ECA Watch Newsletter

What's New August 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.

  • Lexology report: Export Credit Agencies and Insurers
  • How ECAs can catch up on climate action
  • Swedish ECAs establish scientific climate council to help align with Paris Agreements
  • Can China green the Belt and Road?
  • Chinese banks and ECAs stay silent on human rights allegations
  • Australian banks defend coal exit
  • Cost of Hoima-Tanga Pipeline Hits $5b As Risk Averse Supporters Walk Away
  • World Economic Forum warns global trade finance gap could reach $2.5 trillion by 2025
  • Experts Discuss Russia’s Weak Economic Presence in Africa
  • UKEF to forge closer trade ties with Central America
  • Middle East Oil Refinery (MIDOR) in Egypt to start partial operations this year
  • NEXIM: Promoting Social Inclusion With WAYEF
  • UKEF finances 6 hospitals in Ivory Coast

Lexology report: Export Credit Agencies and Insurers

(Lexology, London, 24 August 2021) ASHURST LLP has produced a 12 page overview of official export credit agencies in the EU, OECD, UK and globally, which broadly reviews ECA history, policies, competition, budgets, sector agreements, etc. It notes that as recently as the turn of the century, the OECD Arrangement was understood to cover the vast majority of export credits globally, whereas US EXIM now estimates that in 2019 total activity provided under the rules of the OECD arrangement amounted to only 34% of total export and trade-related finance - approximately US$76 billion. The OECD arrangement is described as a 'gentlemen's agreement' among its participants, seeking to ensure there is not a race to the bottom or a crowding out of private financing options that could lead to public resources subsidising exporters. The participants to the Arrangement claim that, despite its voluntary nature, the international cooperation that regulates ECA operations has been a mainstay of the market for decades, looking to ensure that competition remains on the quality and pricing of goods and services rather than the financing terms, i.e. subsidies. However they admit that the core purpose of ECAs is to promote exports to provide jobs domestically and increase the wealth of the country they originate from. Meanwhile, ECA Watch maintains that monitoring of the implementation of the OECD Arrangement, its sectoral agreements as well as the Common Approaches on social and environmental due diligence for officially supported export credits, remains seriously inadequate. The lack of transparency in the application of due diligence procedures results in official ECA support for multiple projects to contravene international environmental, human rights and other treaties and agreements to which these ECAs' own governments are parties. While a somewhat useful overview of complex ECA agreements and practices, the report neglects the significant contraventions of international rights and the resultant trauma caused by so many official ECA supported projects on people and their families across the globe.

https://www.lexology.com/library/detail.aspx?g=b123cf04-f8b9-4b8f-aa57-f8b525ebb...


How ECAs can catch up on climate action

(Global Trade Review, London, 4 August 2021) Export credit agencies (ECAs) are lagging private financial institutions in setting targets for reaching net zero greenhouse gas emissions and are missing opportunities as the energy transition gets underway. That’s the argument of a University of Oxford paper published last week by a group of five researchers, including experts in trade, law and economics. Former Bank of England governor Mark Carney says in the paper’s foreword that ECAs “are increasingly conspicuous by their absence” in efforts by financial institutions to back a transition away from fossil fuels.
 

https://www.gtreview.com/news/global/export-credit-agencies-can-catch-climate-ac...


Swedish ECAs establish scientific climate council to help align with Paris Agreements

(EKN/SEK, Stockholm, 26 August 2021) The Scientific Climate Council, a group of academic experts, will provide advisory support to EKN and SEK to assist aligning the Swedish export finance system with the Paris Agreement’s 1.5°C goal. The climate council is the first of its kind in the world and will focus on issues such as the role of natural gas for the energy transition in low- and middle-income countries. EKN’s and SEK’s climate transition efforts are at the forefront from a global perspective. Stringent requirements are set for projects that receive guarantees and credits and the Swedish export finance system was one of the first to cease export financing the extraction and transportation of coal.

https://www.ekn.se/en/about-ekn/newsroom/archive/2021/press-releases/ekn-and-sek...


Can China green the Belt and Road?

(China Daily, Beijing, 9 August 2021) The Chinese government issued a policy on July 16 encouraging Chinese businesses to integrate green development through overseas investment and cooperation. The document, titled "Green Development Guidelines for Overseas Investment and Cooperation", was jointly issued by the Ministry of Commerce and the Ministry of Ecology and Environment. The guidelines recommend that Chinese businesses support investments in clean energy and also cover trade, by requiring companies to speed up integration with the global green supply chain, carry out green procurement and purchase environmentally friendly products and services. The guidelines are specifically addressed to some of the most important financial institutions: the China Development Bank, China Import-Export Bank and Sinosure, China's export credit agency. In June this year, the Belt and Road Initiative International Green Development Coalition, ClientEarth and the Beijing Institute of Finance and Sustainability conducted a two-day workshop on environmental and climate risk mitigation with the largest financial institutions in the Belt and Road Initiative. Although the process is not without difficulties, these institutions are developing key policies, such as categorization of projects based on environmental risks, requirements for environmental standards, impact assessments, third-party evaluations, information disclosure and public participation, grievance mechanisms, and even potential fossil fuel exclusion policies.

http://www.chinadaily.com.cn/a/202108/09/WS611066b4a310efa1bd667753.html


Chinese banks and ECAs stay silent on human rights allegations

(Global Trade Review, London, 11 August 2021) Chinese banks have a “dismal” rate of engagement with concerns about the human rights impacts of their overseas investments, a new report says. The London-based Business and Human Rights Resource Centre (BHRRC) says China’s banks, including private, state-owned and development banks, have responded to only one of 20 requests to answer to human rights concerns raised by civil society organisations. BHRRC said that overall, it has recorded 670 allegations of human rights abuses “linked to Chinese business conduct abroad”. Countries where most complaints are recorded are Myanmar, Peru, Ecuador, Laos, Cambodia and Indonesia. China’s banks’ 5% rate of response to BHRRC requests compares to the Asian and global financial sector’s response rate of 63%.

https://www.gtreview.com/news/asia/chinese-banks-stay-silent-on-human-rights-all...


Australian banks defend coal exit

(Global Trade Review, London, 28 July 2021) Australia’s banks have defended their decision to exit the thermal coal sector and pushed back against suggestions from government lawmakers that they be forced to extend financing to fossil fuels. A flurry of exits from thermal coal businesses that began mainly among European banks and export credit agencies has since spread to Asia. Economies such as South Korea and Japan, which are major buyers of Australian coal and natural gas, have now set ambitious carbon reduction targets ahead of the COP26 summit in Glasgow in November. Australia is the world’s largest coal exporter by value, and coal miners are expected to post bumper profits during the full-year reporting season for listed companies in August. The decision has angered lawmakers in the ruling conservative coalition, many of whom represent communities where coal mines and their supply chains are major employers. Submissions to an inquiry on financing for Australian export industries, launched earlier this year by a parliamentary committee on trade and investment and focusing almost exclusively on thermal coal, included suggestions that the government force banks to lend to any business that is operating legally.

https://www.gtreview.com/news/asia/australian-banks-defend-coal-exit/


Cost of Hoima-Tanga Pipeline Hits $5b As Risk Averse Supporters Walk Away

(All Africa, Cape Town, 23 August 2021) The withdrawal by risk averse lenders from the East African Crude Oil Pipeline has seen the cost of the project rise by 30 percent to $5 billion, meaning shareholders will be forced to dig deeper into their coffers to fund it. Shareholders of TotalEnergies raised this question during the annual general meeting in May, and company executives confirmed that increase in cost to $5 billion for a fully completed project, of which $2 billion will be financed through shareholders' equity and $3 billion by external funding.
Last month, the project also suffered another setback after global insurers and export credit agencies, including French multinational AXA, withdrew its support. "The underlying project is not compatible with our climate commitments," AXA wrote in July, while the UK Export Finance also turned down an application for finance, after the UK government ceased financing fossil fuel projects overseas.

https://allafrica.com/stories/202108230143.html


World Economic Forum warns global trade finance gap could reach $2.5 trillion by 2025

(Euro Money, London, 6 August 2021) The World Economic Forum has warned that the global trade finance gap could reach $2.5 trillion by 2025 as large numbers of funding applications continue to be rejected due to lack of collateral or information from the requesting entities. More than half (60%) of the banks that responded to a survey conducted by the Asian Development Bank just prior to the outbreak of the coronavirus pandemic expected an increase in the volume of trade finance requested by importers and exporters but subsequently rejected. Governments around the world have taken a variety of steps to support trade finance since the start of the pandemic, including increasing the capacity of export credit agencies, expanding working capital programmes and introducing new facilities to support exporters and importers – particularly SMEs.

https://www.euromoney.com/article/28w0si78rh0mqaoj1ze9s/treasury/smaller-firms-t...


