "sell to"] the energy sector of Pakistan especially in off-grid solutions and distribution, generation system,” Turner said. The UK credit financing for Pakistan has tripled in the last two years. In September, UK Export Finance, a state-owned credit financing agency, increased its annual funding limit to £1.5 billion from £1 billion earlier for British businesses to promote trade with and investment in Pakistan.

https://www.thenews.com.pk/print/756710-uk-concerned-over-largely-unused-export-...


Ugandans question ECA supported EACOP pipeline vs energy transition

(Daily Monitor, Kampala, 30 November 2020) In the wake of Covid-19, there is need for governments to ensure a just recovery and transition to low-carbon energy systems for economic and social recovery. Clearly, the government continues to fail Ugandans in-terms of current fossil fuels development plans. Government is still making progress towards development of its 6.5 billion barrels of oil, with plans to build a $3.5b East African Crude Oil Pipeline (EACOP). However, as government seeks to turn oil reserves into tomorrow’s fuels, oil development will certainly further lock us onto the path to irreversible climate change and failure to meet Paris Climate Agreement, goals. Moreover, many oil projects continue to rob locals of their land and livelihoods in violation of their land and other property rights. These are degrading the environment and climate in equal measure,  hence fuelling a triple crisis. Mr. Cyrus Kabaale, Uganda

https://www.monitor.co.ug/uganda/oped/letters/use-oil-to-cause-energy-transition...


UAE, Israel export credit agencies sign trade cooperation deal

(Gulf News, Dubai, 13 December 2020) Etihad Credit Insurance (ECI), the UAE Federal export credit company, and The Israel Foreign Trade Risks Insurance Corporation (ASHR’A) have agreed to jointly create a strategic cooperation in supporting exports, trade and investment; explore new business opportunities; and forge collaborations in technical assistance, training, and capacity building in both countries. The annual exchange of trade between the UAE and Israel in a wide spectrum of industries is expected to reach $4 billion (Dh14.68 billion) a year. Under the US promoted UAE-Israel Abraham Accords, the first normalization of relations between an Arab country and Israel since that of Egypt in 1979 and Jordan in 1994, the UAE has abolished Federal Law No. 15 of 1972 regarding the Arab League Boycott of Israel and the penalties thereof. As there are no Emirati embassies in Israel document authentication for company and bank account setup will also be a challenge.

https://gulfnews.com/business/uae-israel-export-credit-agencies-sign-trade-coope...


Ukrainian-UK Defense Cooperation: Will UKEF Have Kyiv’s Back?

(Eurasia Daily Monitor, Washington, 15 December 2020) In October 2020 a funding pledge was made by the UK’s export credit agency in the amount of 1.25 billion pounds ($1.68 billion) for the construction of missile boats and new naval infrastructure in Ukraine. Missile boats and naval bases are critically important to Ukraine’s capacity to deter an enemy as well as respond in a crisis in the Black Sea and the Sea of Azov. These capabilities are crucial to Ukraine in this closed maritime theater considering Russia’s overwhelming superiority when it comes to anti-ship missiles. Moreover, London promised to send Royal Navy ships to the region in order to boost Ukraine’s ability to combat threats in the Black Sea.

https://jamestown.org/program/ukrainian-uk-defense-cooperation-will-london-have-...


Massive SACE loan from Italy to Egypt

(Middle East Eye, London, 11 December 2020) Government sources in Egypt familiar with economic and military cooperation with Italy have revealed that an agreement is imminent between the Egyptian government and the Italian Export Credit Agency (Sace), reported Al Araby Al Jadeed. The agreement would clear the way for Egypt to obtain a loan of more than 5bn euros ($6 bn), which would be financed by a number of Italian and European banks, the news website said. The loan would be disbursed in phases during the current and following fiscal years and used to finance half of the amount required in the Italian-Egyptian arms deal, worth about 11bn euros ($13.3 bn), according to the sources. The sources said that Egypt had previously purchased two Italian multipurpose frigates (FREMM) as part of the deal worth 1.2bn euros ($1.45bn), of which 500m  euros ($605m) were a loan from Italy to the Egyptian Ministry of Defence. The new loan would increase the interest rate by about five percent over the previous one. However, the sources refused to disclose the interest rate that had been agreed upon. Any new deal would impose significant economic burdens on Egypt for about seven years, with the Ministry of Defence paying the largest instalment of the value of these loans, according to the sources.

https://www.middleeasteye.net/news/israel-algeria-footballer-trip-fury-arab-pres...


Shipping lenders face carbon cutting shortfalls despite Poseidon Principles

(Reuters, London, 16 December 2020) Many of the world’s biggest lenders to shipping companies fell short of carbon-cutting targets last year in the first analysis of CO2 goals for the sector. Global shipping accounts for nearly 3% of the world’s CO2 emissions and the industry is under pressure to reduce those emissions and other pollution. About 90% of world trade is transported by sea. Last year, a group of leading banks signed up to environmental commitments known as the Poseidon Principles, whereby financiers take account of efforts to cut CO2 emissions when providing loans to shipping companies. In the first climate assessment report issued by the signatories, which includes emissions data collected from borrowers, just 3 of 15 financiers – Bpifrance Assurance Export, Export Credit Norway and ING – were aligned with IMO decarbonisation targets in 2019. Twenty banks jointly representing approximately USD 150 billion in shipping finance, have come together to commit to the Poseidon Principles, some of them ECAs.

https://gcaptain.com/shipping-lenders-fall-short-of-sectors-carbon-targets/


Swedish ECAs propose $2-billion credit for aviation development in Vietnam

(VnExpress International, Hanoi, 6 December 2020) Swedish financial institutions have proposed a commercial loan to develop aviation projects in Vietnam, including the Long Thanh International Airport. The Swedish Export Credit Agency and the state-owned Export Credit Corporation in Sweden have now proposed increasing the credit limit to $2 billion to cover upgrade projects and air traffic management expansion. To be eligible for the credit line, Vietnam will have to use 30% of the loan to purchase Swedish technologies and equipment. In addition to the Long Thanh and Tan Son Nhat airports, Vietnam plans to upgrade other airports. The country currently has 22 civilian airports. They served near 116 million passengers last year, up 12 percent from 2018.

https://e.vnexpress.net/news/business/economy/sweden-proposes-2-billion-credit-f...


Norwegian Air secures court protection over €4.1bn debts

(Irish Times, Dublin, 7 December 2020) Norwegian Air Shuttle secured a crucial lifeline on Monday when the High Court granted the embattled carrier and five Irish subsidiaries protection from creditors. Norwegian owes creditors, mainly aircraft lessors and banks, more than $5 billion (€4.1 billion) in total, while it faces running out of cash early next year. Its 140 aircraft are held by companies based in Ireland. US aircraft lessor Aviation Capital Group recently got a judgement in the English High Court for $6.3 million for rent due on Boeing 737s.  The Export Import Bank of the United States, which has given export credit guarantees to Boeing, is owed $46 million, while the carrier’s potential liability could run into the hundreds of millions, tied to ten 737s and three 787s.

https://www.irishtimes.com/business/transport-and-tourism/norwegian-air-secures-...


Hungarian & Russian ECAs sign $1.17 billion Egyptian rail deal

(TXF News, New York, 9 December 2020) Egyptian National Railways (ENR) raised the benchmark for big-ticket export finance collaboration at the end of 2019, after the state-owned company signed a €1 billion ($1.17 billion) dual ECA-backed buyer’s credit facility to back the procurement of 1,300 Transmashholding passenger coaches from the Russian supplier. The more than 15-year financing, which involved three countries and marked the largest project in ENR’s history to date, will be provided between Hungary's HEXIM, the Hungarian Export-Import Bank and the Hungarian Export Credit Insurance that are operating in an integrated manner as the ECA of Hungary, and Russia’s Roseximbank, and the Russian Agency for Export Credit and Investment Insurance (EXIAR).

https://www.txfnews.com/News/Article/7096/Shop-talk-HEXIM-A-one-stop-shop-kind-o...


Russian Export Forum to focus on COVID-driven incentives for businesses

(RT News, Moscow, 7 December 2020) On December 9, the 'Made in Russia’ International Export Forum will hold a roundtable on “Fine-tuning the export support framework: countering the downturn in global trade.” Russian and foreign experts are expected to focus on the current state of global trade, support measures as well as prospects for 2021. It will bring together experts from development institutions and export credit agencies, as well as specialized international organizations to discuss current trends in global trade and key support measures during the ongoing pandemic. The participants will also share their forecasts for the next year.

https://www.rt.com/sponsored-content/508911-made-in-russia-forum-trade/


China, Japan, and S. Korea see $205 billion renewable energy market in Southeast Asia

(Webwire, Tokyo, 15 December 2020) A report from Greenpeace Japan identifies a US$205 billion opportunity for [ECA] renewable energy finance in Southeast Asia in the next ten years – 2.6 times bigger than the coal market of the past decade. From 2009 to 2019, major public banks in China, Japan, and South Korea invested only USD $9.1 billion in solar and wind, but USD $78.9 billion in coal and gas, making them top public financiers of fossil fuels globally. But this started to shift in 2020, as did national climate commitments from these G3 countries. From 2021 to 2030, Southeast Asian demand for electricity will need invested capital worth USD $125.1 billion for solar energy, USD $48.1 billion for wind energy, and USD $32.6 billion for other renewable energy sources, the report found. Additionally, Southeast Asia’s emerging green bonds market is making an international shift away from fossil fuel finance (both public and private). The report provides a rare cross-region snapshot of public and private finance. Despite being an OECD member, China blends official aid and export credit numbers in public financial disclosures in violation of OECD-DAC criteria. This makes public money harder to track. Furthermore, private finance is not widely transparent among the three countries, and analysts rely on third-party data, which is by nature incomplete.

https://www.webwire.com/ViewPressRel.asp?aId=267899


Crisis response: a paradigm shift for ECAs

(Global Trade Review, London, 10 December 2020) When Covid-19 brought global trade to a near standstill, export credit agencies (ECA) stepped up by introducing or expanding cover for working capital programmes, rather than traditional project-led financing. But with the pandemic still raging and concerns over insolvency growing, do companies need to see a paradigm shift in export credit?

https://www.gtreview.com/supplements/gtr-insurance-2020/crisis-response-paradigm...


What's New November 2020

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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Public ECA money guarantees 'risky' fossil fuel projects: experts

(AFP, Paris 15 November 2020) Energy firms are undertaking financially risky natural gas extraction projects from the Arctic to Africa made feasible by government-backed loans and guarantees, jeopardising efforts to curb global warming, experts say. As pressure from the public and investors to green their portfolios grows, and the cost of renewable energy continues to fall, oil and gas majors are finding it harder to attract investment on new fossil fuel projects.  Eight export credit agencies awarded loans to French oil giant Total in July, when the company signed a US$14.9-billion financing agreement for a liquefied natural gas (LNG) project in Mozambique. The province where the sites are located, Cabo Delgado, has been grappling with a jihadist insurgency since 2017 that has killed more than 1,000 people. In a renewed effort to reduce climate obstacles and tackle other environmental issues, five African civil society groups have called on African governments to stop the acceptance of fossil fuel projects driven by European countries through their Export Credit Agencies (ECAs).

https://www.deccanherald.com/science-and-environment/public-money-guarantees-ris...


Western governments suspend talks on new ECA rules

(Reuters, Washington, 20 November 2020) Eleven of 18 governments trying to negotiate new export credit rules said on Thursday they were suspending technical talks because of widely divergent positions among members and troubles with transparency. But in a joint statement, the 11 Western governments including the United States, European Union and Japan said that they remain open to a high-level meeting in a year and to discussing proposals at the vice-ministerial level. The action halts eight years of talks launched in 2012 from a joint U.S.-China initiative to try to craft new international rules on the use of official export credit agencies, that would be followed by OECD countries as well as large emerging market countries including China, India and Brazil.

