(Global Trade Review, London, 10 April 2024) Export credit agencies (ECAs) in the world’s largest economies are still pumping billions of dollars more annually into fossil fuels than clean energy projects, fresh data shows, spurring calls for reform within the OECD Arrangement. ECAs in the G20 group of nations provided US$96bn towards fossil fuel projects between 2020 and 2022, finds a report published this week by campaign groups Oil Change International and Friends of the Earth. The US$32bn per year supplied by these institutions represents a 20% drop compared to the US$40.1bn yearly average from 2018 and 2020, figures show, highlighting efforts to reduce fossil fuel exposures. Yet the volume of ECA financing directed towards fossil fuels is still six times larger than that allocated to clean energy, which averaged US$5bn annually during this same period.
https://www.gtreview.com/news/sustainability/ecas-continue-to-favour-fossil-fuel...
(Both Ends, Utrecht, 4 April 2024) The EU ECA fossil fuel phase-out tracker sheds light on the concerning lack of harmony between EU Member States' export credit climate policies. The report was updated on April 17th, following new responses by Member States on their respective policies. Despite increasing global efforts towards sustainability, export credit agencies (ECAs) play a key role in providing loans, guarantees and insurance backed by public budgets to companies from their countries, including polluting industries. At present, ECAs continue to be the world’s largest international public financiers of fossil fuels, sorely misaligned with climate goals. In March 2022, during the French Presidency of the Council of the EU, Member States made a crucial commitment to end public finance through ECAs for fossil fuel energy projects by the end of 2023. Recent findings reveal that half of the 23 EU member states with ECAs are fulfilling their commitments, while the others lag behind. Our findings show that only eight EU Member States, such as Denmark, France and the Netherlands, have fully implemented policies to phase out public support for fossil fuel projects. Conversely, five countries, including Bulgaria, Estonia, Lithuania, Poland and Portugal, have no formal policy but claim not to finance such projects. However, a worrying trend is emerging, with 10 Member States failing to honour their commitments. Some, such as Croatia, the Czech Republic and Greece, have yet to establish a policy to phase out export credit support for fossil fuels. Others, such as Austria and Italy, have published policies that are not in line with climate science and the mandatory 1.5°C pathway.
https://www.bothends.org/en/Whats-new/News/EU-ECA-fossil-fuel-phase-out-tracker-...
(Price of Oil, Washington, 9 April 2024) This new report, “Public Enemies: Assessing MDB and G20 international finance institutions’ energy finance” looks at G20 country and MDB traceable international public finance for fossil fuels from 2020-2022 and finds they are still backing at least USD 47 billion per year in oil, gas, and coal projects. The findings reveal that the wealthiest G20 nations are the primary culprits behind continued investments in fossil fuels, with Canada, Korea, and Japan emerging as the worst offenders. The report also highlights where there has been momentum to end international public finance for fossil fuels, finding that if countries keep their existing commitments to end not only coal finance but also oil and gas finance, it would shift $26 billion annually out of fossil fuels by the end of 2024. Download the 38 page Report
https://priceofoil.org/2024/04/09/public-enemies-assessing-mdb-and-g20-internati...
(Friends of the Earth Japan, Tokyo, 26 April 2024) From the straits of the Philippines to the coasts of the United States, Japan’s fossil fuel financing is harming the environment, climate, and communities at a time when the world is reeling from the ever-intensifying heat waves, floods, droughts, and typhoons brought by the climate crisis. While the world must phase out fossil fuels, as affirmed by the outcomes of COP28, Japan continues to funnel billions of dollars to liquefied natural gas (LNG) projects through its public institutions like the Japan Bank for International Cooperation (JBIC). In Southeast Asia alone, JBIC provided USD 3.31 billion to LNG projects that harm communities, derailing the region’s just transition to renewable energy. The Natural Resources Defense Council notes that "Japan stands out as one of the world’s top providers of public finance for gas, and the world’s largest provider of international public finance for LNG export capacity, providing $39.7 billion for projects built from 2012 onwards. Just in the two weeks ahead of Kishida’s meeting with Biden, Japan approved over $2.7 billion in financing for new gas projects, such as the controversial gas field in Australia, Block B gas project in Vietnam, the San Luis Potosi and Salamanca gas plants in Mexico, and financing to import LNG."