Experts Discuss Russia’s Weak Economic Presence in Africa

(Business Post, Lagos, 24 August 2021) Russia’s weak economic presence in Africa has become a thing of concern for some experts in the country and they wonder why the nation is not aggressive with this like its ally, China. In July 2021, participants at the Association of Economic Cooperation with African States (AECAS), established under the aegis of the Secretariat of the Russia-Africa Partnership Forum (RAPF), agreed that lack of financial support was the major reason for this. Nikita Gusakov, Head of the Russian Export Credit and Investment Insurance Agency (EXIAR), reiterated that Africa was a priority for the agency. Senator Igor Morozov, a member of the Federation Council Committee on Economic Policy, and Chairman of the Coordinating Committee on Economic Cooperation with Africa noted during one of the meetings that in conditions of pressure from sanctions, it has become necessary to find new markets, new partners and allies for Russia. “It is important for us to expand and improve competitive government support instruments for business. It is obvious that over the thirty years when Russia left Africa, a number of countries such as China, India, the United States and the European Union have significantly increased their investment opportunities there in the region,” Morozov stressed. With a renewed growing interest in Africa, Russians are feverishly looking for establishing effective ways of entry into the huge continent.

https://businesspost.ng/world/experts-discuss-russias-weak-economic-presence-in-...


UKEF to forge closer trade ties with Central America

(Export Institute, Peterborough, 12 August 2021) UK Export Finance has signed a partnership with CABEI, Central America’s leading development bank, to encourage joint financing of major clean energy, infrastructure and construction projects. Trade between the UK and Central America was worth over £1.7 billion in 2020. At least £2.5bn is now available for new business in each of Guatemala, Honduras and Panama and £1.5bn for Costa Rica, El Salvador and Nicaragua. Countries that can benefit from the joint financing agreement include the Dominican Republic, Panama, Guatemala, Honduras, El Salvador, Nicaragua and Costa Rica. The UK signed a continuity trade deal with Mexico in December and started talks on a £5bn trade deal in March that promised an ‘Aztec-Brexit bounce’. However, as reported in IOE&IT Daily Update, the deal was rendered obsolete after the EU signed a more generous and comprehensive deal between its 27 members states and Mexico. According to a report from the House of Lords’ International Agreements Committee, the UK could now have to wait another three years to catch-up with the EU in trade with Mexico.

https://www.export.org.uk/news/576543/UK-looks-to-forge-closer-trade-ties-with-C...


Middle East Oil Refinery (MIDOR) in Egypt to start partial operations this year

(Construction Review Online, Nairobi, 25 August 2021) Financed to the tune of US$ 1.2bn by a consortium of international banks including CDP Bank, Credit Agricole Bank, and BNP Paribas with the Italian Export Credit Agency (SACE) and the Egyptian Ministry of Finance as guarantors, the Middle East Oil Refinery (MIDOR) expansion project is being undertaken by TechnipFMC. When fully completed the facility is expected to increase the production of LPG by 107%, high-octane gasoline by 60%, jet fuel by 145%, and diesel by 45%. These are the equivalent of 280,000 million tonnes (Mt), 1.6Mt, 2.2Mt, and 2.8Mt respectively.

https://constructionreviewonline.com/news/middle-east-oil-refinery-midor-in-egyp...


NEXIM: Promoting Social Inclusion With WAYEF

(This Day Alive, Lagos, 8 August 2021) The Nigerian Export Import Bank (NEXIM) has introduced a specific policy intervention that is promoting economic and social inclusion of key segments of the population, in particular women and youth. UN population projections for Nigeria in 2020 indicated that about 62% of Nigerians were below 25 years old; while over 50% are women. The Women and Youth Export Facility (WAYEF) is a deliberate and targeted funding scheme to address the needs of these vulnerable groups notes NEXIM Managing Director Mr. Abba Bello. Over the years, the bank has provided enormous support for many export-oriented industries that are high employers of women and youths such as cashew, shea, hibiscus, ginger among others, where a lot of women are involved in cleaning and packaging of products for export.

https://www.thisdaylive.com/index.php/2021/08/08/nexim-promoting-social-inclusio...


UKEF finances 6 hospitals in Ivory Coast

(Global Construction Review, London, 6 August 2021) UK Export Finance has lent €241m toward a €326m project to build six hospitals in the Ivory Coast, with UK-headquartered NMS Infrastructure Ltd. contracted to do the work. The hospitals will serve a catchment area of more than a million people, and will be built in Bouaké, Boundiali, Katiola, Kouto, Minignan and Ouangolodougou. The financing, a mix of buyer credit and direct lending to Ivory Coast’s Ministry of Health and Public Hygiene, will fund design and construction, equipment, post-completion training and technical support.

https://www.globalconstructionreview.com/uk-finances-six-new-hospitals-million-p...


What's New July 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.

  • Germany accused of hypocrisy over Arctic gas project
  • Australian ECA gives 80X more to fossil fuel projects than renewables
  • EXIM support and the Pemex Ocean fire
  • Export Development Canada Promises Net Zero by 2050
  • UKEF reports export credit arrangements for 2020
  • Australian ECA eyes bid for Pacific telecoms to block China
  • Ghanaian rail project takes off with Swedish & South African ECA backing
  • U.S. Chamber of Commerce supports EXIM
  • U.S. EXIM Bank says 2020 financing volume still far below global rivals
  • SACE helps revive Italian steelmaker Acciaierie d'Italia
  • Insurers mourn missed chance to form EU ECA
  • Afreximbank plans $8 billion fund to offset trade-pact losses
  • New Norwegian ECA, Eksfin, begins operations

Germany accused of hypocrisy over Arctic gas project

(Sky News, London, 16 July 2021) As deadly flooding ravages parts of Germany, the country's government is still considering massive investment in a Russian-led gas project known as Arctic LNG II. Germany has been accused of "pure play hypocrisy" for complaining of the impacts of climate change brought by this week's catastrophic flooding while signalling support for a new gas project in the Arctic. Reuters has reported that France's Bpifrance, Germany’s Euler Hermes and Italy's SACE were among the state-backed international lenders considering providing about $9.5 billion in financial support for the project.

https://news.sky.com/story/european-floods-germany-accused-of-hypocrisy-over-arc...


Australian ECA gives 80X more to fossil fuel projects than renewables

(Guardian, Sydney, 6 July 2021) Australia’s export credit agency provided more than $1.5bn in finance to fossil fuel projects between 2009 and 2020, about 80X what it spent on renewables, according to a new report from Jubilee Australia. Over the same 11-year period, covering the hottest years on record globally, it provided $20m in support to renewables projects. Luke Fletcher, executive director of Jubilee Australia, argues that EFA’s support for fossil fuel projects “bucks the international trend”, risks investing in doomed projects and curtails opportunities for the country’s energy sector to modernise. Export Finance Australia has also been criticized for taking on a role as a Development Finance Institution (DFI), adding equity stakes in risky overseas infrastructure to its export insurance and lending powers in order to to compete with Chinese, Japanese and Korean ECAs. For some, this sort of reform blurs the distinction between the government and the private sector, and at worst is a form of corporate welfare, blurring the line between helping developing countries vs Australian business. Australia is the world’s largest exporter of coal and gas, yet producers in those sectors are finding it increasingly difficult to source financing from commercial lenders.

https://www.theguardian.com/environment/2021/jul/06/australias-export-credit-age...


EXIM support and the Pemex Ocean fire

(Climate Change News, Broadstairs, 14 July 2021) Campaigners have called on the US to review its longstanding support for Mexico’s state-owned oil and gas company after a gas leak from one of its pipelines set the ocean on fire in the Gulf of Mexico.  The US export credit agency Exim bank has provided $16.14 billion in loans and guarantees to Pemex since 1998, with recent funds going to the site of the fire. For 76 years, the company has received billions of dollars in support from the US export credit agency, the Export–Import Bank (Exim), despite warnings of safety and environmental concerns.

https://www.climatechangenews.com/2021/07/14/ocean-fire-raises-questions-us-supp...


Export Development Canada Promises Net Zero by 2050

(Globe Newswire, Ottawa, 22 July 2021) Export Development Canada (EDC) is committing to net zero emissions by 2050 across its business lines and in its own global operations. The Crown corporation’s plan will include interim reduction targets for the most carbon intensive sectors for 2023 and 2030, supported by sustainable finance objectives. Meanwhile, EDC may face court action in the not-too-distant future, after a legal opinion commissioned by Oil Change International and several other organizations concluded that national export credit agencies have an international legal obligation to scale back their financing for fossil fuel-related activities. Canadian mining and gas company ReconAfrica is currently exploring for oil and gas in Namibia and Botswana which could become one of the biggest oil finds of the last few decades.

https://www.globenewswire.com/news-release/2021/07/22/2267539/0/en/Export-Develo...