In 2019, China provided more than three times the amount of official medium- and long-term export credits than the next closest provider, according to the Ex-Im Bank's annual competitiveness report. The top 10 providers, in order, were: China ($33.5 billion), Italy ($11.1 billion), Germany ($10.5 billion), India ($7.0 billion), the United Kingdom ($6.6 billion), France ($6.2 billion), Korea ($5.8 billion), the United States ($5.3 billion), Finland ($4.1 billion), and Sweden ($4.0 billion).

https://www.thestar.com.my/business/business-news/2020/11/20/western-governments...


Only a fifth of climate finance goes to adaptation as share of loans grows

(Climate Home News, Kent, 6 November 2020) Donor countries mobilised $78.9 billion of climate aid in 2018, but developing nations are expected to pay back nearly three quarters of the money. Financial support to help the most vulnerable countries adapt to intensifying climate impacts continues to fall short compared with money spent to cut emissions, according to a report by donor countries. Analysis of the latest climate finance data by the OECD - representing 36 of the world’s most developed countries – found that only 21% of climate finance mobilised in 2018 aimed to help communities adapt to climate change vs more than two-thirds of the money still going to carbon-cutting efforts, with 9% identified as serving both goals. The OECD report analysed progress made by developed countries to meet a 2009 commitment to mobilise $100 billion a year in climate finance by 2020 to help developing countries green their economies and cope with climate impacts. The data included finance from bilateral and multilateral finance, climate-related finance officially supported by export credit agencies and private finance mobilised through public finance interventions, with the vast majority of the money coming from public finance, with private funding accounting for 18.5% of 2018's $78.9 billion. Oxfam’s Climate Finance Shadow Report 2020 offers an assessment of progress towards the $100bn goal.

https://www.climatechangenews.com/2020/11/06/oecd-one-fifth-climate-finance-goes...


International Chamber of Commerce urges G20 to increase ECA support to safeguard small corporations

(International Chamber of Commerce, Paris, 9 November 2020) An advisory group to the International Chamber of Commerce (ICC) has issued a call for G20 leaders to take action to avert the risk of widespread insolvencies amongst small- and medium-sized enterprises (SMEs) globally, due to the Covid-19 pandemic, urging them to make coordinated interventions to increase the availability of trade-related finance to SMEs. Trade finance underpins somewhere between 80 – 90% of global trade and acts as a vital source of working capital for many SMEs. Recent signals suggest that [private] supply of trade credit to SMEs and emerging markets is at significant risk in response to growing corporate, sovereign and currency risks. ICC has further outlined additional measures that could be implemented by G20 governments to prime the supply of trade financing globally – including a scaling of publicly backed credit guarantee schemes, regulatory interventions and export credit insurance to incentivize the provision of trade credit by commercial banks. As noted in our May 2020 What's New, the ICC has said that as much as US$5 trillion of trade credit will be needed to return trade volumes back to 2019 levels in the wake of the Covid-19 crisis in order to enable volumes and demand return to the global economy.

https://iccwbo.org/media-wall/news-speeches/g20-leverage-trade-finance-to-safegu...


Mapping the impacts of ECAs active in Africa

(Both Ends, Amsterdam, 11 November 2020) Many industrialised nations are switching to renewable energy at home. But while they commit to phasing out fossil fuel energy domestically, these commitments are abandoned outside their borders, where they continue to push dirty energy, thus contributing to climate change, human rights abuses and environmental destruction. This is happening in African countries, while they are already being hit particularly hard by the impacts of climate change. By supporting fossil fuel as well as large hydro dam-related energy projects in Africa, export credit agencies (ECAs) add to the many risks and threats. In addition, the ECA-supported investments in fossil fuels makes these countries economically dependent on energy sources that many countries in the world are committed to phase out, which poses serious economic debt risks, undermining their long-term resilience. Coming from a perspective of communities affected by ECA-supported energy projects, this report analyses the question what the best solution is for limiting global warming to 1.5C on the one hand, and facilitating universal energy access on the other hand. Furthermore, it analyses the question what the role of public financial institutions like ECAs could be in terms of promoting a green energy future in Africa.

https://www.bothends.org/en/Whats-new/Publicaties/A-Just-Energy-Transition-for-A...


Berne Union Yearbook 2020

(Berne Union, London, November 2020) Vinco David, Secretary General of the Berne Union (the International Union of Credit and Investment Insurers) notes in his introduction to this 179 page yearbook: "Now that news about the impact of and response to the COVID-19 pandemic is hitting the headlines so frequently, we could almost forget that there have also been several other noteworthy developments in the export credit and investment insurance industry. As the global trade association for the industry, the Berne Union is the organisation par excellence where all developments are shared and come together. Credit and investment insurers, and hence the Berne Union, are moving fast in a business environment that is also moving fast. This article will focus on how the Berne Union is changing in this environment. The following developments are highlighted:

  • The enhanced exchange of information between insurers/Berne Union members
  • Closer cooperation between the private market and ECAs
  • Cooperation with stakeholders in the wider industry
  • The growing importance of business data
  • Digitalisation
  • Regulation
  • And, of course, the COVID-19 pandemic"
https://bublob.blob.core.windows.net/assets/Images/Berne%20Union%20Yearbook%2020...


JBIC to lend Nissan $2B for U.S. sales financing

(Automotive News Europe, Detroit, 26 November 2020) Japan's state-owned export credit agency has agreed to give Nissan up to $2 billion as part of a credit agreement to help it finance car sales in the U.S. The money should help Nissan to sell cars in the world's second-biggest auto market after China by allowing it to provide customers with loans that they can repay in monthly installments. JBIC has provided loans for overseas sales financing to other automakers, including a $78 million October agreement with Honda in Brazil, and one in September for Toyota in South Africa. The latest agreement with Nissan is more than three times as much as a $582 million loan extended by JBIC in July to help Nissan finance car sales in Mexico.

https://europe.autonews.com/automakers/japans-export-credit-agency-will-lend-nis...


Mexican ECA seals US$600mn credit facility for Covid-19 response

Bancomext, a state-owned bank and export credit agency in Mexico, has obtained a US$600mn credit facility from a syndicate of international banks that will support its response to Covid-19. Law firm Norton Rose Fulbright represented Banco Santander, Citibank and Commerzbank, the three banks that took part in the syndicate. The facility is guaranteed by the Multilateral Investment Guarantee Agency (Miga), a member of the World Bank Group. The facility will support the bank’s funding strategy “amid a sharp contraction in export revenues, which account for nearly 40% of Mexico’s GDP. It will also provide working capital to companies across key exporting sectors of the Mexican economy, including the automotive, aeronautic, transport and logistics, tourism, manufacturing, construction and agriculture industries,” the firm said.

https://www.gtreview.com/news/americas/mexican-state-owned-bank-seals-us600mn-cr...


What you need to know about Nigeria’s $1.2bn export loan from Brazil

(Premium Times, Abuja, 9 November 2020) The Nigerian government has announced it plans to obtain a $1.2 billion (N459 billion) loan from Brazil. Funding for the programme will come from the Development Bank of Brazil and Deutsche Bank, with insurance provided by the Brazilian Guarantees and Fund Managements Agency and the Islamic Corporation for Insurance of Export Credit of the Islamic Development Bank, and will be coordinated by the Getúlio Vargas Foundation. The programme will import the completely knocked down parts of about 5,000 tractors and numerous implements (for local assembly) annually for a period of 10 years. The Minister said the Nigerian government would acquire 100,000 hectares of land in each state for food production, adding that link roads would be built in such locations to provide access for farmers to move farm produce to markets and reduce post-harvest losses. On another ECA note, the Nigerian Export-Import Bank (NEXIM) says it is positioning the economy for post crisis performance to be mindful of the fact that fiscal resources are urgently needed to contain the fallout of the COVID-19 outbreak and stimulate the economy. In that regard, the bank is proactively making interventions by way of investment in the manufacturing or production of exportable products – where Nigeria has comparative advantage – with the aim of providing buffer for the economy.

https://www.premiumtimesng.com/agriculture/agric-news/425277-what-you-need-to-kn...


Bombardier cooperating with SFO corruption investigation

(Compliance Week, Boston, 6 November 2020) The U.K. Serious Fraud Office (SFO) on Thursday confirmed it is investigating plane maker Bombardier over suspected bribery and corruption in relation to contracts and orders from Indonesian airline carrier Garuda Indonesia. According to the allegations, Garuda's former CEO received US$3.2 million in bribery payments from consultants in exchange for securing maintenance and procurement contracts for Rolls-Royce, Airbus, Bombardier, and Avions de Transport Regional. The bribery payments were said to have originated from the commissions received by the consultant from each of these airline manufacturers. The U.K. Serious Fraud Office (SFO) on Thursday confirmed it is investigating plane maker Bombardier over suspected bribery and corruption in relation to contracts and orders from Indonesian airline carrier Garuda Indonesia. As Compliance Week previously reported, a March 2017 report by the Organized Crime and Corruption Reporting Project — a consortium of nonprofit investigative centers and media outlets around the globe — alleged Bombardier Transportation paid “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom. Canada's Export Development Corporation (EDC) first initiated a review of Bombardier in August 2019, following leaked preliminary findings from a World Bank investigation into a 2013 contract Bombardier Transportation had with Azerbaijan Railways. In February 2020, (EDC, Canada’s export credit agency wholly owned by the Government of Canada, concluded in an independent review of Bombardier’s compliance policies and procedures that the company was progressing.

https://www.complianceweek.com/anti-corruption/bombardier-cooperating-with-sfo-c...


What's New October 2020

"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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • ECAs and Green Recovery
  • Africa and ECAs remain at the heart of big oil strategy despite oil export debt
  • UKEF could support 42,000 jobs annually by 2035 by switching focus to renewables
  • EU publishes 4th amendment to Temporary Framework for state aid to corporations re COVID
  • The natural resource curse in Mozambique
  • EXIM President: Battling China's predatory economics
  • FY 2021 Funds Available for Agricultural Export Credit Guarantees
  • S&P declares Zambia in default after missed debt payment
  • ICIEC signs cooperative MoUs with UKEF and CESCE
  • SACE's Michal Ron becomes the new president of Berne Union

ECAs and Green Recovery

(Christian Aid, London, 20 October 2020) This new report warns that post-Covid stimulus packages are in danger of widening global inequality and pushing poorer countries to turn to fossil fuels, which would threaten the success of the UK’s COP26 climate summit. The world stands at a crucial juncture, as nations choose between restarting their economies using fossil fuels, plunging us further into climate crisis, or taking the opportunity to accelerate the transition to a low carbon world which puts us on track to meeting the targets of the Paris climate accord. Governments of richer, OECD countries, including the UK, must cease all new direct and indirect public support for fossil fuels projects in other countries, including the use of aid budgets and export credits. Instead, aid and export credits should be used to scale up renewable energy, energy efficiency and energy access for the poorest.

https://www.christianaid.org.uk/resources/our-work/whose-green-recovery


Africa and ECAs remain at the heart of big oil strategy despite oil export debt

(Energy Intelligence Finance, New York, 30 September 2020) French TNC Total's CEO Patrick Pouyanne has emphasized that Africa will be at the "heart" of the company's long-term energy transition plans. Africa has long been a rich source of cash flow for Total (EIF Feb.19'20). In 2019, the continent generated around $10 billion of Total's $26 billion cash flow from operations, and 30% of its oil and gas production (900,000 barrels of oil equivalent per day). In July, Total and its partners secured $15.8 billion in project financing. The Export-Import Bank of the US and seven other export credit agencies provided loans, guarantees and insurance for Total's Mozambique LNG project alone (EIF Aug.12'20). Meanwhile, the Train 7 expansion of Nigerian LNG is another key African LNG project for Total (EIF Aug.26'20). Train 7, a joint venture between the Nigeria National Petroleum Corporation (NNPC) and international oil majors Royal Dutch Shell, ENI and Total, will be financed by a combination of NLNG's internally generated cashflows and US$3 billion of debt raised from a broad range of financiers, with the international and Nigerian banks and the DFIs providing US$1.5 billion of debt on an uncovered basis, and the South Korean and Italian ECAs directly funding or covering the remaining US$1.5 billion. An October report from Dutch ECA Atradius notes that the risk of sovereign default is growing across Africa because of higher debt levels and currency risk, with the shock hardest felt in oil exporting countries such as the Republic of the Congo and Angola, where oil accounts for more than 90% of the exporting revenues”.