https://foejapan.org/en/issue/20240426/17259/
(Natural Resources Defense Council, New York, 15 April 2024) In 2021, President Biden committed to increase U.S. international climate finance to over $11.4 billion per year by 2024. Of this, $3 billion per year was committed to investments in adaptation—historically underfunded—as part of the President’s Emergency Plan for Adaptation and Resilience. f delivered, this vital funding would spur much-needed emissions reductions in other countries, help the most vulnerable communities who have done the least to contribute to the climate crisis to adapt to its mounting impacts, and protect Americans and people around the world against the physical, economic, and security threats of climate change. It would also reinvigorate U.S. climate leadership, rebuilding trust with developing countries and catching up with other G7 countries who provide much more climate finance relative to their wealth. In mid-March, Congress finally passed the relevant spending bill for Fiscal Year 2024. It contained just $1 billion in dedicated funding for international climate programs. This is the third year in a row that Congress has failed to sufficiently deliver on U.S. international climate finance commitments. Just $1 billion in a spending package totaling $1.59 trillion sends a damaging message to the rest of the world.
https://www.nrdc.org/bio/joe-thwaites/how-us-can-still-meet-its-global-climate-f...
(Dispatch, Kampala, 5 April 2024) Uganda’s presidency confirmed that China has extended an invitation to Uganda’s Energy minister to visit Beijing for discussions on the country’s $5 billion 1,445-km (898-mile) crude oil pipeline project. This development offers hope for progress in Uganda’s efforts to secure Chinese financing for the pipeline, crucial for kickstarting crude production from oilfields discovered back in 2006. The potential involvement of Chinese funding gains significance as Western banks have refrained from financing the project following pressure from environmentalists, citing concerns over its impact on global carbon emissions. Prior discussions between Uganda and the Chinese export credit agency SINOSURE regarding potential funding for the project had been ongoing. However, several deadlines for concluding these talks had passed without reaching a resolution. Meanwhile, construction activities for the pipeline have commenced, involving the transportation of pipes and other materials to designated sites in both Tanzania and Uganda.
https://www.dispatch.ug/2024/04/05/china-invites-uganda-for-talks-on-crude-oil-p...
(Global Trade Review, London, 17 April 2024) Financial backers are continuing to assess whether they should reaffirm their support for a multi-billion-dollar LNG project in Mozambique as operator Total looks to restart work. The project was suspended in 2021 after insurgents known as the Islamic State Mozambique attacked Palma, a town in the northern province of Cabo Delgado. Total declared force majeure and withdrew its staff from the nearby Afungi project site. But earlier this year, the French energy major announced its intention to restart the project, meaning its financial partners are also expected to confirm their commitment. A coalition of 124 civil society groups, including BankTrack and Friends of the Earth, have called on financial backers to reconsider their support of the project and urged them to withdraw their funding due to “the continuation of insurgent attacks and the failure of the Mozambican government and TotalEnergies to tackle the drivers of the conflict”. They also cite “ongoing human rights violations” and “irreversible climate and environmental impacts” as reasons to end support. The project is backed by a range of public and private financial institutions, including eight export credit agencies (ECAs) and 15 commercial banks. The ECAs involved are the Export-Import Bank of the United States (US Exim), UK Export Finance (UKEF), the Export-Import Bank of Thailand, Italy’s Sace, Japan’s Nippon Export and Investment Insurance (Nexi), the Export Credit Insurance Corporation of South Africa (ECIC), Atradius DSB of the Netherlands and the African Export-Import Bank (Afreximbank).
https://www.gtreview.com/news/africa/ecas-continue-to-debate-fate-of-mozambique-...
(SACE, Rome, 19 April 2024) The leaders of official export credit agencies from the G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom, and the USA – met on April 16th, in Tokyo, hosted by Nippon Export and Investment Insurance (NEXI), to discuss recent business trends and challenges. In the light of the increasing global geopolitical risks, the G7 ECA Heads have reaffirmed their role in protecting and promoting international trade and investment, and have recognised the importance of risk management for ECAs. The G7 ECA Heads recognise the need to enhance resilience to the impacts of climate change and to support businesses in responding to global climate issues. Acknowledging the need for urgency, the G7 ECA Heads agree to continue to proactively engage in a review of climate-related provisions under the framework of the OECD Arrangement and the Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence. The G7 ECA Heads acknowledge the important role that ECAs continue to play in supporting their own exports and foreign investments and confirm that now, a variety of roles are expected, including promoting inclusive and sustainable trade and investment in developing countries, emerging markets and more established economies, and contributing to the realization of various policy agendas of their respective governments. In particular the G7 ECA Heads underlined their commitment to supporting Ukraine and reaffirmed their role in mobilizing private sector funds, and to continue this dialogue at the next Ukraine Recovery Conference on 11 June 2024 in Berlin.
https://www.sace.it/en/media/press-releases-and-news/press-releases-details/head...