UKEF reports export credit arrangements for 2020

(Janes Defense, London, 23 June 2021) The UK's export credit agency, UK Export Financing (UKEF), revealed in its annual report on 22 June that it had underwritten a record GBP12.3 billion (USD17.1 billion) for UK industry during the 2020/21 financial year. Key transactions in the annual report included the beginning of the drawing of GBP1.13 billion to BAE Systems in support of the manufacture of Eurofighter Typhoon and BAE Systems Hawk trainer aircraft to Qatar. In addition, buyer credit guarantees for Indonesia were supplied for the acquisition of Lockheed Martin C-130J Hercules medium transport aircraft (maximum liability of GBP74.6 million) and air-defence systems from Thales UK (maximum liability of GBP29.8 million).

https://www.janes.com/defence-news/news-detail/uk-government-reports-export-cred...


Australian ECA eyes bid for Pacific telecoms to block China

(Nikkei, Sydney, 20 July 2021) The government of Australia looks to support a bid by domestic telecom Telstra to buy a leading South Pacific mobile phone business reportedly eyed by a Chinese suitor, as Canberra works to limit Beijing's influence in the region. Telstra said Monday it is discussing a purchase of the Pacific operations of Jamaica-based Digicel "in partnership with the Australian government." The Australian company said any such deal for Digicel Pacific "would be with financial and strategic risk management support from the government." The government [through Export Finance Australia] would pay for half of the purchase -- estimated by local media at 2 billion Australian dollars ($1.47 billion) -- with Telstra taking a minority stake if the transaction is completed, Reuters reports. If China acquires the Pacific mobile network, it could monitor Australia’s communications to and from the region and use asset management as leverage noted John Lee, a senior researcher at the University of Sydney.

https://asia.nikkei.com/Business/Telecommunication/Australian-alliance-eyes-bid-...


Ghanaian rail project takes off with Swedish & South African ECA backing

(TFX News, London, 7 JUly 2021) Most recently Ghana's Ministry of Finance (MoF) signed a landmark €600 million ($712 million) ECA-covered financing deal for the construction of a 100 km section of the country’s Western Railway Line running from Takoradi Port to Huni Valley. Deutsche Bank acted as mandated lead arranger for both loans. The first, backed by EKN and fully arranged by Deutsche Bank, is a €523 million loan covering the bulk of the cost. The second is a €75 million commercial loan arranged and structured by Investec to cover the downpayment on the EKN-backed financing. It is backed by South Africa’s ECIC and funded by a syndicate of Investec Bank, Rand Merchant Bank, Nedbank (London branch) and Sanlam life Insurance. The Western Railway line is key to the haulage of agricultural produce and minerals from the middle belt to Takoradi Port in the south of Ghana. [The corridor is home to key bauxite mines, which are the bedrock of the country’s integrated bauxite aluminium masterplan.] The involvement of EKN and SEK reflects the significant number of Swedish sub-suppliers participating in the project. The engineering, procurement, and construction (EPC) contractor for the project is Amandi Investment with Bluebird Finance & Projects acting as lead financial advisor for the EPC. Given South Africa’s expertise and established trade flows in rail projects, Investec and Bluebird Finance & Projects - alongside Amandi, discovered that a multitude of South African rail suppliers could be sourced for this project and in turn reached out to ECIC to support the commercial facility, a first for the South African ECA.

https://www.txfnews.com/News/Article/7213/Training-for-rail-travel-all-aboard


U.S. Chamber of Commerce supports EXIM

(US Chamber of Commerce, Washington, 1 July 2021) In a letter to the Committee on Appropriations of the U.S. House of Representatives, the Chamber noted that overseas markets represent 95% of the world’s consumers and 80% of its purchasing power. Exports already support half of all manufacturing jobs, and one in three acres of American farms is planted for hungry consumers overseas. Approximately 300,000 small- and medium-sized businesses export, accounting for one-third of all merchandise exports. The International Affairs budget and the agencies it supports play a vital enabling role for U.S. companies to tap foreign markets and create jobs and prosperity at home. The Ex-Im bank provides vital financing and guarantees to help American businesses export. In the last pre-pandemic fiscal year when the Bank was fully functional (FY 2014), Ex-Im backed export sales that supported more than 164,000 American jobs. That same year, 90% of Ex-Im’s transactions — more than 3,340 — directly supported American small businesses. Far from being a burden on the taxpayer or a subsidy for corporations, Ex-Im charges fees for its services that has generated $7 billion in revenue for the U.S. Treasury over the past two decades beyond funds it received in appropriations. Failure to support Ex-Im would amount to unilateral disarmament in the face of other nations’ aggressive trade finance programs.

https://www.uschamber.com/letters-congress/us-chamber-letter-fy22-state-and-fore...


U.S. EXIM Bank says 2020 financing volume still far below global rivals

(Reuters, Washington, 30 June 2021) The Export-Import Bank of the United States said on Wednesday it remained far behind its global competitors in financing volume in 2020 even as overall financing activity fell due to the COVID-19 pandemic. In its annual competition report here to Congress, EXIM said it authorized $1.8 billion in official medium- and long-term export credit support during calendar 2020, compared with global leader China at $18 billion, France at $12.1 billion, Germany at $8.6 billion and South Korea at $5 billion. China, traditionally the largest provider of export credit, saw its financing volume decrease last year from over $33 billion in 2019.

https://www.reuters.com/article/marketsNews/idUSL2N2OC3DH?il=0


SACE helps revive Italian steelmaker Acciaierie d'Italia

(SteelOrbis, Brescia, 1 July 2021) Invitalia, the public shareholder, by entering the board, is expected to implement contractual commitments, in all a little over €2 billion - €400 million of capital increase - have already been paid, while about €700 million are missing in guarantees for a SACE [Italian export credit agency] loan, plus €900 million in reimbursements and support for variously assorted investments,  Steel magnate ArcelorMittal has so far supported the company with a capital payment of €1.8 billion. Now it is up to the Italian State through Invitalia to do what was agreed, based on the contract that was signed in December 2020, stated Acceaierie CEO Lucia Morselli. She added "The market is favorable and the company is working hard. However, until August 2023 we must comply with environmental constraints that prevent us from accelerating production even more." 

https://www.steelorbis.com/steel-news/latest-news/italys-acciaierie-ditalia-retu...


Insurers mourn missed chance to form EU ECA

(Global Capital, London, 30 June 2021) Europe missed an opportunity to use the debate over the future of development finance to establish an insurance guarantee agency to attract private capital needed to help them hit targets for investment into emerging markets, according to experts in trade finance and insurance. Policymakers spent two years debating whether to use the EBRD or the European Investment Bank as a platform for a new single development bank before deciding to stick with the current set-up augmented by a more collaborative approach dubbed “Team Europe”. An EU development insurer could also use reinsurance to mobilise substantial amounts of non-development finance institutional capital from the private insurance market and from EU export credit agencies, Paul Mudde, former trade finance professional at ABN Amro and trade credit insurer Atradius, said. The problem, in his view, was that in the EU discussions about the European Financial Architecture for Development (EFAD) an insurance approach, like the World bank’s MIGA, had never been considered.

https://www.globalcapital.com/article/b1shr452dndz04/insurers-mourn-missed-chanc...


Afreximbank plans $8 billion fund to offset trade-pact losses

(Bloomberg, London, 15 July 2021) African nations plan to raise about $8 billion for a fund to help offset revenue losses for countries that lower cross-border tariffs, as part of a continent-wide free-trade agreement. The African Export-Import Bank, or Afreximbank, has already provided $1 billion for the fund after the African Union set it up to help cushion sudden revenue losses and encourage participation. The free-trade area went into effect on Jan. 1. The $1 billion made available by Afreximbank will be used to leverage funding from other multilateral development-finance institutions, export credit agencies, commercial banks and donors. Afreximbank, in collaboration with the African Union, will hold intra-Africa trade fair in South Africa in November to provide access to trade and market information to companies and countries. In addition, it’s planning “face-to-face training workshops’’ in 13 countries from October to build the capacity required to meet trade targets, the lender said.

https://www.bloomberg.com/news/articles/2021-07-15/africa-plans-8-billion-fund-t...


New Norwegian ECA, Eksfin, begins operations

(ShipInsight, Oslo, 2 July 2021) Oslo-headquartered Export Finance Norway (Eksfin.no), the result of a merger between former government agencies GIEK and Export Credit Norway, has opened its doors and is fully operational from 1 July 2021. The merger of the two predecessor agencies forms part of a larger redesign by the Ministry of Trade, Industry and Fisheries of the government apparatus around export promotion and export credit financing to make the system easier to navigate for end users.

https://shipinsight.com/articles/new-norwegian-export-credit-agency-eksfin-begin...