http://www.energyintel.com/pages/eig_article.aspx?DocID=1085505


UKEF could support 42,000 jobs annually by 2035 by switching focus to renewables

(Energy Voice, London, 15 October 2020) The credit export wing of the UK Government could support tens of thousands of jobs in the coming years if it switched its focus from oil and gas to renewables, according to a new study. Research carried out by Vivid Economics, on behalf of the European Climate Foundation, shows that UK Export Finance (UKEF) would create more jobs by supporting clean energy owing to it being a more labour intensive industry. The study claims that, if the ministerial department assumed liabilities for renewables exports to the same scale it currently does for oil and gas, it could support 42,000 jobs in the sector annually by 2035, up from 2,000 today. UKEF came under fire earlier this year after it emerged it pledged $300 million (£230m) to a Total-led LNG project in Mozambique, prompting Boris Johnson to order a review of government guarantees for oil and gas projects. Oil Change International noted that “This report shows that the UK has a clear opportunity to show climate leadership and stop propping up deadly fossil fuels with public money."

https://www.energyvoice.com/otherenergy/271783/uk-export-finance-renewables-jobs...


EU publishes 4th amendment to Temporary Framework for state aid to corporations re COVID

(Lexology, London, 14 October 2020) The EU Commission has published a 4th amendment to its 19 March 2020 guidance document on state aid in reaction to the COVID-19 outbreak (see our blog post). Article 107(1) of the TFEU contains a general prohibition of aid granted by a Member State or through State resources which distorts competition and trade within the EU by favouring certain companies or the production of certain goods. The Temporary Framework was previously amended on 3 April 2020 (see our blog post), on 8 May 2020 (see our blog post) and on 29 June 2020 (see our blog post).The 4th amendment extends the availability of all the measures set out in the Temporary Framework and it introduces an extension of the temporary removal of all countries from the list of “marketable risk" countries under the Short-term export-credit insurance Communication (STEC). As a consequence of the COVID-19 outbreak, the Commission found in March 2020 that there is a lack of sufficient private insurance capacity for short-term export-credits in general and considered all commercial and political risks associated with exports to the countries listed in the Annex to STEC as temporarily non-marketable until 31 December 2020. TFX further reports that "certain governments have used ECAs as vehicles to help corporates better deal with the crisis, and some of the amounts involved have been substantial. For instance, a $6.9 billion support package for Fiat Chrysler was guaranteed by Italy’s Sace, an $817 million package for South Korea’s Doosan Heavy industries was backed by Kexim and the Korea Development Bank, and in July UKEF guaranteed £500 million ($642 million) of a £625 million loan from commercial banks for Jaguar LandRover."

https://www.lexology.com/library/detail.aspx?g=1305cc5f-48c8-4ad6-b7db-09b4459be...


The natural resource curse in Mozambique

(New Frame, Johannesburg, 20 October 2020) Do transnational fossil fuel corporations promote defence spending over social investment? A long read about a complex situation where export credit agencies have supported hugh MNC oil and gas developments.

https://www.newframe.com/the-natural-resource-curse-in-cabo-delgado


EXIM President: Battling China's predatory economics

(Fox News - Opinion, Washington, 17 October 2020) Kimberly Reed: The latest manifestation of China’s economic aggression is the increasing use of export financing to distort fair and free-market competition. In 2019 alone, communist China provided three times the export financing of the next-largest provider. For Beijing, export financing helps increase its influence abroad as well as promote its One Belt, One Road initiative. Chinese official financing in 2019 totaled at least $76 billion all around the world, all of it designed to further Beijing’s global objectives, and much of it targeted to reduce U.S. economic influence. By handing out money around the world at low-interest rates, Beijing is able to advance its strategic objectives. The goal? Global dominance by 2049. If the U.S. is to combat China’s latest form of aggression, we must step up our export financing game. Enter, the Export-Import Bank of the United States (EXIM), which can play a central role in leveling the global marketplace for American exporters and supporting American jobs.  launched a new “Program on China and Transformational Exports” to support the extension of loans, guarantees, and insurance to American exporters on terms competitive with the PRC’s. EXIM’s goal is to reserve at least $27 billion in financing to “neutralize” PRC export subsidies and advance the comparative leadership of the United States with respect to the PRC. [How these U.S. "subsidies" fit into the OECD's efforts "to provide a framework for the orderly use of officially supported export credits by fostering a level playing field in order to encourage competition among exporters based on quality and prices of goods and services exported rather than on the most favourable officially supported export credits" is misterious.]

https://www.foxbusiness.com/economy/export-import-bank-reed-nsa-obrien-china-eco...


FY 2021 Funds Available for Agricultural Export Credit Guarantees

(USDA, Washington, 5 October 2020) On October 5, 2020, the U.S. Department of Agriculture announced availability of export credit guarantees for sales of U.S. agricultural commodities under the Commodity Credit Corporation’s (CCC) Export Credit Guarantee Program (GSM-102) for fiscal year 2021. US$2.5 billion will be available in 2021 allocated as follows: Africa, Middle East, Turkey, Caucasus, Central Asia US$425 million, Asia US$475 million, Latin America US$1.6 billion

https://www.fas.usda.gov/newsroom/fy-2021-funds-available-export-credit-guarante...


S&P declares Zambia in default after missed debt payment

(Agence France-Presse, Washington, 22 October 2020) Ratings agency Standard & Poor's (S&P) declared Zambia's government in default on Wednesday, October 21, after the African nation missed an interest payment. The mineral-rich southern African country has seen its debt surge to nearly $12 billion this year as commodity prices have fallen amid the coronavirus pandemic. S&P noted that half the government's debt is owed to official creditors, including export credit agencies, while over $3 billion or 25% "is owed to various Chinese lenders including policy banks – China Exim Bank and China Development Bank – as well as private Chinese banks."

https://www.rappler.com/business/standard-poors-declares-zambia-default-after-mi...


ICIEC signs cooperative MoUs with UKEF and CESCE

(Zawya, Dubai, 4 October 2020) The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) signed a Memorandum of Understanding (MoU) for cooperation with the United Kingdom’s Export Credit Agency (UKEF). The MoU allows for both entities to enter into co-insurance, reinsurance or cooperation agreements to engage in strategic joint projects that support exports and investments from the United Kingdom into ICIEC’s 47 member countries including UAE, Oman and Bahrain – all ICIEC member countries.. The partnership is beneficial for both institutions as they each offer Shariah compliant financing through the provision of Islamic Sukuk and share an interest in promoting and supporting Islamic finance transactions. ICIEC has also signed a memorandum of understanding with Spanish ECA CESCE

https://www.zawya.com/mena/en/press-releases/story/ICIEC_signs_cooperative_MoU_w...


SACE's Michal Ron becomes the new president of Berne Union

(TXF News, London, 28 October 2020) Last week the Berne Union (BU) also held its annual meeting, on a virtual basis, and Michal Ron, chief international officer of the Italian export credit agency Sace, was voted in as the new BU president. Outgoing president Beatriz Reguero (Cesce) remarked that her term had been characterised by an environment of unprecedented uncertainty, with the Covid pandemic the most visible manifestation of this. Incoming President Michal Ron has expressed her mission for the term is to increase inclusivity and help bridge the gap between export credit insurers from advanced economies and developing economies. She also wants to further promote open dialogue between OECD and non-OECD members, eastern and western hemisphere institutions, private and public operators, contemporaneously providing a wider platform to emerging market members of the BU. During the AGM members also engaged in a virtual ‘stocktake’ of the state of the export credit and investment insurance industry during the Covid pandemic. While claims activity was said to be currently relatively subdued – $3.3 billion paid in 2020 H1, compared to $3.2 billion in 2019 H1 – many members reported a marked increase in payment deferrals and pre-claim situations and most expected to see Covid-related claims levels rising from early next year. BU members flagged particular vulnerabilities in the transportation sector – especially aviation and shipping – as well as retail, construction and product manufacturing. In a BU survey, 80% of members reported an increase in new demand, most commonly for short-term credit and working capital products. Around a third of respondents indicated that this includes a substantial increase in inquiries from new clients. BU data shows that short-term commitments in the first half of 2020 ($1,644 billion) were marginally down year-on-year, but new cover for domestic risks (largely cover for working capital and manufacturing risks) increased almost 50% in the same time, up to $36 billion in the first half of 2020.

https://www.txfnews.com/News/Article/7077/Export-finance-rolls-up-its-sleeves-fo...


What's New September 2020

"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.

If you would like to receive "What's New!" write us at info-at-eca-watch.org

Questions?  Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • No proper benchmark for checking European ECAs' compliance with EU objectives
  • ECAs back $9.5 billion financing for Russia's Arctic LNG 2
  • New report calls for end to export credits to coal
  • IFC adopts Urgewald’s Global Coal Exit List
  • EXIM's program to undercut Chinese export subsidies
  • G12 ECA Group Issues First-Ever Joint Statement
  • Trade credit insurance claims expected to surge
  • Are we seeing the end of the UKEF's (& other ECA) fossil fuel empire(s)?
  • Project Finance, human rights and climate change: Updated Equator Principles
  • US EXIM notifies Congress of potential support for Pemex
  • NYT Opinion: EXIM and Corporate Welfare Cronyism
  • Emirates Global Aluminium PJSC (EGA) comes online in Guinea with ECA loans
  • Gensource Potash awaits Hermes approval of ECA support

No proper benchmark for checking European ECAs' compliance with EU objectives

(Bankwatch, Prague, 4 September 2020) Despite being the biggest class of public finance institutions operating internationally, export credit agencies (ECAs) are rarely subject to any public scrutiny. European ECAs self-declare compliance with the non-binding OECD Common Approaches standards, but it’s an insufficient benchmark for evaluating compliance with the EU’s External Action obligations as stated by the relevant EU Regulation.

https://bankwatch.org/blog/no-proper-benchmark-for-checking-european-export-cred...


ECAs back $9.5 billion financing for Russia's Arctic LNG 2

(Reuters, London, 18 September 2020) International lenders have lined up about $9.5 billion in financial support for a Russian Arctic liquefied natural gas (LNG) project, a document seen by Reuters showed, even as such projects come under greater scrutiny over climate concerns. The $21 billion project, which received final investment approval a year ago, is expected to be launched in 2023 and to reach its full capacity of almost 20 million tonnes per year in 2026. Among the lenders is France's Bpifrance, with an offer of $700 million in credit finance, the China Development Bank, expected to offer a facility worth $5 billion and Germany's Euler Hermes, with a covered facility of $300 million. Japan's JBIC is offering $2.5 billion, Italy's SACE plans to put $1 billion into the project, while an unnamed Russian bank is reportedly considering a $1.5-billion investment. While the energy industry touts natural gas as a cleaner alternative to coal or crude, it is a source of carbon emissions and critics say LNG projects are hard to reconcile with the transition to low-carbon economy envisaged in the Paris climate agreement and the European Union's Green Deal economic plan.

https://finance.yahoo.com/news/exclusive-international-lenders-back-9-080925404....