(Reuters, Washington, 14 April 2024) The U.S. Export-Import Bank's board on Thursday voted to approve a new tool aimed at boosting U.S. manufacturing, strengthening closing critical supply chain gaps, and supporting American jobs, the U.S. official export credit agency said. The Make More in America initiative will allow companies to tap existing medium- and long-term loans and loan guarantees for export-oriented domestic manufacturing projects as part of President Joe Biden’s push to bolster U.S. supply chains.
https://ca.movies.yahoo.com/movies/u-exim-bank-approves-more-161321305.html
(JDSUPRA, Sausalito, 16 April 2024) The U.S. Export-Import Bank (EXIM) is among the most impactful government agencies when it comes to helping U.S. companies compete for business internationally, finance domestic manufacturing, and build resilient supply chains. Up until 2019, EXIM policies and products were little changed despite the U.S. economy evolving dramatically away from traditional manufacturing to a technology and services-dominated economy. As a result, EXIM users are calling for EXIM to be more relevant and adaptable to our 21st-century economy. Lawmakers are hearing these calls and becoming more receptive to EXIM reform. For example, in 2019, Congress gave EXIM a mandate to bolster U.S. company competitiveness concerning China. EXIM users applauded. More reforms are under consideration in Washington.
https://www.jdsupra.com/legalnews/proposed-exim-export-import-bank-5462317/
(Global Trade Review, London, 4 April 2024) Global commodity trader Trafigura has secured a US$560mn facility from Japan’s export credit agency and SMBC that will fund the delivery of natural gas to the East Asian country. The transaction, signed on March 27, comprises a US$390mn loan from the Japan Bank for International Cooperation (JBIC) alongside co-financing from SMBC worth approximately US$170mn. The deal, the latest in a spate of export credit agency (ECA)-backed transactions for major commodities traders, will finance the import of liquefied natural gas (LNG) into the Japanese market.
https://www.gtreview.com/news/asia/trafigura-bags-us560mn-eca-backed-deal-to-sup...
(GK Today, India, 27 April 2024) REC Ltd, a Maharatna Central Public Sector Enterprise (CPSE) and leading Non-Banking Financial Company (NBFC) under the Ministry of Power, Government of India, has successfully availed a green loan of Japanese Yen (JPY) 60.536 billion (approximately Rs 3,200 crore) to finance eligible green projects in India. The green loan facility benefits from an 80% guarantee by SACE under their innovative Push Strategy programme. It makes SACE’s first JPY-denominated loan transaction and first green loan in India. The loan saw participation from banks across Asia, US and Europe, including Crédit Agricole CIB, Bank of America, Citibank, KfW IPEX-Bank and Sumitomo Mitsui Banking Corporation as Mandated Lead Arrangers. Credit Agricole CIB is acting as the ECA Coordinator, Green Loan Coordinator, Documentation Bank and Facility Agent.
https://www.gktoday.in/rec-ltd-secures-japanese-green-loan/
(Lexology, London, 4 April 2024) The outlook for the aviation industry in 2024 is more positive than it has been for some years, despite the significant challenges ahead. To fill the subsequent funding gap, the ECAs (and, indeed, the manufacturers themselves) stepped up to the plate, but are now not needed as much. According to Boeing’s Commercial Aircraft Finance Market Outlook 2023, sources of industry delivery financing for 2022 can be broken down as follows: sale and leaseback:18%; cash:54%; capital markets:9%; bank debt:15%; and export credit:4%. ECA-guaranteed loan products covered only about 4% of new aircraft financings in 2019, substantially down from previous years, principally as a result of the restriction of the operations of UX EX-IM Bank and the European ECAs for several years. By the end of 2021, ECA support had increased to 9% of funding for the industry and nearly 5% cent of Boeing deliveries. Primary ECA financing comes from: Brazil: Brazilian Development Bank – supports Embraer; Canada: Export Development Canada – supports Bombardier and Pratt & Whitney; France: Bpifrance – supports Airbus and ATR; Germany: Euler Hermes – supports Airbus; United Kingdom: UK Export Finance – supports Airbus and Rolls-Royce; and United States: Export–Import Bank of the United States (US EX-IM) – supports Boeing, CFM, IAE, GE and Pratt & Whitney.
https://www.lexology.com/library/detail.aspx?g=e28b15e0-39c7-44cb-a9e2-ce495a815...