What's New June 2021

I apologize for the delay in publishing this month. This issue is being sent from the beach at Sandbank Park. 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.

  • Global capital racing towards clean energy
  • Rich Countries Subsidizing “Dash for Gas” in Developing World
  • As banks [and ECAs?] flee coal, campaigners turn sights on gas
  • Human Rights Watch Q&A on ECA Fossil Fuel Subsidies
  • World's largest oil shale power plant in Jordan near completion with Sinosure support
  • Chinese export insurance company reports steady business growth
  • ECA supported Ethiopian projects show ‘railpolitik’ in action
  • EXIM Environmental and Social Projects Information and Concerns Grievance Hotline
  • Is West Africa the focus region for ECA-supported financing?
  • Nigeria looks for US$85 billion in investments, increasing ECA dependencies
  • UK business given £12.3bn export support from government
  • Rosatom Preparing Support With French ECA For Foreign Nuclear Power Plants
  • KDF to acquire 118 APCs from Turkey at US$7.4 million
  • ECA Climate change goals lacking on maritime shipping decarbonization

Global capital racing towards clean energy

(Hindu Business Line, Chennai, 17 June 2021) India must accelerate its shift to renewable energy to attract more ESG funding and, thereby, meet its net zero emissions target. The International Energy Agency’s net zero emissions (NZE) roadmap by 2050 sets out the massive investment required to cut emissions and achieve the Paris goal of restricting global surface temperature increase to below 1.5 degree Celsius. Under the NZE roadmap, the use of unabated fossil fuels declines sharply to just over a fifth of the total energy supply. More than two-thirds of the energy supply in 2050 will come from renewables and around a tenth from nuclear. To meet these targets, total annual energy investment will have to surge to $5 trillion by 2030, more than tripling from just over $500 billion annually over the last five years to more than $1,600 billion in 2030. Further, the NZE roadmap requires annual investment in transmission and distribution grids to expand from $260 billion in 2021 to $820 billion in 2030. Global capital is already fleeing fossil fuels and moving towards more profitable clean energy — a shift that is now accelerating in response to net zero pledges last year by China, Japan and South Korea, a ratcheting up of climate ambition by President Biden’s administration and the recent announcement by G7 countries that they will exit all international coal financing by their export credit agencies.

https://www.thehindubusinessline.com/opinion/global-capital-racing-towards-clean...


Rich Countries Subsidizing “Dash for Gas” in Developing World

(Energy Fuse, Washington, 7 June 2021) Rich countries are using public financing to expand the construction of natural gas infrastructure in poorer countries around the world. Public-financing of gas in the Global South exceeds that of renewable energy by a factor of four, according to a new report from the International Institute for Sustainable Development. The continued government-backed financing of fossil fuels in low- and middle-income countries puts climate goals at risk and threatens to lock in infrastructure for decades to come. The investment “risks driving a new dash for gas locks countries into a high-carbon pathway, imperiling their economies future and the global climate,” the authors warned in the report. Funding for gas comes from an array of multilateral development banks and a constellation of bilateral financing at the government level from G20 nations, such as export credit agencies and development banks. According to the study and to data from Oil Change International, natural gas projects in the Global South received an average of $16 billion in international public financing between 2017 and 2019, four times higher than solar and wind. Of that total, 48% came from just three countries: Japan, China and the United States. Most of that financing (46%) is funneled into power generation, a sector where there are cheap alternatives in solar, wind and energy storage.

http://energyfuse.org/rich-countries-subsidizing-dash-for-gas-in-developing-worl...


As banks [and ECAs?] flee coal, campaigners turn sights on gas

(Global Trade Review, London, 16 June 2021) Environmental campaign groups are switching their aim to public and private financing for natural gas projects as they get closer to winning the battle over thermal coal. But the only firm commitments on financing have been on thermal coal, where the G7 nations – Canada, France, Germany, Italy, Japan, the UK and the US – committed to “take concrete steps towards an absolute end to new direct government support for unabated international thermal coal power generation by the end of 2021” including export finance and trade support. But data from Oil Change International, a non-profit that campaigns against the use of fossil fuels, suggests the move will make little impact on overall public financing for fossil fuels. In recent months, UK Export Finance (UKEF) has been working to roll out a new transition development guarantee scheme to help oil and gas companies switch towards less polluting operations. But while industry bodies have backed the export credit agency’s plans, analysts (and campaign groups) have warned new initiatives must avoid funding any and all fossil fuels... There has not yet been much market uptake of instruments issued using for example the LMA’s Social Loan Principles.

https://www.gtreview.com/news/global/95275/


Human Rights Watch Q&A on ECA Fossil Fuel Subsidies

(Human Rights Watch, New York, 7 June 2021) Government financial support for fossil fuels, including through subsidies, presents a key obstacle to achieving emissions reductions urgently needed to address the climate crisis. Subsidies artificially reduce the costs of fossil fuel production and use, driving continued fossil fuel dependence at a time when governments should be rapidly transitioning away from fossil fuels toward clean, renewable energies like wind and solar. Human Rights Watch has documented how climate change in Canada is depleting Indigenous peoples’ access to traditional food sources and in Colombia, showed how more frequent droughts are worsening malnutrition among Indigenous children. In the US, extreme heat is linked to adverse birth outcomes. These are only a few of the growing impacts experienced around the world that are expected to intensify as temperatures continue to rise in coming years. As of 2019, G20 governments, representing the world’s major economies, supported coal, oil, and gas production and consumption by, on average, $548 billion per year. A significant disparity in support also exists in international public finance, such as from export credit agencies. G20 countries provided at least $77 billion a year through their international public finance institutions.

https://www.hrw.org/news/2021/06/07/qa-fossil-fuel-subsidies


World's largest oil shale power plant in Jordan near completion with Sinosure support

(Zawya, Dubai, 1 June 2021) The Attarat project will generate 3.7bln kWh of electricity, which can meet nearly one-fifth of Jordan's power demand. The first unit of the world's largest oil shale power plant, located at Attarat um Ghudran, Jordan, is now online, the project's Chinese contractor tweeted last week. The post also said the project is the largest 100% Chinese financed private infrastructure project outside China under the Belt and Road Initiative (BRI). In March 2017, Reuters had reported that the project had secured debt financing from a consortium of Chinese banks. In the same month, JV partner Enefit said in a statement that the project is the first oil shale-fired power plant and mine in the world financed using limited recourse debt financing, securing $1.6 billion for 15 years, backed by export credit insurance from Sinosure.

https://www.zawya.com/mena/en/business/story/Worlds_largest_oil_shale_power_plan...


Chinese export insurance company reports steady business growth

BEIJING, June 5 (Xinhua, Beijing, 5 June 2021) China's only policy-oriented insurer specializing in export credit insurance reported steady business growth in the first five months of 2021. The China Export & Credit Insurance Corporation, or SINOSURE, served about 139,000 clients in the January-May period, increasing 16.3 percent year on year. During the period, the company underwrote about 314.63 billion U.S. dollars worth of insured businesses, up 28 percent year on year. SINOSURE is a state-funded and policy-oriented insurance company that promotes China's foreign economic and trade development and cooperation. It was officially launched and put into operation in 2001, and its service network now covers the whole country.

https://www.bignewsnetwork.com/news/269771725/chinese-export-insurance-company-r...


ECA supported Ethiopian projects show ‘railpolitik’ in action

(Financial Times, London, 31 May 2021) Two ECA lines of credit offer a comparison of Chinese and non-Chinese ECA infrastructure loans in the same African country. A decade ago, when Ethiopia’s late leader Meles Zenawi was planning 5,000km of standard gauge railway, the landlocked country was granted a $2.5bn loan by China Eximbank. That loan was tied to the construction of an 800km railway east-west between Addis Ababa, the capital, and the port city of neighbouring Djibouti. It would be built by Chinese engineers and use Chinese locomotives. A second rail 2013 project intended to run about the same distance south to north, between the central town of Awash and Mekelle, capital of the now war-torn Tigray region was undertaken by a Turkish construction group which helped broker $1.1bn of funding from Turkey’s Eximbank, Credit Suisse and European export credit agencies. Financing proved a big difference. When Ethiopia ran into problems servicing its debt due to a perennial shortage of foreign currency, the Chinese proved flexible, where in contrast, there were penalties built into the European loans for delayed repayment.

https://www.ft.com/content/cc1dc93d-d3d0-4728-8521-14734199c58d


EXIM Environmental and Social Projects Information and Concerns Grievance Hotline

(EXIM, Washington, 29 June 2021) The Environmental and Social Project Information and Concerns unit of EXIM provides a process for customers, organizations, and individuals to request or submit information, or express concerns, regarding specific EXIM supported projects, and provides feedback on environmental and social issues. It establishes a formal timeline for response, allowing EXIM staff to promptly receive inquiries and engage in appropriate follow-up action. Contact them at +1 800 565.3946 or +1 202.565.3570 or by email at <EnviroResponseCoord@exim.gov> or via an online form at the above link. An interesting and potentially useful ECA accountability mechanism, depending on how it is being implemented.

https://www.exim.gov/policies/ex-im-bank-and-the-environment/environmental-and-s...