New report calls for end to export credits to coal

(Swedwatch, Stockholm, 25 September 2020) The coal industry is well-known for its serious climate implications and effects on local communities. Still, European export credits have contributed to expand the coal industry in countries already dependent on coal, including South Africa, a new Swedwatch report finds. In the last decade, ECAs from Germany, Sweden and France have provided significant export credits to South Africa’s coal sector. The country derives 90% of its electricity from coal and is currently constructing two new, large-scale coal-fired powerplants while establishing several new coal mines. Through their export support, the ECAs have contributed to the expansion of the country’s coal industry, which has a well-documented history of adverse environmental and human rights impacts. As European ECAs generally adhere to export guidelines from the OECD, which do not prohibit support for coal-related exports, the report urges France, Sweden and Germany – who have taken vital steps in this direction – to actively push for other OECD member countries to follow suit. The report makes it clear that there is an extensive lack of transparency in relation to export credits, guarantees, insurances and other means of export support.

https://swedwatch.org/regions/africa-south-of-the-sahara/new-report-calls-for-en...


IFC adopts Urgewald’s Global Coal Exit List

(Urgewald, Sassenberg, 21 September 2020) In its recently released report on Greening Equity Investments in Financial Institutions the International Finance Corporation (IFC), the private sector arm of the World Bank Group, announced it has adopted Urgewald’s Global Coal Exit List. Furthermore, the IFC recommends the Global Coal Exit List to its clients and urges them to screen their exposure against the list. [2] Urgewald’s Global Coal Exit List provides comprehensive data on the world’s coal industry. Talks about cooperating with Urgewald to adopt the Global Coal Exit List had started after an IFC announcement in April 2019. Since then the NGO has been able to convince the IFC to amend their coal exit criteria in two important ways:

  • to exclude the companies responsible for coal expansion as opposed to only coal projects
  • include a definition of the coal share of revenue that not only refers to coal sales but different coal-related business activities

While urging clients to screen their portfolios against the Global Coal Exit List is an important first step, the next step for the IFC has to invariably be a detailed follow-up to verify that clients actually implement the new criteria.

https://urgewald.org/en/medien/ifc-adopts-urgewalds-global-coal-exit-list-and-re...


EXIM's program to undercut Chinese export subsidies

(EXIM, Washington, 9 September 2020) EXIM announced today the appointment of 17 members to its Advisory Committee, and establishment of a new EXIM Advisory Committee Subcommittee on Strategic Competition with the People’s Republic of China. The Program’s purpose is to support the extension of loans, guarantees, and insurance, at rates and on terms and other conditions, to the extent practicable, that are fully competitive with [i.e. undercut] rates, terms, and other conditions established by the People’s Republic of China or by other covered countries (as designated by the Secretary of the Treasury). From 2015 to 2019, China’s official medium- and long-term (MLT) export credit activity alone was at least equal to 90% of that provided by all G7 countries combined. China’s official MLT export and trade-related financing totaled at least $76 billion in 2019. EXIM seeks to reserve at least 20% of our financing authority, or at least $27 billion of our $135 billion in financing, to ‘neutralize’ Beijing’s export subsidies, advance the comparative leadership of the United States with respect to the PRC, and support U.S. innovation, employment, and technological standards through direct exports in 10 industries key to America’s prosperity and security.

https://www.exim.gov/who-we-serve/external-engagement/program-on-china-and-trans...


G12 ECA Group Issues First-Ever Joint Statement

(Global Trading Magazine, Dallas, 25 September 2020) At the Sept. 9 end of the two-day 2020 G12 Heads of Export Credit Agencies (ECAs) meeting, which EXIM Bank hosted virtually from its Washington, D.C. headquarters, the 12 Heads of ECAs issued its first-ever G12 joint statement. ECAs involved included: EXIM USA (Host), Brazil, Canada, China, France, Germany, India, Italy, Japan, Russia, the Republic of Korea and the United Kingdom. The 2020 G12 Heads of Export Credit Agencies (ECA) Meeting was a productive and open exchange that highlighted efforts aimed at stabilizing the availability of working capital and export credit in a volatile international market environment. The transparent discussion brought forth the important work each ECA is undertaking to mitigate the economic impacts of the COVID-19 pandemic. The ECA leaders reiterated their steadfast commitment to supporting their global supply chains—domestically and internationally—as well as promoting exports, job security, and financial investment, all of which underpin prosperity at home and abroad. In the wake of the COVID-19 pandemic, this is an important time for Export Credit Agency leaders from around the world to find common ground on key initiatives, especially those that foster greater transparency,

https://www.globaltrademag.com/g12-export-credit-agency-issues-first-ever-joint-...


Trade credit insurance claims expected to surge

(Asia Insurance Review, Singapore, 23 September 2020) A Berne Union report notes that the expected spike in trade credit claims resulting from the COVID-19 pandemic has not yet been realised, according to a preliminary report on the business activity of Berne Union members in the first half of 2020. Export credit claims paid in the 1st half of 2020 were 16% lower overall than for the first half of 2019. The fall can be partially attributed to a decline in new commitments during the same time which has been largely caused by a general decline in exports. A 23% drop in new medium and long-term commitments (MLT) was reported and there was also a 4% decrease in aggregate credit limits issued under short-term (ST) export credit insurance policies. In the MLT business, both public and private insurers’ new commitments declined. Meanwhile, for the short-term, private insurers’ commitments fell by 8%, whereas those of public insurers rose by the same percentage according to The Berne Union.

https://www.asiainsurancereview.com/News/View-NewsLetter-Article/id/73772/Type/e...


Are we seeing the end of the UKEF's (& other ECA) fossil fuel empire(s)?

(Prospect, London, 10 September 2020) Boris Johnson has pledged to end Britain's support for global gas and oil projects. But will the government really make good on its promise? Investors across the world are growing increasingly wary of financing fossil fuels—and for good reason. In an era of climate protest, carbon neutrality pledges and cheap renewable energy, oil refineries and gas fields look like risky bets. Until recently, ECAs had sunk serious sums of money into fossil fuels without facing much backlash. Figures compiled by the research and advocacy group Oil Change International show that the world’s ECAs provided over $40bn annually to support fossil fuel projects between 2016 and 2018—compared to $2.9bn for clean energy. UK Export Finance (UKEF) was no outlier among its peers. Last year, a report from Parliament’s Environmental Audit Committee revealed that 96% (£2.5bn) of UKEF’s of energy investments between 2013 and 2017 went to polluting projects. Of this total, £2.4bn was funneled into fossil fuel projects in low and middle-income countries. If the legislation is free of loopholes, it will divert several billion pounds of public money away from extractive industries and, ideally, towards renewable alternatives. Most importantly, it will signal to the private sector that the end of the oil age is fast approaching. Since the 2015 Paris Agreement, the world’s largest investment banks have provided more than $700bn for fossil fuel projects. In January, a joint investigation by Newsnight and Greenpeace’s Unearthed revealed that UKEF has helped to finance oil and gas projects which, when complete, will emit 69 million tonnes of greenhouse gases a year. The agency found itself in hot water again in July when it was discovered that it was helping to fund a massive new gas extraction project in Mozambique, along with seven other ECAs.

https://www.prospectmagazine.co.uk/science-and-technology/fossil-fuels-uk-statis...


Project Finance, human rights and climate change: Updated Equator Principles

(Lexology, London, 25 September 2020) The Equator Principles have been one of the principal frameworks for managing sustainability and ESG risk in projects by financial institutions since 2003. The latest update – known as EP4 – renews the focus on human rights and climate change with effect from October 1, 2020. EP4 is the latest update for EP assessment and management of environmental and social risk in international project finance. There are now 110 EPFIs which include banks and [some] export credit agencies. Key differences from the June 2013 version (EP3) relate to the scope of transactions covered by the Equator Principles, and new requirements in relation to projects in high-income Organization for Economic Cooperation and Development (OECD) nations, human rights, impacts on indigenous peoples and climate change

https://www.lexology.com/library/detail.aspx?g=fe7f3b12-06e9-4671-b73e-544b08a49...


US EXIM notifies Congress of potential support for Pemex

EXIM, Washington, 27 August 2020) The Export-Import Bank of the United States (EXIM) Board of Directors today unanimously voted to notify the U.S. Congress, pursuant to the law, of its consideration of two transactions that would facilitate the authorization of a $350 million general facility and $50 million small business facility (SBF) for Petroleos Mexicanos (Pemex). If approved, the combined $400 million financing facilities would support an estimated 1,700 jobs in California, Colorado, Connecticut, Georgia, Illinois, Iowa, Louisiana, Minnesota, Oklahoma, Pennsylvania, and Texas in the oilfield services industry, which has faced difficulties as a result of the COVID-19 pandemic. EXIM received the applications from PEMEX for the facilities in March 2020.

https://www.exim.gov/news/exim-board-votes-notify-congress-two-potential-transac...


NYT Opinion: EXIM and Corporate Welfare Cronyism

(New York Times, Fairfax, 4 September 2020) In 1971 at the urging of banking lobbyists, the U.S. Export-Import Bank created the Private Export Funding Corporation (PEFCO), a private entity owned by over two dozen banks and a handful of big corporations. It has operated under consecutive 25-year mandates with an exclusive arrangement, under special terms, to acquire EXIM loans from commercial lenders. Because these loans are fully backed by taxpayers, they impart no risk for the banks that issue them. PEFCO’s current authorization expires at the end of December, but its cozy dealings with big banks and corporations deserve far greater scrutiny. Consider this hypothetical scenario: Boeing wants to sell airplanes to China Air. Boeing asks EXIM to guarantee a loan to China Air so it can purchase the aircraft. JPMorgan Chase originates what becomes a loan from EXIM -  guaranteed by taxpayers -  for China Air. (The bank earns interest at no risk because, even if the borrower defaults, taxpayers will cover it.) Then JP Morgan Chase turns around and sells the loan to PEFCO, which buys the loan using debt raised from investors that is separately guaranteed by EXIM (again, American taxpayers). JPMorgan Chase is also a major shareholder of PEFCO, and PEFCO can pay its shareholders dividends. PEFCO’s shareholders include the same large corporate exporters that account for a large portion of EXIM financing, like Boeing and General Electric. The extensive dealings between Boeing and EXIM - in 2014, for instance, Boeing benefited from 40% of the bank’s activities - explains why critics refer to “the Bank of Boeing.” PEFCO takes that cronyism to a new level. Of EXIM's guaranteed loans that PEFCO acquires, 86% are in the aircraft sector. What’s more, Boeing’s senior vice president for finance and treasurer is on PEFCO’s board of directors.  Nearly every proponent claims that PEFCO plays a crucial role in supporting loans to small businesses. Yet as that unit’s own public reporting shows, less than 4% of the portfolio involves small-business lending — a far cry from the current 25% mandated by EXIM's charter (that will rise to 30% in 2021).

https://www.nytimes.com/2020/09/04/opinion/pefco-export-import-bank.html


Emirates Global Aluminium PJSC (EGA) comes online in Guinea with ECA loans

(Aluminum Insider, Paris, 30 August 2020) With full production at its alumina refinery in Abu Dhabi, coupled with the beginning of production at GAC, EGA says it has completed its strategic upstream expansion. GAC is one of the biggest greenfield investments in Guinea in over four decades, made possible by an investment of US$1.4 billion. About half of that funding was provided in the form of a loan from development finance institutions, export credit agencies, and international commercial banks.

https://aluminiuminsider.com/ega-shipped-over-6-1-million-dmt-of-bauxite-ore-fro...