(Business Standard, Delhi, 11 April 2024) The Ministry of Finance has written to the Reserve Bank of India (RBI) and the Insurance Regulatory and Development Authority of India (Irdai) to monitor export credit availability, and insurance premium increases to help Indian exporters deal with trade disruptions in the Red Sea due to Houthi attacks on cargo ships.
https://www.business-standard.com/india-news/red-sea-crisis-rbi-irdai-called-in-...
(Latinvex, Miami, 24 April 2024) Milbank represented a consortium of export credit agencies and international lenders in connection with the $2.5 billion project financing for the $4.5 billion expansion of the Centinela copper mine in Chile and Mexican lending company MNJ Capital on a $500 million secured credit facility; Clifford Chance advised the lenders on a $500 million secured loan to Colombian investment manager Grupo SURA; Cleary Gottlieb represented Mexican glassmaker Vitro in a $100 million term loan with Netherlands-based ING Bank; Simpson Thacher represented Brazilian technology platform Brandlovrs Inc. in connection with an equity investment round led by Brazilian venture capital firm Kaszek and Arnold & Porter advised Canada-based Vela Industries Group in the acquisition of Chile-based fleet management, machine performance, and telematics software and hardware provider Samtech. Norton Rose Fulbright advises lenders on ECA-backed financing for two new LNG-powered ‘World Class’ cruise vessels for MSC Cruises.
https://latinvex.com/milbank-advises-2-5-bln-chile-project-finance/
(Business Outlook India, New Delhi, 29 April 2024) Escalating geopolitical tensions may have implications for India's exports in the first quarter of 2024-25 as it is likely to impact global demand, says the Federation of Indian Export Organizations. The global uncertainties caused by continuing war between Russia and Ukraine has impacted India's outbound shipments in 2023-24, which recorded a decline of 3.11% to US$437 billion. Imports too dipped by over 8% to US$677.24 billion. Re the impact of the Israel-Iran war certain exporters from engineering sector have stated that the demand for goods that are going to the UAE and then to Iran has come down. "If the global situation continues to be like this, it will impact global demand. In the first quarter numbers, the demand slowdown may be visible," FIEO Director General Ajay Sahai said. Further he asked for continuation of interest equalisation scheme which helps exporters from identified sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters get subsidies under the 'Interest Equalisation Scheme for pre- and post-shipment rupee export credit. "The rates should be enhanced to 3% & 5%" he said. "Due to demand slowdown, offtake of goods will be low so foreign buyers will also take a longer period to make payments. So we require funds for longer period. Exporters also need interest subvention support," Sahai said.
https://business.outlookindia.com/news/geopolitical-tensions-might-threaten-indi...
(Open 4 Business, Kyiv, 20 April 2024) As of April 1, 2024, the Export Credit Agency (ECA) supported Ukrainian exports by UAH 627 million (US$15.8m), which allowed the country’s exporters to attract UAH 99.8 million (US$2.5m) in financing from partner banks in cooperation with the agency, said Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine. “Supporting and developing processing companies that export their products to other countries is one of the priorities of the Made in Ukraine state policy."
https://open4business.com.ua/en/eca-helped-exporting-companies-raise-uah-99-8-ml...
(Yahoo Finance, Washington, 18 April 2024) China late Wednesday called on the United States to end its investigation into its shipbuilding industry, denouncing the probe as a politically motivated "mistake." The official statement from China's Ministry of Commerce was issued hours after U.S. President Joe Biden discussed the investigation during a speech he gave Wednesday at the United Steelworkers headquarters in Pittsburgh, Pa. The unfair practices alleged include policy loans from state-owned banks, equity infusions and debt-for-equity swaps, the provision of steel from state-owned steel producers at below market value, tax preferences, grants and "lavish financing from China's state-owned export credit agencies," among others.
https://ca.finance.yahoo.com/news/china-denounces-u-shipbuilding-probe-082227730...