Is West Africa the focus region for ECA-supported financing?

(Business Alive, Johanessburg, 14 June 2021) Export credit agency (ECA) finance is an important lever for infrastructural development in West Africa. According to deal intelligence platform TXF Data, Africa was the second-most active region globally in 2020 for ECA-supported financing, with more than $35.5bn worth of ECA-supported debt. This included some of the largest single financed projects in Africa, such as the Mozambique LNG transaction ($14.9bn); the Nigeria LNG train 7 ($3bn); and the Credendo/The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) covered $359m real estate project in Abidjan, to name a few. The Covid-19 pandemic aggravated the infrastructure deficit faced by the continent. West African governments responded quickly, finding new strategies to raise the deficit themselves — particularly with social infrastructure. Unlike East and Southern Africa, West Africa raised finance on the sovereign’s balance sheet, via the ministry of finance (MoF). ECA direct financing is an integral part of financing in West Africa. This model of financing provided by most European ECAs is generally a “countercyclical” financing mechanism that seeks to address market failure. In the first quarter of 2020, there was a global shortage of liquidity, and this significantly raised the cost of financing. This caused ECAs to step up and provide direct loans to MoFs at low Organisation for Economic Cooperation and Development (OECD) commercial interest rates of reference (CIRR). Governments are aware of these financing arrangements and made use of the product offered by ECAs in 2020 (for example the latest March 2021 OECD CIRR for 8.5+ year loan in US dollars is 1.91%).

https://www.businesslive.co.za/bd/companies/financial-services/2021-06-14-native...


Nigeria looks for US$85 billion in investments, increasing ECA dependencies

(This Day, Lagos, 30 May 2021) As the African Continental Free Trade Area enters its first six months of inauguration on Tuesday, 1st June, the need for Nigeria to enter the fray of her infrastructure development was the topic that dominated discourse at various fora last week. While the webinar sponsored by Nigeria Export Import Bank revolved around preparing Nigeria in the area of infrastructure development for international trade, the webinar organised by the Bureau of Public Enterprises, similarly dwelt on infrastructure issues and how government will engage it using the public private partnership model. To complement the PPP platform, the apex bank tasked the state governments to tap into the opportunities available to develop the economies of their respective states.

https://www.thisdaylive.com/index.php/2021/05/30/afcfta-and-nigerias-n35tn-infra...


UK business given £12.3bn export support from government

(City AM, London, 23 June 2021) In its annual results published today UK Export Finance (UKEF) announced that it provided £12.3bn (US$17bn) of support to UK exporters in the last financial year, amid coronavirus disruption and ongoing Brexit trade negotiations, almost 3X the amount given in 2019-20. UKEF estimates that its financial support to UK exporters during the pandemic has safeguarded up to 107,000 jobs, and helped key industries in the UK to survive. £7.3bn (59%) was dedicated to exporters including Ford, Nissan, Subsea 7, Rolls Royce, easyJet, and British Airways, whose businesses were severely disrupted by the pandemic, the agency said. A large chunk of this support went to major exporters British Airways and easyJet, who received £2.5bn (20%) to help safeguard jobs at Luton and Heathrow airports. Small businesses in London benefitted from £215m (1.7%) as part of the agency’s Temporary Covid Risk Framework. 79% of the 549 companies UKEF supported were SMEs, [although the % of total funds for SMEs is not known]. The announcement comes a year after campaigners launched a probe into UKEF that found it was supporting sectors prone to corruption as part of its post-Brexit export drive. Campaign group Spotlight on Corruption expressed particular concern at the time that UKEF was increasingly supporting newly established UK-registered subsidiaries of foreign construction firms that have been embroiled in corruption allegations.

https://www.cityam.com/uk-business-given-12-3bn-export-support-from-government/


Rosatom Preparing Support With French ECA For Foreign Nuclear Power Plants

(UrduPoint News, Moscow, 31st May, 2021) Atomenergoprom JSC, a subsidiary of Russian state corporation Rosatom, consolidating all civil assets of the Russian nuclear industry, is working with the French Economy Ministry on a new mechanism for financial support of its nuclear power plant construction projects abroad with the participation of French export credit agency Bpifrance Assurance Export, according to Atomenergoprom's 2020 annual report. Work continued with the French Ministry of Economy and Finance on the development of a fundamentally 'new mechanism' for financing the company's projects for the construction of nuclear power plants abroad, and will continue in 2021" the report says. No further details are provided. In another nuclear power story involving ECAs, Ukrainian nuclear power plant operator Energoatom told ambassadors of the Group of Seven (G7) and the head of the EU mission in Ukraine that it has "made significant progress" with its strategy to diversify its sources of nuclear fuel. Since 2010, they have signed three contracts for the supply of nuclear materials for the production of nuclear fuel by Urenco, which is one of Westinghouse's nuclear fuel suppliers. Their current contract was signed in July 2019. They are now considering increasing the volume of supplies of nuclear materials under that contract and attracting funding under the UK government's export support programme, which is being implemented through UK Export Finance, the UK's export credit agency.

https://www.urdupoint.com/en/world/rosatom-preparing-with-france-mechanism-for-f...


KDF to acquire 118 APCs from Turkey at US$7.4 million

NAIROBI, Kenya, Jun 5- The Kenya Defence Forces (KDF) is set to acquire 118 Armoured Personnel Vehicles (APCs) from Turkey, in a move meant to bolster its resilience power in the war against terrorism. Kenya is expected to spend Kenyan Sh7.7 billion to purchase the 118 APCs through the Turkish Export Credit Agency. The APCs will be acquired from the Turkish defense and automotive firm Katmerciler. Two other firms, one from South Africa and North America, were locked out of the multi-billion shillings deal.

https://www.capitalfm.co.ke/news/2021/06/kdf-to-acquire-118-apcs-from-turkey-at-...


ECA Climate change goals lacking on maritime shipping decarbonization

(S&P Globlal, New Yrk, 3 June 2021) The difficult-to-decarbonize maritime shipping sector was not part of the Paris agreement, and is projected to account for an increasing portion of global CO2 emissions. The international cargo and container shipping industry plays a central role in global supply chains, but until recently has made few inroads toward decarbonization. That needs to change if the world is going to achieve net zero emissions by 2050. An inaugural report released late last year showed that ECA shipping portfolios aligned with the climate goals set by the IMO at only three of 15 disclosing institutions: Dutch bank ING Groep NV, French export credit agency Bpifrance Assurance Export, and Eksportkreditt Norge AS, also known as Export Credit Norway. But even as it pursues deep decarbonization pathways, the maritime shipping industry is taking up interim solutions. For starters, some shippers have begun using liquified natural gas as a shipping fuel, which produces significantly less carbon than the oil the industry uses. But since natural gas is not viewed as a permanent solution because it still emits carbon, the industry is pursuing zero-carbon options as well. The Getting to Zero Coalition coordinated by the Global Maritime Forum. The coalition recently released a report that found getting past the tipping point for zero-emissions fuel costs will require the industry to have 5% adoption of those fuels by 2030, with adoption ramping up to more than 90% by the mid-2040s.

https://www.spglobal.com/esg/insights/your-climate-change-goals-may-have-a-marit...


What's New May 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.