Gensource Potash awaits Hermes approval of ECA support

(Business Wire, Saskatoon, 31 August 2020) Gensource Potash Corporation, a Canadian fertilizer development company focused on sustainable potash production, announces the successful completion of the next major milestone for its Tugaske Project. Gensource has now received approval of its Development Permit Application for a potash mine from the Rural Municipality of Huron No. 223, whose offices are in the Village of Tugaske, Saskatchewan. A significant portion of the Facility is to have ECA coverage from Hermes, with procurement managed by MAVEG Industrieausrüstungen GmbH using a Debt Facility of approximately US$180 million, with due diligence to be overseen and managed by KfW IPEX-Bank.

https://www.businesswire.com/news/home/20200831005158/en/


What's New August 2020

"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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  •  ECAs, COVID-19 and Climate: Recommendations to Ensure that Economic Support Protects People and the Planet
  •  Johnson poised to stop UKEF funding overseas fossil fuel projects
  •  Afreximbank Commits US$400 M To Mozambique's LNG Project
  •  EC approves €2bn scheme to support Italian trade credit insurance
  •  China slow to curb coal financing as Japan, South Korea ‘accept new reality’ on phasing out fossil fuels
  •  Ford secures UKEF loan guarantee to build on engine exports
  •  Airbus to be sued by investors for bribery and export control violations
  •  US Firms Announce Power Agreements Worth Billions With Iraq
  •  Exim backs exports to Argentina’s YPF
  •  Ghana commissions University of Environment and Sustainable Development
  •  Bangladesh's Prime Bank approved by USDA export credit guarantee programme
  •  Nigeria: Appraising 3 Years of Reform At Nexim Bank
  •  Canadian Football League tackles EDC backed loan

ECAs, COVID-19 and Climate: Recommendations to Ensure that Economic Support Protects People and the Planet

(ECA Watch members, 10 August 2020) This 9 page report finds that while ECA responses to COVID-19 are still quickly evolving, it’s now clear that these institutions are:

  •  Providing more favorable financing terms;
  •  Expanding the geographic scope of the projects and companies they are supporting, including new domestic coverage that was very rare for ECAs prior to COVID-19;
  •  Failing to ensure proper transparency and oversight of who is getting this support and how it is being used;
  •  Increasing risks of corruption, human rights abuses, and environmental destruction;
  •  Potentially increasing support for megaprojects like Mozambique LNG that has already received billions from ECAs; and
  •  Potentially supporting many oil and gas companies that were already financially unviable even before the COVID-19 crisis.

The report’s recommendations include that ECAs must:

  • Ensure that their COVID-19 responses are in line with the Paris Agreement’s 1.5 degree Celsius target and the Sustainable Development Goals;
  • Continue progress on climate policies and protections, including explicitly excluding support for fossil fuel related projects;
  • Promote transparency by providing detailed, public information on all support provided at the time the support is provided; and
  • Uphold all standards on social and environmental due diligence
https://1bps6437gg8c169i0y1drtgz-wpengine.netdna-ssl.com/wp-content/uploads/2020...


Johnson poised to stop UKEF funding overseas fossil fuel projects

(MSN News, London, 12 August 2020) Boris Johnson is poised to sign off new rules barring the UK government’s chief foreign lender from offering financial support to foreign fossil fuel projects. The new policy, which could come as soon as this week, will rule out future loans and financial guarantees for polluting projects overseas through the UK’s export credit agency, UK Export Finance, just weeks after it agreed to a £1bn financial package to support work on a gas project in Mozambique. Under the new rules no support may be offered to fossil fuel extraction or oil refining projects from 2021, apart from limited funding for gas-fired power plants “in exceptional circumstances”. The funding plan raised hackles within the prime minister’s office earlier this summer, according to sources, because aides were told that Africa’s biggest ever financing deal in Mozambique was too far advanced for UKEF to abandon. Green campaigners have described UKEF policies as “rank hypocrisy”, falling foul of OECD guidelines.

https://www.msn.com/en-us/news/world/boris-johnson-poised-to-stop-uk-funding-ove...


Afreximbank Commits US$400 M To Mozambique's LNG Project

(AllAfrica, Cairo, 6 August 2020) The African Export-Import Bank (Afreximbank) is supporting the advancement of Mozambique’s energy industry and economy by committing up to US$400 million in guarantees and direct lending to the Area 1 LNG Project. The Total Project is estimated to cost about US$24 billion and  is set to be the largest private foreign direct investment in Africa, and one of the largest LNG projects in the world. Last month's ECA Watch What's New highlighted the climate change implications of ECA involvement, now critics say donor countries and international organizations are propping up a corrupt government that's leaving millions of Mozambicans mired in poverty.

https://allafrica.com/stories/202008060648.html


EC approves €2bn scheme to support Italian trade credit insurance

(Market Screener, Annecy, 13 August 2020) Under EU state aid rules, the European Commission (EC) has approved a €2bn ($2.37bn) Italian scheme to support the trade credit insurance market in the context of the coronavirus outbreak. Italy notified the Commission of a State guarantee scheme for the reinsurance of trade credit risks to support companies affected by the coronavirus outbreak. The scheme will be administered by SACE, the Italian Export Credit Agency. On 19 March 2020, the Commission adopted a State aid Temporary Framework to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April 2020 and 8 May and 29 June 2020, provides for the types of aid which can be granted by Member States.

https://www.marketscreener.com/news/Statsst-tte-Kommissionen-godkender-italiensk...


China slow to curb coal financing as Japan, South Korea ‘accept new reality’ on phasing out fossil fuels

(South China Morning Post, Hong Kong, 15 August 2020) China risks being left behind as South Korea and Japan signal a shift away from financing overseas coal power in response to growing criticism over their support for the dirty fossil fuel. The three countries are the top global lenders for coal energy infrastructure, bankrolling projects beyond their borders through export credit agencies and developing new markets to export coal plant technology. But there are signs that Japan and South Korea may be preparing to scale back official support amid mounting pressure from the public and investors on environmental grounds. Environmental campaigners hope the moves by Japan and South Korea will put pressure on China, but whether the world’s largest financier of coal energy will take similar steps remains to be seen. China has an outsize impact on development financing for coal. From 2000-2019, its two global policy banks – the China Development Bank and the Export-Import Bank of China – issued loans totalling US$51.8 billion for coal energy projects around the world, according to the Global Development Policy Centre at Boston University. In comparison Japan spent US$26 billion financing 36 overseas coal-fired power plants between January 2003 and April 2019 and South Korean public financial institutions, meanwhile, supported 24 overseas coal projects with US$10 billion from 2008 to 2018.

https://www.scmp.com/economy/global-economy/article/3097259/china-slow-curb-coal...


Ford secures UKEF loan guarantee to build on engine exports

(Automotive Logistics, London, 10 August 2020) Ford has received a £500m ($648m) guarantee from UK Export Finance (UKEF) to help it maintain exports of engines and transmissions from the UK. The guarantee, which was given in July, is part of a planned £625m loan facility from commercial banks using its Export Development Guarantee. Last year the carmaker announced it was closing its engine factory in Bridgend, South Wales, which makes the 1.5-litre, three-cylinder engine because of declining demand.

https://www.automotivelogistics.media/oems/ford-secures-loan-to-build-on-engine-...


Airbus to be sued by investors for bribery and export control violations

(Pomerantz LLP, New York, 29 August 2020) New York law firm Pomerantz has initiated a class action on behalf of Airbus investors who acquired Airbus securities in the U.S. between February 24, 2016, and July 30, 2020, On January 31, 2020, media outlets reported that Airbus had agreed to a deal with U.S., U.K. and French prosecutors to settle bribery and export-control violations against the Company for €3.6 billion ($4 billion).  Airbus misled UK export credit agency UKEF over the identity of an intermediary receiving millions in commissions.

https://pomlaw.com/active-cases-ab/eadsy


US Firms Announce Power Agreements Worth Billions With Iraq

(New York Times/Reuters, New York, 19 August 2020) General Electric Co said it had signed two new agreements valued at over $1.2 billion with the Iraqi Ministry of Electricity, to undertake maintenance programs across key power plants in the country and bolster its transmission network. The U.S. conglomerate was also working with multiple export credit agencies to facilitate financing of more than $1 billion for the projects, it said in a statement on Wednesday.  Oil company Chevron Corp, Honeywell International Inc and Stellar Energy are also expected to unveil progress shortly on agreements with Iraq to develop one of the country's large oil fields.

https://www.nytimes.com/reuters/2020/08/19/business/19reuters-ge-iraq.html


Exim backs exports to Argentina’s YPF

(Global Trade review, London, 12 August 2020) The Export-Import Bank of the United States (US Exim) has penned a US$75mn credit guarantee facility (CGF) with state-backed Argentinian energy company YPF. US Exim will cover a loan from Bank of America as part of the deal, with YPF – the biggest oil and gas producer in the South American country. As the oil sector reeled from a price war between major producers Russia and Saudi Arabia in March, together with the impact of Covid-19 containment measures – which saw demand and storage space for the commodity dry up – the US oil benchmark was briefly plunged into negative territory for the first time ever.

https://www.gtreview.com/news/americas/us-exim-backs-exports-to-argentinas-ypf-w...


Ghana commissions University of Environment and Sustainable Development

(Business Ghana, Accra, 6 August 2020) The new university, funded through the Italian Export Credit Agency, SACE, and the German bank, Deutsche Bank, will providing holistic training for environmental and sustainable development professionals in Ghana. It will offer general and specialized degree programmes and research in climate change, water resources development, energy sustainability, energy economics and policy, urban architecture, natural resources and environmental economics, environmental policy and environmental science.

https://www.businessghana.com/site/news/general/219607/President-commissions-Uni...


Bangladesh's Prime Bank approved by USDA export credit guarantee programme

(The Independent, Dhaka, 23 August 2020) The Commodity Credit Corporation (CCC) of the United Stated has approved Bangladesh's Prime Bank to participate in the Export Credit Guarantee Program (GSM-102) of United States Department of Agriculture (USDA) for the smooth import of US agricultural commodities. Prime Bank is one of the first two banks in Bangladesh which have been approved as GSM-102 Approved Foreign Financial Institutions from Asia Region, said a press release. As an approved foreign financial institution, Prime Bank would be able to support its customers to import food and agricultural commodities from the US like cotton, soybeans, grains, cereals, woods, nuts, fruits among others under the guarantee coverage of GSM-102 Export Credit Guarantee Program administered by USDA, the statement said.

http://www.theindependentbd.com/post/252108


Nigeria: Appraising 3 Years of Reform At Nexim Bank

(AllAfrica, Lagos, 25 August 2020) Since 1986, Nigeria has pursued an export-led strategy. This includes an emphasis on non-oil exports such as cocoa, groundnut, cotton, palm produce, rubber, and grains owing to perennial fluctuations in the prices of oil in the international market. One component of this strategy was the establishment of the Nigerian Export-Import Bank (NEXIM) in 1991. Owing to the twin shock of the COVID-19 pandemic and the sudden fall in international oil price, the Nigerian economy is experiencing a fall in exchange earning, a fall in Gross Domestic Product (with latest figures showing a contraction of over 6 percent), depletion of external reserve, currently at $34 billion, scarcity of foreign exchange, and high cost of goods. Public policy analyst, Terhemen Ikyaave noted a boost in collaboration between NEXIM and the Central Bank of Nigeria to fund the non-oil export sector. A notable result he said is the disbursement of loans totaling over N39bn (US$100.6M) to 27 export companies under the Non-Oil Export Stimulation Facility.

https://allafrica.com/stories/202008250385.html


Canadian Football League tackles EDC backed loan

(Globe and Mail, Toronto, 31 July 2020) The Canadian Football League (CFL), facing Corona virus slashed ticket sales, is seeking Canadian government assistance via a bank loan under the Business Credit Availability Program (BCAP), after the Business Development Bank of Canada and the CFL couldn’t agree on loan terms. The loan could be guaranteed (up to 80%) by Export Development Canada (EDC), another crown corporation.

https://www.theglobeandmail.com/sports/football/article-cfl-no-longer-trying-to-...