  • ECAs and Fossil Fuels
  • OECD Study Measures Distortions in International Markets, but not by ECAs
  • IEA leaves little room for doubt: no fossil fuel expansion - but ignores ECAs
  • EDC singled out on fossil fuel finance by international legal opinion
  • EU lawmakers urge French, German & Italian ECASs to ditch Arctic LNG 2 support
  • Decarbonising Danish Export Credits
  • Egypt to buy Rafale fighter jets with French ECA support
  • Russian Export Credit Line for Sri Lankan Arms
  • Japan looks to introduce finance system for defence exports
  • Belarus isolation deepens as air links cut and Swedish ECA credit cancelled
  • Europe’s big oil companies exploit African natural-gas loophole
  • Royal Caribbean adjusts $1.15 B in ECA facilities facing $1.1 B loss in first quarter of 2021

ECAs and Fossil Fuels

(ECA Watch, Ottawa, 29 May 2021) TXF News recently pronounced Mozambique's LNG Area 1 project as the winner of its energy financing ECA-backed deal of the year, highlighting the "battle" between coal and gas (and oil) in the industry's efforts to survive efforts to halt climate change, following the International Energy Agency's (IEA) recent warning that we must reduce CO2 emmissions to net-zero by 2050. The IEA report on May 18 noted that "nations around the world would need to immediately stop approving new coal-fired power plants and new oil and gas fields and quickly phase out gasoline-powered vehicles if they want to avert the most catastrophic effects of climate change." A recent Oil Change International legal opinion has also warned about the legal consequences of continuing to back fossil fuel projects elsewhere in the world. The fossil fuel industry and some governments had begun to make noises about ceasing funding for coal, claiming that LNG is "safer", hence TXF's apparent "praise" for the US$29 billion ECA backed Mozambique LNG project. However, a 2018 Rentar Environmental Solutions study notes that natural gas contributes more to global warming than coal, gasoline and diesel, far more in fact. UKEF funding of Mozambique's LNG plans are now the subject of a UK court review as well as the subject of an EXIM scandal over its loan guarantee for a Greensill Capital investment in a Texas gas terminal, approved to dampen US fossil fuel industry opposition to EXIM's support for their competitor Anadarko Petroleum's 26.5% share in the huge Mozambique LNG project. To round off the controversies, Total's Mozambique operations, the recipient of multiple ECA financial supports, have had to be cancelled as the result of a jihadist assault on a nearby town.




OECD Study Measures Distortions in International Markets, but not by ECAs

(OECD, Paris, May 2021) This OECD report looks at support governments provide to their industrial producers which they say has been a growing source of trade tensions amid reports of excess capacity and unfair competition. While much light has already been shed on support to agricultural producers and fisheries, the scope and scale of government support in manufacturing remains opaque and poorly documented. The study finds that firms benefit by not being subject to the same market discipline as their competitors, domestic or foreign. However, they note that much of the little academic evidence that exists for OECD countries concerns either the effects of subsidised lending on small and medium-sized enterprises (e.g. from a regional development angle) or export credits. They note that both issues fall outside the scope of the present report. The claim "export credits are in principle subject to the OECD Arrangement on Officially Supported Export Credits and should therefore reflect market terms and conditions for Participants." A review of the keywords "eca subsidies" on the ECA Watch web site found 97 example documenting the fact that export credits do not reflect "market terms and conditions for Participants", contrary to the claims of the OECD "gentlemans" agreement.

https://www.oecd-ilibrary.org/docserver/a1a5aa8a-en.pdf


IEA leaves little room for doubt: no fossil fuel expansion - but ignores ECAs

(Bank Watch, Nijmegan, 18 May 2021) The International Energy Agency (IEA) has launched a long-awaited report setting out for the first time an energy scenario that is aligned with the urgent goal of limiting global warming to 1.5°C. The Agency sets this out in its report, “Net Zero by 2050: A roadmap for the global energy sector”, which it claims is “one of the most important and challenging undertakings in the IEA’s history”. Although not without problems, its headline conclusion is rock-solid: there can be no new fossil fuels in a net-zero by 2050 pathway. This conclusion is fully aligned with one of the core demands of the global call on banks on the new Fossil Banks No Thanks platform, launched yesterday. Unfortunatly the report makes no reference to the role of ECAs which are amongst the largest financial supporters of new fossil fuel projects.

https://mailchi.mp/banktrack/the-iea-leaves-little-room-for-doubt-no-fossil-fuel...


EDC singled out on fossil fuel finance by international legal opinion

(National Observer, Vancouver, 5 May 2021) EDC's financial support to the oil and gas sector came under scrutiny Tuesday as part of a new legal opinion outlining Canada’s obligations in responding to the climate crisis. The legal opinion from London says governments must take steps to stop their export credit agencies from providing financial help to oil and gas projects worldwide. EDC provided over $8 billion in support last year to the oil and gas sector, it has confirmed, and over $10 billion the year before. EDC says it operates at arm's length from the government, that it has cut down on its lending portfolio’s exposure to high-carbon sectors in recent years, and complies with all the OECD climate-related policies. Viñuales and Cook’s legal opinion explicitly singles out EDC as representing the largest supporter among G20 export credit agencies of fossil fuels during the 2016-18 period. EDC’s climate change policy — and some criticism levied against it related to oil and gas — is also highlighted.

https://www.nationalobserver.com/2021/05/05/news/legal-opinion-singles-out-canad...


EU lawmakers urge French, German & Italian ECASs to ditch Arctic LNG 2 support

(Reuters, London, 18 May 2021) A group of mostly Green Party lawmakers from the European Parliament on Wednesday urged the leaders of Germany, France and Italy not to support a Russian Arctic liquefied natural gas (LNG) project due to climate change concerns. The $21 billion project, led by Russian gas producer Novatek and with international backers including French oil major Total TOTF.PA, is expected to launch in 2023 and reach full LNG production capacity of almost 20 million tonnes a year in 2026. "We urge the French, German and Italian governments to refuse to support this project and set a new standard by ending all export finance support to fossil fuels before COP26," the letter said.

https://www.nasdaq.com/articles/eu-lawmakers-urge-france-germany-italy-to-ditch-...


Decarbonising Danish Export Credits

(Just Finance International, Aarhus, 25 May 2021) A forthcoming report from Just Finance International outlines recommendations to the Danish government for plans to phase out fossil fuel support for its export credit agency (ECA) Eksport Kredit Fonden (EKF) and also for its broader international public finance support. Public development funds are meant to benefit people, climate and environment, but in reality they support some of the most destructive activities on earth. Coal power is the world’s most polluting energy source, and the largest contributor to climate change. Yet public funds are still financing new investments in coal and other highly polluting industries. In response to worsening climate change, the United Nations International Panel on Climate Change (IPCC) has announced that financial and governmental support of high-emission sectors must be decreased, and climate resilience increased. The UN IPCC has made clear that all untouched fossils must stay in the ground and all subsidies must stop if the Paris climate goals are to be  reached. In line with the Paris Agreement goals, governments and their institutions worldwide are taking steps to phase out fossil fuels. In this report, a screening of Danish ECA EKF’s portfolio shows that while its investments in fossil fuels are limited, it has several projects in high-greenhouse gas emission (GHG) sectors such as cement, hydropower and mining, and in the livestock and chemical sectors. It is also likely to increase its involvement in cement and hydropower in the coming years. Because export credit agencies are demand-driven, their portfolios reflect the applications they receive. Clear regulations are essential to prevent ECA support for fossil fuels and other high-emission sectors in the future.

https://justfinanceinternational.org/


Egypt to buy Rafale fighter jets with French ECA support

(Second Line of Defense, Virginia, 5 May 2021) France welcomed May 4 an Egyptian announcement of an order for a further 30 Rafale fighter jets and weapons from Dassault Aviation, MBDA and Safran, confirming a news report on Disclose, a French campaigning website. The Egyptian deal was worth a total €3.95 billion ($4.7 billion), with €3.75 billion for the Rafales, and €200 million for weapons from MBDA and Safran Electronics & Defense. Because Egypt is heavily indebted, the acquisition will be financed by an export credit guaranteed bank loan backed by France for up to 85 percent of the total amount.

https://sldinfo.com/2021/05/egypt-to-buy-more-rafale-fighter-jets/


Russian Export Credit Line for Sri Lankan Arms

(Daily News, Colombo, 13 May 2021) The Sri Lanka Air Force (SLAF) in its response to concerns raised by the Opposition on the Government’s move to purchase new helicopters from Russia amidst the COVID pandemic, said the purchase was on a Government-to-Government basis via a Line of Credit offered to Sri Lanka to purchase military hardware from Russia which is still being negotiated over several years. Russia had offered Sri Lanka a US$ 300 million Credit Line, from which 14 Mi-171E and Mi-171Sh helicopters were bought down in 2010 at a cost of US$ 165 million, some of which are currently being used for UN peace keeping operations. He said that there was a balance of US$ 135 million which lapsed in 2015, but it was renewed by Russia to allow Sri Lanka to purchase a Gepard 5.1 Offshore Patrol Vessel (OPV) for the Sri Lanka Navy. However, since the Navy had found a less costly alternative, Russia had agreed to allow that amount to purchase Mi-17 helicopters.

http://www.dailynews.lk/2021/05/13/features/249153/russian-credit-line-%E2%80%93...