What's New July 2020

"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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • US Exim's role in the Republican/China trade and political war updated
  • SINOSURE maintains steady business growth in H1
  • Danish ECA EKF moves to hide environmental negligence in Armenia updated
  • Mozambique’s ECA backed multi-billion dollar gamble on LNG
  • Serious concerns’ raised over UKEF by Spotlight on Corruption
  • EDC’s role in Canada's oil and gas bailout
  • Ditch Public Financing of Fossil Fuels
  • ECAs and the Aviation Industry: What Does the Future Hold?
  • 80% of Hong Kong Security Law Backers at the U.N. Are Belt and Road Signatories
  • Japan’s plan to curb coal plant lending has major “loopholes” updated
  • HSBC arranges first Green ECA loan in Saudi Arabia
  • Portugal launches plan to boost exports hit by pandemic
  • Finveram warns of 2020 loss due to coronavirus
  • Embraer business jet unit gets $97 mln U.S. EXIM loan guarantee

Embraer business jet unit gets $97 mln U.S. EXIM Bank loan guarantee

(Reuters, Washington, 30 July 2020) The U.S. Export-Import Bank said on Thursday its board of directors approved a $97.2 million working capital loan guarantee for Brazilian aircraft maker Embraer’s U.S.-based business jet subsidiary. The federal export credit agency said the guarantee for the one-year, revolving working capital facility from Apple Bank for Savings would support an estimated 800 U.S. jobs, mainly at Embraer Executive Aircraft’s factory in Melbourne, Florida. EXIM said the loan guarantee also would support supply chain jobs in Arizona, Connecticut, Georgia, Tennessee and Texas. Embraer has been struggling to craft a new future since Boeing Co canceled its $4.2 billion takeover of the Brazilian jetmaker’s commercial aircraft business in April. Boeing has traditionally been EXIM’s largest single customer, using the agency to finance jetliner sales to many foreign airlines.

https://www.reuters.com/article/usa-aerospace-embraer-exim/embraer-business-jet-...


US Exim's role in the Republican/China trade and political war

(TXF News, New York, 16 July 2020) The US administration [and corporate media] has drastically upped the ante in its economic war against China with its actions against Huawei. At the same time, US Exim has been charged to not only promote US exports and jobs but also counter Chinese state financing where necessary. For Exim, which came back from its virtual 7 year moribund state when it was fully reauthorised on 20 December 2019, there is much work to be done to rebuild relationships with overseas markets and actively support US exports and jobs. But one of the additional requirements for US Exim under its new mandate is to directly counter China’s two ECAs – Sinosure and China Exim. Beijing is using its ECAs, along with several other state entities, to expand its economic influence and gain a competitive advantage against the United States, the U.S. Export-Import Bank said in its annual competitiveness report. China’s official medium- and long-term export credit activity from 2015 to 2019 was at least 90 percent of that provided by all G-7 countries, the report found. Anti-China sentiment has grown significantly through this year and the Covid-19 period in particular. As such, the widening of the trade war to unilaterally introduce sanctions on a company such as Huawei drastically broadens the scope of the US economic confrontation with China. But for US Exim, even fully funded, and for that matter other ECAs globally, they still face an uphill struggle in competing against Chinese ECAs which not only have huge financial resources at their disposal, but also a big start in many markets – particularly within Africa - where China Inc has spent years developing its trade and investment foothold. China has not been afraid to fly the China Inc flag by extending itself over longer terms and with cheaper debt. Many other ECAs are part of the OECD Consensus and for certain market activity they [are supposed to] follow specific agreed guidelines. China is not part of this. Some observers have categorised China’s trade and investment activities in Africa as a new form of colonialism.  There never has been, nor will there ever be a true ‘level playing field’. EXIM's new mandate charged it with a goal of reserving not less than 20% of the agency’s total financing authority (ie $27 billion out of a total of $135 billion) “to directly neutralise China’s export subsidies for competing Chinese goods and services."  Republican members of the China Task Force have expressed gratitude for "the Export-Import Bank’s multi-pronged efforts to combat the Chinese Communist Party’s (CCPs) predatory practices that put American workers and companies at a disadvantage."

https://www.txfnews.com/News/Article/7030/US-Exim-has-key-role-to-play-in-China-...


SINOSURE maintains steady business growth in H1

(Xinhua, Beijing, 19 July 2020) SINOSURE, China's only policy-oriented insurer specializing in export credit insurance reported steady business growth in the first half of this year despite the COVID-19 pandemic. The China Export & Credit Insurance Corporation had served over 126,000 clients, increasing 21.1 percent year on year in the first six months. During the January-June period, the company had underwritten over 324.6 billion U.S. dollars worth of insured businesses. Of the total, the insurer offered about 266.9 billion dollars of short-term export credit insurance and 176.5 billion dollars (about 25.2 billion dollars) of export credit insurance for domestic trade, up 5.2 percent and 20.1 percent year on year, respectively.

http://www.xinhuanet.com/english/2020-07/19/c_139223915.htm


Danish ECA EKF moves to hide environmental negligence in Armenia

(Open Democracy, London, 28 July 2020) After a Danish-funded mine caused serious environmental damage in Armenia, the Danish state has been less than forthcoming on failed due diligence, transparency and compensation. As a result of the Danish-funded mine construction, the Teghut mine caused the pollution of local rivers, with damage so severe that local farmers and fruit growers lost their livelihoods. A dam containing liquid waste from the mine still threatens to collapse and bury a nearby village. Now, some seven years after the original loan was approved, Denmark’s business ministry has quietly introduced an extensive duty of confidentiality for EKF employees as part of amending the law governing the export credit agency. Workers at EKF can now be severely punished - including up to two years in prison - if they break this confidentiality. In 2017, EKF withdrew its export guarantee for the project, citing environmental standards, but a 2016 freedom of information request to the Danish Ministry of Foreign Affairs showed that EKF was aware in August 2013 of the risks the mine expansion would pose to the environment, as well as “democratic deficiencies in the Armenian decision-making and approval process” of the mine. The amendments seem to overrule Denmark’s environmental information legislation, in order to benefit EKF’s business activities. EKF and other companies have an obligation under the UN Guiding Principles on Business and Human Rights to avoid harm against people and the environment and, if damage occurs, ensure compensation to those affected. An internal 2019 report by the European Union Delegation to Armenia stated that Lydian International and the US and UK and governments have pressured Armenia over local protests which stopped construction of another controversial gold mining project. EKT is also subject to the OECD's Common Approaches which address the potential environmental and social impacts of ECA supported projects.

https://www.opendemocracy.net/en/odr/environmental-destruction-armenia-fight-tra...


Mozambique’s ECA backed multi-billion dollar gamble on LNG

(Climate Change News, London, 10 July 2020) A decade after prospectors struck gas off Cabo Delgado, northern Mozambique, a consortium led by Total is signing contracts worth $16 billion to exploit it. One of the biggest investments in Africa, the project to extract, liquefy and export gas raises the hope of catapulting Mozambique, one of the poorest countries in the world, to middle income status by the mid-2030s. But it is a gamble, coming as the coronavirus pandemic hits gas demand and economic growth worldwide. The bet can only pay off on a dangerously overheated planet. High rollers from around the world are backing France's Total, including would-be climate champions. The UK is reportedly supporting the project through its export credit agency, even as it urges leaders to bring more ambitious climate pledges to the Cop26 summit it hosts next year. ECAs participating in the financing include the US EXIM (US$4.7B), JBIC (US$3B), NEXI, UKEF (US$1.15B), SACE, South Africa's ECIC, Atradius and EXIM Thailand. In addition 19 commercial banks and the African Development Bank (AfDB) have committed support. ECAs typically link lending to domestic benefits - the US’ EXIM Bank provided $4.7 billion, which it said would support 16,700 jobs in the US over five years. The UKEF lending said its financing would provide more than 2,000 jobs in the UK and sustain a number of businesses. Global Witness’ senior climate campaigner Adam McGibbon said the UK government’s support for fossil fuels overseas, while claiming to take action on the environment, “is nothing but climate hypocrisy. "It makes a mockery of the idea of the UK as a climate leader,” said Friends of the Earth. According to The Times UK Prime minister Boris Johnson was reported as being “pretty furious”, adding that business secretary Alok Sharma and foreign secretary Dominic Raab have criticised the UKEF lending. The newspaper cited concerns that UKEF was operating without “proper ministerial oversight”.

https://www.climatechangenews.com/2020/07/10/gas-curse-mozambiques-multi-billion...


Serious concerns’ raised over UKEF by Spotlight on Corruption

(CITY AM, London, 6 July 2020) A report released today by Spotlight on Corruption found that UKEF is supporting sectors prone to corruption as part of its post-Brexit export drive. UKEF gave support worth £4.4bn to 339 companies over the past year. More than half of UKEF’s priority markets rank in the bottom 50 per cent of corruption indices, including infrastructure and defence in countries that are at a high risk for corruption, the report found. The report assesses the lessons from recent corruption scandals involving UKEF backed companies. On July 31st a British government committee launched a fresh inquiry into the activities of UK Export Finance (UKEF), following criticism of the agency’s project choice, target-setting and lack of user-friendliness. Exporters are being asked to contribute their views on UKEF here with a deadline of Friday 25 September.

https://www.cityam.com/serious-concerns-raised-over-governments-export-credit-ag...


EDC’s role in Canada's oil and gas bailout

(Above Ground, Ottawa, 22 July 2020) Canada’s oil and gas sector could receive billions of dollars in public financial aid as a result of Ottawa’s COVID-19 economic response package. The new sums are in addition to the billions of dollars in routine loans and other supports that the industry receives annually through federal export bank Export Development Canada (EDC), which has been given a significant role in delivering this new federal aid. Above Ground, Environmental Defence and Oil Change International have submitted a joint brief to the Senate and House of Commons finance committees that are studying the COVID-19 response measures. The submission outlines EDC’s role in Ottawa’s oil and gas bailout and makes recommendations to align the government’s economic support measures with Canada’s climate commitments. The UN has warned of catastrophic consequences if the world, and particularly G20 countries, do not dramatically upscale their decarbonization efforts to achieve a 55% cut in global emissions within the decade. With Canada on track to widely miss its inadequate 2030 emissions target, it is more urgent than ever for Ottawa to impose robust climate conditions on all forms of federal aid. This aid must serve to accelerate, rather than delay, the transition to a low-carbon economy. Mary Robinson, former President of Ireland and Chair of The Elders, in a July 29 Globe and Mail article, notes that Canada commits more public financing to support fossil fuels than any G20 country other than China, an average US$10.6-billion of annual support to oil and gas firms via Export Development Canada.

https://aboveground.ngo/submission-to-parliament-highlights-edcs-role-in-oil-and...


Ditch Public Financing of Fossil Fuels

(Common Dreams, Portland, 6 July 2020) In an open letter to Emmanuel Macron and Rémy Rioux Common Dreams notes that France is embarking on an important diplomatic effort this November, bringing together 450 global development banks that control $2 trillion in public money. The objective? For public funders to declare that their contribution to the economic recovery from COVID-19 will support climate, sustainable development, and biodiversity goals. However, vague commitments to goals already agreed by governments worldwide will not be sufficient to make the “Finance in Common Summit” a success. The world needs concrete action. G20 governments provide over $77 billion in public finance for fossil fuel projects each year. For example, Canada, the ​second-largest financier​ of fossil fuels in the G20 (per capita, it’s the highest), has given government-backed EDC a major role in the COVID-19 response through two major financing programs that ​specifically prioritise the fossil fuel industry, without clarity on a financial ceiling for these programs. And while the UK government is allegedly working on a policy to exclude oil and gas from ECA financing, the Prime Minister’s office last week agreed to put UKEF money into an LNG terminal in Mozambique, spearheaded by France’s Total. This clearly undermines the UK’s efforts to position itself as a climate leader in the lead up to COP26.

https://www.commondreams.org/views/2020/07/06/build-back-better-we-must-ditch-pu...