Japan looks to introduce finance system for defence exports

(Janes Defence News, Coulsdon, 18 May 2021) The government of Japan is reportedly looking into the possibility of supporting defence exports through the provision of low-interest loans. The plan would involve the state-owned Japan Bank for International Cooperation (JBIC) providing credit to potential customers. Government sources cited by Japanese media said the loans would enable developing countries with a shortfall in funding to procure defence equipment from Japan. The government’s official export credit agency, Nippon Export and Investment Insurance (NEXI), would support the loans.

https://www.janes.com/defence-news/news-detail/japan-looks-to-introduce-finance-...


Belarus isolation deepens as air links cut and Swedish ECA credit cancelled

(The Journal, Dublin, 18 May 2021) Belarus was increasingly isolated today as Europe cut air links and calls grew for more action over its diversion of an airliner and arrest of a dissident on board. The Swedish Export Credit Agency (EKN) said today it was withdrawing export guarantee offers for deals involving two state-owned Belarusian companies, citing failure to live up to human rights standards. The guarantee offers, which totalled two billion Swedish kronor (€197 million), concerned the sale of gas turbines from a Swedish subsidiary of Germany’s Siemens and state-owned Belarusian energy companies RUE Minskenergo and RUE Brestenergo.

https://www.thejournal.ie/joe-biden-belarus-plane-arrest-5447194-May2021/


Europe’s big oil companies exploit African natural-gas loophole

(Africa Report, Paris, 24 May 2021) Facing pressure from the public and Western regulators, as well as from shareholders and financial partners, oil industry majors, especially those based in Europe – chiefly Shell, BP, Total and Eni – have initiated an unprecedented transformation by voluntarily reducing their crude oil activities in favour of [so called] “greener” forms of energy. This may be good news for environmental activists, but not so for Africa’s oil-producing countries that benefit from the tax revenues and jobs the industry brings. In the global race to reduce carbon emissions, Africa is a bystander rather than an active participant. The continent produces 9% of the world’s liquefied petroleum gas (oil) – or 7.2m barrels a day – and 6% of its natural gas, while being a low emitter of greenhouse gases. Home to 17% of the world’s population, Africa accounts for just 2% of global carbon emissions. In addition, more than half of its oil production is for export. Shell’s stated goal, backed by the European Union and the UK, is to become carbon neutral by 2050. Europe’s oil majors, while not required to meet any legal obligations at this stage, have integrated this target across their operations. It takes into account the end use of the fuels they sell (scope 3 emissions), which is by far the largest factor in carbon emissions. For example, the French group Total’s direct emissions amount to around 45m metric tonnes of carbon dioxide equivalent, but its vehicle-related emissions are estimated to be as high as 450m metric tonnes.

https://www.theafricareport.com/91319/africas-energy-transition-dilemma/


Royal Caribbean adjusts $1.15 B in ECA facilities facing $1.1 B loss in first quarter of 2021

(Royal Caribbean Blog, Winter Garden, 29 April 2021) While Royal Caribbean did lose $1.1 billion or $4.66 per share compared to US GAAP Net Loss, that is an improvement over the same time last year, when it lost $1.4 billion. Among the actions taken during the first quarter of 2021 to help include completing the balance of the previously announced amendments to its export credit facilities, which in total defer $1.15 billion of principal amortization due before April 2022 and waive financial covenants through at least the end of the third quarter of 2022.

https://www.royalcaribbeanblog.com/2021/04/29/royal-caribbean-reports-11-billion...


What's New April 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.

  • CSOs say newly launched export finance coalition (E3F) fails to lead
  • OECD Arrangement amends local content rules for export credits
  • Rich nations under fire for funding gas as 'bridge fuel' overseas
  • UK court to review Mozambique fossil fuel investment
  • Biden Administration to Utilize EXIM as Key Element in New International Climate Finance Plan
  • Canada’s oil and gas sector received $13 billion in EDC subsidies during the pandemic
  • Beijing and New Delhi court Indian Ocean armies with ECA loans
  • Tell EXIM: Cut ties with India's deadly Sasan coal plant
  • US climate summit declarations deal major blow to coal in Asia
  • China Is Investing in Africa’s Energy and Transportation Infrastructure
  • Boeing Forecasts Sufficient Capital for Aviation Finance
  • Iraqi, GE achieve financial close of Power Up Plan 4
  • Russian president signs law to ratify protocol restructuring Belarusian ECA loan

CSOs say newly launched export finance coalition (E3F) fails to lead

(Oil Change International, Washington, 15 April 2011) In response to the launch of a new Export Finance for the Future coalition (E3F), 21 civil society organizations (CSOs) from 14 countries released a statement criticizing the lack of ambition from the coalition. The seven European countries, which according to French Finance Minister, Bruno Le Maire represent around 40% of export financing in the OECD, pledged to end formal trade and export financing directed at thermal coal mines and coal supply chain infrastructure. While welcoming the initiative as a step in the right direction, the CSOs, including Oil Change International, state that the coalition fails to take the urgent action that is required to meet climate goals: “Rather than adding new commitments, the E3F principles are simply a reiteration of what most signatories are already doing: not supporting the coal sector, increasing support for ‘green products’, and being more transparent about their support for oil and gas. For this coalition to make a real difference, it needs to take decisive action to end all export finance for fossil fuels, following at least the level of ambition shown by the UK, which put an end to virtually all new export finance for fossil fuels last month.” Seven European countries (Denmark, France, Germany, the Netherlands, Spain, Sweden and the United Kingdom) formally pledged to end their support for agencies that finance export projects Fossil fuels. CSOs note that a few countries are embarrassingly absent from the coalition, including the US and Canada. In January, the White House published an Executive Order stating that it would “promote ending international financing of carbon-intensive fossil fuel-based energy,” including finance provided by US EXIM. And while Canada’s export finance institution, Export Development Canada (EDC), was among the first ECAs to adopt a climate change policy, it remains a top provider of export support for fossil fuels.

http://priceofoil.org/2021/04/15/csos-say-newly-launched-export-finance-leadersh...


OECD Arrangement amends local content rules for export credits

(Global Trade Review, London, 27 April 2021) The decision to amend local content rules within the OECD Arrangement on Officially Supported Export Credits has been hailed as an “important step” in modernising the agreement, though industry figures have raised concerns over a lack of progress in other key areas of discussions. The OECD revealed last week that participating members of the Arrangement – which includes countries in the EU, as well as the US, Japan, Canada and Australia – had agreed to increase the maximum local cost support on offer from their ECAs. For export contracts in high income OECD countries (category one), maximum local cost provisions have risen from 30% of the export contract value to 40%. In all other nations (category two), the percentage of local costs a participating arrangement ECA can cover has been increased to 50%. A high-ranking official in the export credit sector familiar with discussions on the Arrangement, tells GTR that participating members had initially struck an agreement to amend local content rules in November. However, they say that the EU needed time to formally approve the changes as the Arrangement is legally binding in the bloc.

https://www.gtreview.com/news/global/oecd-arrangement-amends-local-content-rules...


Rich nations under fire for funding gas as 'bridge fuel' overseas

(Thomson Reuters, London, 21 April 2021) Donor governments are pulling out of financing new coal plants, but campaigners say they want pledges to cover all fossil fuels, with gas still touted by some as a way to transition to renewable energy. Pressure on wealthy governments to stop financing polluting coal projects in developing nations is getting results, with more countries announcing they will no longer make such investments. But the battle is far from won - and is now shifting to include oil and gas finance, climate change campaigners say. Last week, 57 U.S. green groups wrote to U.S. climate envoy John Kerry urging him to "unequivocally declare that gas is not part of the solution" and to immediately end all fossil fuel support internationally as well as U.S. exports of fossil fuels "as science and justice require". The move came after Kerry told a discussion with the head of the International Monetary Fund this month that "gas, to some degree, will be a bridge fuel", meaning it could smooth the transition from the dirtiest energy sources - coal and oil - to renewables. Kate DeAngelis of Friends of the Earth noted the new plan to phase out fossil fuel finance did not cover the U.S. Export-Import Bank, the largest source of U.S. government financing for fossil fuel projects abroad. Some 20 environmental organisations said the E3F coalition had made no new commitments and that the Netherlands, France and Britain continued to provide support for gas extraction in violence-hit northern Mozambique, saying the investments had forced communities from their homes after losing their fishing areas and farmland.

https://news.trust.org/item/20210421220210-sdpc4/?utm_campaign=inDepth&utm_mediu...