ECAs and the Aviation Industry: What Does the Future Hold?

(JSUPRA, Sausalito, 16 July 2020) The use of Export Credit Agency (ECA) financing in the aviation industry has ebbed and flowed over the years, and it is often during turbulent times that it has proved to be most popular. Given the current COVID-19 pandemic and the unprecedented downturn experienced by the aviation industry, it is very likely that there will be an increase in the use of ECA financing in the near future. A typical ECA financing structure for the purchase of an aircraft will involve an 85% loan from a syndicate of ECA-supported banks, and such loans will be guaranteed by one or more ECAs. The unfinanced portion of the aircraft's cost will usually be an equity contribution (and where made by way of loan, fully subordinated to the ECA loan). ECA activity tends to be countercyclical: During economic downturns when banks and other lending institutions are reluctant to provide finance, ECA activity accelerates. By way of example, between 2009 and 2012, EXIM helped finance roughly 30 percent of all Boeing's commercial aircraft deliveries. EXIM received its reauthorization in December 2019 after losing it in 2015 — so it was effectively dormant for a 4.5-year period — while ECA activity for Airbus was curtailed as a result of a 2016 UK Serious Fraud Office (SFO) investigation relating to irregular payments by Airbus to intermediaries.

https://www.jdsupra.com/legalnews/export-credit-agency-financing-and-the-16661/


80% of Hong Kong Security Law Backers at the U.N. Are Belt and Road Signatories

(National Review, New York, 7 July 2020) At least 43 of the 53 countries supporting China’s new sweeping Hong Kong security law have made deals with the Chinese Communist Party under its global Belt and Road infrastructure project, which aims to pump trillions of dollars, much of it through ECAs, into countries for infrastructure projects to complete a “New Silk Road” by 2049.

https://www.nationalreview.com/news/over-80-percent-of-hong-kong-security-law-ba...


Japan’s plan to curb coal plant lending has major “loopholes”

(Global Trade Review, London, 15 July 2020) The Japanese government has tightened its lending criteria for overseas coal-fired power plants, including that it will not provide financial support for any host country that does not have a decarbonisation policy. However, it will continue supporting coal projects if they use highly efficient technologies, and plants that it has already committed to will still go ahead, locking in fossil fuel-based energy for decades. Singapore's business press The Asset notes that Japan generates around 32% of its electricity from coal, with Australia being its main supplier. It is also a major importer from Indonesia, Russia, the United States and Canada. Around 17% of Japanese power generation comes from solar and wind power. Japan has vast requirements for imported coal, oil and gas, and given its lack of resources, does not intend to fully phase out coal. However, local media report that around 100 out of 140 coal-fired facilities will be taken offline between now and 2030. The move marks a partial shift away from Japan’s strong official backing for coal but includes exemptions, leaving some non-governmental organizations sceptical about how much impact the new approach will have.

https://www.gtreview.com/news/sustainability/japans-plan-to-curb-coal-plant-lend...


HSBC arranges first Green ECA loan in Saudi Arabia

(Zawya, Dubai, 26 July 2020) The proceeds of the loan, which is the first Green ECA loan in Saudi Arabia, are being used to purchase buses from Germany for Saudi Arabia's public transport network. The buses will help reduce the greenhouse gas emissions and air pollution as well as alleviate traffic congestion in the metropolitan Riyadh area through a shift towards public transportation. The loan documentation confirms a commitment to report on positive environmental impacts of the underlying project. In recognition of the use of proceeds and reporting features of the facility, it is compliant with the “Green Loan Principles”, published by the Loan Market Association on 21 March 2018. This loan is supported by Germany's Euler Hermes.

https://www.zawya.com/mena/en/press-releases/story/HSBC_arranges_first_Green_Exp...


Portugal launches plan to boost exports hit by pandemic

(Reuters, Lisbon, 24 July 2020) Portugal's government has launched a plan aimed at boosting its export sector to alleviate the impact of the coronavirus pandemic, with a goal of increasing exports to 53% of gross domestic product by 2030 from 44% last year. Last year, exports of goods and services rose 4.3% to a record of 93.5 billion euros ($108.5 billion), representing 44% of GDP. However, the coronavirus pandemic has already led to an abrupt drop in exports, with the country's central bank predicting they will fall around 25% in 2020, mainly because tourism collapsed due to lockdowns and the absence of holidaymakers.

https://wkzo.com/news/articles/2020/jul/24/portugal-launches-plan-to-boost-expor...


Finveram warns of 2020 loss due to coronavirus

HELSINKI, July 1 (Reuters, Helsinki, 1 July 2020) Finland’s export credit and financing agency Finnvera warned on Wednesday of a loss for 2020, citing expected credit losses due to the spread of the new coronavirus. “The coronavirus pandemic causes exceptional uncertainty in the outlook,” Finnvera said in a statement. In 2018 and 2019 Finnvera reported an annual operating profit of 100 million euros ($112 million).

https://www.reuters.com/article/health-coronavirus-finland-finnvera/finlands-exp...


What's New June 2020

"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.

If you would like to receive "What's New!" simply add your e-mail to the ECA-Action list at www.eca-watch.org today! Questions?

Email info-at-eca-watch.org

See all "What's New!" updates since 2005 here.

  • ECA-Watch finds EU ECA compliance reviews insufficient
  • ECA Watch briefing on COVID-19 and Climate
  • EU Council adopts exceptional rules to facilitate ECA lending under Covid
  • France moves to save aerospace sector via ECA spending
  • Export-Import Bank Back To Boosting Boeing
  • UKEF set to back Total's $20 billion Mozambique LNG project
  • Hard-hit Canadian oil companies still waiting for EDC loans
  • EDC lifeline to Saudi armoured car maker raises questions
  • Canada now second to China in public finance for fossil fuels
  • Canada undermining its own climate goals via EDC support of pipelines
  • Fossil fuel companies dominate UK Export Finance energy hospitality gifts
  • Britain's National Grid gets $743 mln ECA secured loans for UK-Denmark power link
  • UK Government Forms £10 Billion Reinsurance Backstop for Trade Credit Insurers
  • Nigeria to build 142 agro-processing centres with Brazilian and Saudi ECAs
  • Latham & Watkins advises on USD 8.3 billion Australian LNG project refinancing
  • Nigeria Secures ECA, Bank & Development Finance for NLNG’s Train 7 Project
  • US Senators Call for Quick Votes on EXIM Nominees
  • Russia's Eximbank opens first correspondent account in Uzbek currency

ECA-Watch finds EU ECA compliance reviews insufficient

(ECA-Watch, Amsterdam, 29 June 2020) As part of continued advocacy with the European institutions on Export Credit Agencies (ECAs), European groups are working to enhance the reporting requirements of the EU ECAs under EU Regulation No 1233/2011.

The Regulation requires that the European Commission produce an annual evaluation "regarding the compliance of ECAs with Union objectives and obligations", specifically the "external action" obligations set out in Articles 3 and 21 of the Treaty of the European Union (TEU). These promote, inter alia, the consolidation of democracy, respect for human rights, policy coherence for development and action against climate change

The Commission argues that it is difficult to define a precise benchmark for measuring ‘compliance’ in EU law”. Nonetheless, it has deemed member states compliant on the basis that their ECAs screen projects against the standards laid down in the OECD’s Recommendation of the Council on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (The “Common Approaches”).

This Memorandum argues that the proper benchmark should be the body of EU laws, directive and obligations that enforce the objectives set out in Article 3 and 21 of the TEU.

To date, the Commission has not undertaken any review to identify gaps between the Common Approaches and European legislation of environment and human rights. Yet, without such a gap analysis, claims that compliance with the Common Approaches is an appropriate benchmark for evaluating the compliance of ECAs with EU objectives and obligations lack credibility and constitute maladministration.

To assist the Commission, we have therefore conducted a preliminary gap analysis, comparing the scope of The Common Approaches against the scope of European legislation; and the requirements of the IFC’s Performance Standards (one of the Common Approaches’ recommended international benchmarks) against three key instruments of the European Acquis relating to environmental impact assessment, human rights and climate.

The Memorandum concludes that compliance with the Common Approaches is a wholly insufficient benchmark for evaluating compliance with the EU's External Action obligations.

https://www.eca-watch.org/publications/preliminary-gap-analysis-oecd-common-appr...


ECA Watch briefing on COVID-19 and Climate

(ECA Watch, Washington, 26 June 2020) COVID-19 is a still-unfolding health crisis affecting every economy, putting the health and livelihoods of billions​ at risk. Almost every government has developed response packages that attempt to use all the tools at their disposal to keep their economies afloat and make recovery from the crisis easier and faster. In the haste to respond, sufficient safeguards have not been put in place. One of the tools that governments are using to help their businesses are export credit agencies (ECAs). ECAs -- financial institutions that provide government-backed loans, credits, insurance and/or guarantees for the international operations of corporations from their home country -- have a bad track record when it comes to supporting projects rife with corruption, human rights abuses, and environmental destruction. They have also been the largest source of public finance for fossil fuels. So far, ECA responses to COVID-19 do not include commitments to advance a green transition and seem likely to further prop up the fossil fuel industry and set the transition to renewables back.

https://www.eca-watch.org/publications/ecas-covid-19-and-climate-recommendations...


EU Council adopts exceptional rules to facilitate ECA lending under Covid

(European Council, Brussels, 24 June 2020) The EU is temporarily relaxing banking rules in order to maximise the capacity of banks to lend money and support households and businesses to recover from the COVID-19 crisis. The banking package adopted today provides targeted and exceptional legislative changes to the capital requirements regulation (CRR 2). These changes will allow credit institutions to fully play their role in managing the economic shock that stems from the COVID-19 pandemic by fostering credit flows. The preferential treatment of non-performing loans guaranteed by ECAs will be extended to other public sector guarantors.

https://www.consilium.europa.eu/en/press/press-releases/2020/06/24/covid-19-coun...


France moves to save aerospace sector via ECA spending

(Reuters, Paris, 9 June 2020) France launched what it billed a 15-billion-euro ($17 billion) support plan for its aerospace industry on Tuesday, accelerating research on a green jetliner and warning 100,000 French jobs could be lost due to the coronavirus crisis. The plans - which include 7 billion euros of aid already awarded to Air France and bring forward some defence spending - involve a joint effort by government and industry to keep French jobs and prepare the next generation of civil jets. “We must save our aerospace industry,” Finance Minister Bruno Le Maire said, adding Europe - championed by Airbus - would not sacrifice its place on the world market to U.S giant Boeing or China’s upcoming planemaking competitor COMAC. The move comes after Boeing called for tens of billions in loan guarantees to help U.S. suppliers. Both Airbus and Boeing buy parts in each other’s home markets and fragile suppliers are seen as an Achilles heel as manufacturers weather the crisis. France said it had agreed with Britain, Germany and Italy a one-year moratorium on repayment by airlines of aircraft delivery loans backed by export credit agencies - a move worth 1.5 billion euros. The system of export credits allows airlines with weak balance sheets to raise bank funds as though they had the same creditworthiness as governments of aircraft-producing nations. It was heavily used on both sides of the Atlantic to smooth exports during the 2008-9 financial crisis but has had a limited role in tackling the coronavirus crisis so far because the problem is mainly one of collapsing worldwide demand.

https://af.reuters.com/article/commoditiesNews/idAFL8N2DM1I5


Export-Import Bank Back To Boosting Boeing

(Aviation Week, London, 15 June 2020) The U.S. Export-Import Bank (EXIM) is back in the business of supporting Boeing and General Electric (GE)—leading aerospace and defense companies that served as the face of alleged corporate welfare to anti-bank critics in recent years. Last week, EXIM said it would guarantee $459 million, or 90%, of a $510 million loan for Credit Agricole and an “investment bank” to purchase accounts receivable from CFM International—a joint venture of GE and Safran—due from Boeing. The proposed one-year purchase facility would support an estimated $3 billion in export sales of aircraft engines and an estimated 11,200 total direct and indirect jobs throughout the U.S. supply chain, including 1,180 jobs at CFM/GE positions across Indiana, North Carolina and Ohio, according to EXIM.

https://aviationweek.com/air-transport/aircraft-propulsion/us-export-import-bank...


UKEF set to back Total's $20 billion Mozambique LNG project

(Reuters, Johannesburg/London, 26 June 2020) Britain’s export credit agency UK Export Finance (UKEF) is set to back around $800 million of a $20 billion (£16 billion) liquefied natural gas (LNG) project in Mozambique led by French energy major Total. Campaigners say such projects lock in harmful emissions for the foreseeable future and hurt often impoverished local communities, especially in countries with a history of corruption, like Mozambique. They say they are out of step with commitments under the 2015 Paris Agreement, signed by almost 200 countries. “By backing this massive fossil fuel project, the UK would undermine their credibility as they prepare to host the UN climate negotiations next year,” said Alex Doukas of Oil Change International.

https://www.reuters.com/article/uk-total-mozambique-lng-idUKKBN23X2GX


Hard-hit Canadian oil companies still waiting for EDC loans

(Reuters, Winnipeg/Toronto, 4 June 2020) Canadian oil producers sideswiped by economic damage from the coronavirus pandemic have received no federal loans from EDC, seven weeks after the first lending program was announced, government and industry officials said on Thursday. The large-employer program started accepting applications on May 20 and has not approved any yet, confirmed Maeva Proteau, spokeswoman for Finance Minister Bill Morneau. Liquidity for smaller energy companies via Canada’s export credit agency, Export Development Canada (EDC), will begin flowing within weeks, she said. EDC said in April it would backstop up to 75% of a reserve-based bank loan, to a maximum of C$100 million, for at least one year.

https://af.reuters.com/article/commoditiesNews/idAFL1N2DF188


EDC lifeline to Saudi armoured car maker raises questions

(Globe and Mail, Toronto, 7 June 2020) The federal government tapped a seldom-used account at Ottawa’s export-financing agency last fall to extend $650-million of support to the US defence contractor building combat vehicles for Saudi Arabia, aid that came as Riyadh was falling behind on payment for these machines. During 2019, parent company General Dynamics Corp. disclosed publicly that the Saudis had been tardy in making payments on the LAV deal. Transactions made through the Canada Account are backstopped by the federal treasury rather than EDC itself. Ottawa has previously used the EDC Canada Account to bail out the auto industry, help a Quebec shipbuilder, spur civilian aircraft exports by aerospace companies, and to buy the Trans Mountain pipeline. Earlier this spring, the Canadian government said it resumed approval of new permits for military exports to Saudi Arabia. Global Affairs said the loan was needed to “maintain and support thousands of jobs not only in Southwestern Ontario but also across the entire defence industry supply chain. An NDP MP said his party does not support the sale of armoured vehicles to Saudi Arabia, which human-rights groups say are being used by the Saudis in its war in Yemen, while Conservative MP Peter Kent decried the lack of forthrightness over lending $650-million to a major U.S. arms manufacturer.

https://www.theglobeandmail.com/canada/article-ottawas-lifeline-to-saudi-lav-mak...


Canada now second to China in public finance for fossil fuels

(Above Ground, Ottawa, 15 June 2020) A recent report from Oil Change International and Friends of the Earth U.S. reveals that Canada has become the second-largest public financier of fossil fuels in the G20, second only to China. On a per-capita basis, Canadian public finance for fossil fuels between 2016 and 2018 was the highest in the world. Nearly all of this support came from federal agency Export Development Canada (EDC). These findings bolster growing public concern about EDC’s support for fossil fuels, which has intensified since Ottawa tasked the agency with shepherding additional aid to the oil and gas industry in response to the COVID-19 crisis. The range of voices calling for Canada to redirect its export finance into low-carbon industries now includes lawmakers, civil society organizations and, as we detail below, sustainability experts. As Parliament prepares further stimulus measures in the coming months, it must ensure that Canada’s economic recovery serves to accelerate rather than delay the transition to a low-carbon future.

https://aboveground.ngo/expert-analysis-lays-out-reforms-for-decarbonizing-canad...


Canada undermining its own climate goals via EDC support of pipelines

(National Observer, Ottawa, 10 June 2020) International Trade Minister Mary Ng says she expects transparency and accountability from a key federal Crown corporation, after a new report concluded Canada is undermining its own climate goals by allowing EDC to support fossil fuel projects such as the Coastal GasLink pipeline. In a report released Tuesday, sustainable development consulting firm Horizon Advisors recommended that the government legally bar EDC from supporting any fossil fuel energy projects, “including new fossil fuel infrastructure” such as pipelines, and that the agency should “stress-test its investment decisions against Canada’s climate targets.” EDC signed an agreement in April to loan potentially hundreds of millions of dollars to help Coastal GasLink, the controversial pipeline from the Dawson Creek area to Kitimat B.C. that was the subject of protests and rail blockades earlier this year after RCMP raided Wet’suwet’en Nation territory.

https://www.nationalobserver.com/2020/06/10/news/canada-undermining-its-own-clim...


Fossil fuel companies dominate UK Export Finance energy hospitality gifts

(Global Witness, London, 12 June 2020) UKEF have been in the spotlight more and more over the last year for their disproportionate support for the fossil fuel industry. Last year, UKEF provided nearly £2 billion in taxpayer support for fossil fuel projects all over the world.  Despite dozens of MPs, two high-profile Parliamentary inquiries and one former UN Secretary-General calling on UKEF to stop funding fossil fuels, the Government continues to ignore calls for change. It has just been revealed that 96% of the gifts and hospitality accepted by UKEF in the past 20 years related to the energy sector were paid for by major fossil fuel companies, including Saudi Arabia’s state-owned oil business Saudi Aramco and Gazprom, which is owned by the Russian government.

https://www.globalwitness.org/en/campaigns/climate-breakdown/fossil-fuel-compani...


Britain's National Grid gets $743 mln ECA secured loans for UK-Denmark power link

(Reuters, London, 16 June 2020) Britain’s National Grid has secured a $734 million loan to help finance the development of the 2 billion euro ($2.26 billion) power link it is building between Britain and Denmark. The multi-export credit agency covered green loan is made up of $488 million from SACE Export Credit and $255 million from Euler Hermes Export Credit.

https://af.reuters.com/article/commoditiesNews/idAFL1N2DT0D8


UK Government Forms £10 Billion Reinsurance Backstop for Trade Credit Insurers

(Insurance Journal, San Diego, 4 June 2020) The UK government has created a £10 billion (US$12.5 billion) reinsurance scheme designed to help businesses during the COVID-19 pandemic by guaranteeing transactions insured by trade credit insurers. The Trade Credit Reinsurance scheme is designed to support UK business-to-business transactions by maintaining credit insurance protection against customer defaults or payment delays. Euler Hermes explained the scheme is expected to cover 90% of B2B trade credit insurance transactions for UK-domiciled businesses. To protect businesses that the private credit market cannot insure, the Treasury noted that export credit insurance is also available from UK Export Finance to cover exports to 180 countries. The UK’s Trade Credit Reinsurance scheme follows similar state-backed support being developed in Canada and other European countries such as Germany, France and the Netherlands.

https://www.insurancejournal.com/news/international/2020/06/04/571043.htm


Nigeria to build 142 agro-processing centres with Brazilian and Saudi ECAs

(Aairmetrics, Lagos, 21 June 2020) Nigeria has announced plans to develop 142 agro-processing centres across the six geopolitical zones in the country. The projects will be funded by the “Green Imperative” programme, a $1.2 billion joint Nigerian-Brazilian agriculture development scheme. The $1.2 billion programme is to be implemented over a period of 5-10 years with finding from the Development Bank of Brazil (BNDES) and Deutsche Bank with Insurance provided by Brazilian Guarantees, Funds Management Agency (FMA), the Saudi Islamic Corporation for Insurance of Export Credit (ICIIEC) of the Islamic Development Bank (ISDB) and coordinated by the Getulio Vargas Foundation.

https://nairametrics.com/2020/06/21/nigeria-to-build-142-agro-processing-centres...


Latham & Watkins advises on USD 8.3 billion Australian LNG project refinancing

(ICLG, London, 23 June 2020) A syndicate of company bank lenders and ECAs have enlisted Latham & Watkins to act as legal counsel in refinancing approximately USD 8.3 billion for one of the world’s largest oil and gas projects, in Australia. The development, named the Ichthys liquefied natural gas (LNG) project, is the product of a joint venture between the project’s operator, INPEX, and major partner Total, as well as seven others, CPC Corporation Taiwan, Tokyo Gas, Osaka Gas, Kansai Electric Power, JERA and Toho Gas. A final investment decision for the project was reached eight years ago, followed by the development stage, which started in July 2018. Importantly, the refinancing will release INPEX and its eight joint venture counterparts, from completion guarantee obligations it has to the lenders of the project. An estimated 70% of the LNG produced by the Ichthys LNG project is planned to be exported for use by Japanese customers, and, via the project, INPEX is poised to support efforts to supply Taiwan and Japan with energy.

https://iclg.com/ibr/articles/13587-latham-and-watkins-advises-on-usd-8-3-billio...


Nigeria Secures ECA, Bank & Development Finance for NLNG’s Train 7 Project

(Oil & Gas Republic, Lagos, 1 June 2020) Nigeria LNG Limited (NLNG) has secured $3 billion for the development of its Train 7 project. According to the company, the $3 billion is corporate financing from a group of 31 investors, building investor’s confidence in Nigeria’s oil and gas industry. The investment will also be supported by substantial cash flows from NLNG’s existing Six Train LNG plant. The lenders include three export credit agencies, Export-Import Bank of Korea (KEXIM), Korea Trade Insurance Corporation (K-SURE) and Servizi Assicurativi del Commercio Estero (SACE); two regional development finance institutions: African Export-Import Bank and Africa Finance Corporation; 16 international commercial banks under an international commercial facility tranche; and 10 Nigerian commercial banks, under a Nigerian commercial facility tranche.

http://oilandgasrepublic.com/templars-provides-innovative-financing-framework-fo...


US SENATORS CALL FOR QUICK VOTES ON EX-IM NOMINEES

(Politico, Washington, 24 June 2020) Senate Banking Chairman Mike Crapo (R-Idaho) and ranking member Brown on Tuesday called for full chamber votes on two languishing nominations for the Export-Import Bank's board of directors: Paul Shmotolokha, a Republican, and Claudia Slacik, a Democrat. “If you say you are concerned about China, you should support filling Ex-Im’s board so our manufacturers can better compete with China,” Brown said at a committee oversight hearing with Ex-Im President and CEO Kimberly Reed. Competing with Beijing: China, whose “export finance activity is larger than all the other export credit agencies in the G-7 combined,” according to Ex-Im, continues to be one of the biggest competitors.

https://www.politico.com/newsletters/morning-trade/2020/06/24/commerce-launches-...


Russia's Eximbank opens first correspondent account in Uzbek currency

MOSCOW, June 4. /TASS/. Eximbank of Russia, a part of of the Russian Expo Center Group, opened the first correspondent account in Uzbek currency for Russian banks, at the same time opening several accounts in rubles for Uzbekistan's banks, which is aimed at expanding the capabilities of exporters and importers of the Russian products, the Russian Export Center (REC) announced on Thursday.

https://tass.com/economy/1164545


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