UK court to review Mozambique fossil fuel investment

(Africa Times, Roubaix, 22 April 2021) The British government’s investment in developing liquified natural gas (LNG) projects in Mozambique – projects contributing to the conflict and instability in the country’s north – is headed for judicial review following a successful legal filing from the Friends of the Earth. The London-based NGO says the decision to approve funding for LNG was illegal, and wants it reexamined because investment in fossil fuels is inconsistent with both the global climate goals established under the Paris Agreement and the UK’s own climate commitments. The Guardian notes fears that fossil fuel project is stoking an insurgency in the north which has left thousands of people dead and displaced hundreds of thousands. The investment amounts to about US$1 billion through the UK Export Finance (UKEF), the British export credit agency. “We’re delighted the High Court has given us permission to challenge the UK government’s reckless decision to provide huge financial support to a climate-wrecking gas project in Mozambique,” said Will Rundle, head of legal at Friends of the Earth, in a statement released Thursday. French energy giant Total on Monday confirmed it is suspending work on a massive $20 billion gas project in northern Mozambique following the latest jihadist assault on a nearby town last month.  The US is also backing the $20 billion methane gas development. The US Export-Import Bank (Exim) has provided a $4.7bn loan to the project.

https://africatimes.com/2021/04/22/uk-court-to-review-mozambique-fossil-fuel-inv...


Biden Administration to Utilize EXIM as Key Element in New International Climate Finance Plan

(JD Supra, Sausalito, 27 April 2021) On April 22, 2021, President Joe Biden announced his International Climate Finance Plan as a follow up to his January Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad. This International Climate Finance Plan reflects the Administration’s desire to double, by 2024, U.S. annual public climate finance to developing countries using as a baseline the average level during the second half of the Obama Administration. The Biden Climate Finance Plan is also supposed to be a boon to U.S. companies, particularly manufacturers of products and technologies viewed as environmentally beneficial. Accordingly, the Export-Import Bank of the United States is expected to play a key role in helping the Administration achieve its stated goals. As the U.S. Government’s official export credit agency, the Ex-Im Bank provides direct loans, loan guarantees, and export credit insurance in support of exports of U.S. goods, services, and technologies. By helping foreign buyers (public and private), Ex-Im Bank fills gaps in private export finance and supports U.S. jobs.

https://www.jdsupra.com/legalnews/biden-administration-to-utilize-export-6243085...


Canada’s oil and gas sector received $13 billion in EDC subsidies during the pandemic

(The Narwal, Victoria, 15 April 2021) Despite repeated promises to phase out fossil fuel subsidies, Canada’s federal government dedicated $18 billion in 2020 to assist the country’s oil and gas sector, according to a new report from Environmental Defence that outlines additional support for the industry since the COVID-19 pandemic was declared last March.  Included in the $18 billion are $3.28 billion in direct spending and $13.6 billion in public financing for oil and gas companies that primarily comes from the opaque crown corporation Export Development Canada, according to the report, Paying Polluters: Federal Financial Support to Oil and Gas in 2020.

https://thenarwhal.ca/canada-oil-gas-pandemic-subsidies-report/


Beijing and New Delhi court Indian Ocean armies with ECA loans

(African Intelligence, Paris, 1 April 2021) As China's influence around the Indian Ocean increases, New Delhi is throwing itself wholeheartedly into a diplomatic battle to protect what it considers to be its turf. In March, the Indian Navy trained a group of about fifty members of Madagascar's special forces and India's INS Shardul and Madagascar's MNS Trozona carried out joint naval exercises. During a visit to Mauritius, Indian minister of foreign affairs Subrahmanyam Jaishankar promised Prime Minister Pravind Jugnauth he would establish a $100m export credit for buying Indian military equipment, notably for the acquisition of aircraft and patrol vessels. The two countries also signed an agreement for India to supply a HAL (Hindustan Aeronautics Limited) Dhruv utility helicopter, and a patrol aircraft manufactured by Dornier, a HAL subsidiary. In 2016, New Delhi provided Mauritius with a Dornier Do-228 MP aircraft and then two Sarojini Naidu patrol vessels made by Goa Shipyard the following year. Paris is also beefing up military aid to Madagascar as Beijing and New Delhi jostle for influence.

https://www.africaintelligence.com/eastern-and-southern-africa_diplomacy/2021/04...


Tell EXIM: Cut ties with India's deadly Sasan coal plant

(Sierra Club, Oakland, 23 April 2021) More than a year has passed since the deadly April 10, 2020 coal ash disaster at the US EXIM-financed Sasan coal plant in Singrauli, India. The coal ash disaster was responsible for the deaths of six people and created a massive flood of coal ash that continues to pollute the water and community land almost a year later. Back in 2015, the Inspector General of EXIM issued a report revealing a stunning 19 fatalities at the facility. This followed a 2014 report from Sierra Club and NGOs that revealed forced resettlements, occupied houses being bulldozed in the middle of the night, labor abuses including employees handling hazardous materials without protection, and rampant environmental contamination of the local community. Since the2015 report, monitoring reports have revealed an additional eight deaths at Sasan, but the actual death count is probably even higher.

https://addup.sierraclub.org/campaigns/tell-exim-cut-ties-with-indias-deadly-sas...


US climate summit declarations deal major blow to coal in Asia

(For Our Climate, Seoul, 22 April 2021) Coal in Asia is facing a far more challenging future, with South Korean President Moon Jae-in today pledging to end public overseas coal financing and enhance its 2030 emissions target within this year, and Japan’s Prime Minister Suga committing to toughening emissions cuts at the Leaders Summit on Climate.  South Korea has been called a “climate villain” by the international community for failing to meet unambitious emissions targets and consistently ranking among the world’s top three overseas coal financiers, along with China and Japan. Most recently, the Korean government drew fire for pushing a Green New Deal domestically while its public institutions backed the Jawa 9, 10 coal power projects in Indonesia and Vung Ang 2 coal power project in Vietnam. Prime Minister Suga committed to enhancing Japan’s NDC by 46-50% below 2013 levels by 2030, and China’s President Xi Jinping committed to phasing down coal consumption in the country’s 15th five-year plan period.

http://forourclimate.org/sub/news/view.html?idx=57&curpage=1


China Is Investing in Africa’s Energy and Transportation Infrastructure

(News Ghana, Accra, 9 April 2021) These two articles examine China’s investment policy in Africa that should be read to learn the truth about China’s lending to the continent. One, is a briefing paper from China Africa Research Initiative (CARI) entitled, Twenty Years of Data on China’s Africa Lending. The second is entitled, “Why Substantial Chinese FDI is Flowing into Africa, by Shirly Yu. Combined, both papers provide a thorough analysis of the positive contribution of Chinese investment in Africa, surpassing the United States in all categories. As many African leaders know, without China’s contribution to Africa’s development, especially in infrastructure, Africa would be worse off. There is absolutely no indication that the U.S. and the West would fill that void. The China Africa Research Initiative (CARI) notes that from 2000-2019, China has made $157 billion in loans to Africa. Of these 1,077 loans, 85% have been in categories of infrastructure, of which 65% have been in energy and transportation. Only 13% of Africa’s debt is owed to China. The largest portion of Africa’s debt is owed to multilateral institutions at 32%. The four biggest Chinese banks involved with lending to African countries are China Eximbank, CDB, ICBC, and BOC. China Eximbank–which is China’s official export credit agency, and also the only bank offering government subsidized foreign aid concessional loans–is the largest and since 2000 accounts for 56 percent of all loans.

https://newsghana.com.gh/the-truth-it-is-good-that-china-is-investing-in-africas...


Boeing Forecasts Sufficient Capital for Aviation Finance

(PR Newswire, Chicago, 14 April 2021) Boeing projects global and diversified funding will continue to flow into the aircraft financing sector as the aviation sector navigates the global pandemic and vaccine deployment continues to accelerate. The 2021 CAFMO reports the aircraft financing environment ended 2020 with enough liquidity to finance deliveries, but with stresses particularly in the bank debt and tax equity markets. At the industry level, commercial aircraft delivery funding volume totaled $59 billion, a 40% decrease from 2019 levels. Aircraft lessors executed a significant volume of sale-leaseback transactions, and the industry-wide leased fleet climbed to 46%. Export credit agencies remain a small but important funding source during the pandemic.

https://www.prnewswire.com/news-releases/boeing-forecasts-sufficient-capital-for...


Iraqi, GE achieve financial close of Power Up Plan 4

(Utilities MIddle East, Dubai, 11 April 2021) GE will provide capital and spare parts, repairs and services to 7 Iraqi power plants to help maintain more reliable generation of up to 2.7 gigawatts (GW) of electricity. GE played a key role in bringing the Iraqi Ministries of Finance, Electricity and Planning together with various financial institutions, including export credit agencies, commercial banks and others, to secure financing for the project. This has been facilitated by Etihad Credit Insurance (ECI), the UAE’s Federal export credit company. GE has collaborated with various private and public financial institutions from around the world to help secure over US $2.4 billion in financing since 2015 for energy sector projects across Iraq.

https://www.utilities-me.com/news/17097-iraqi-ge-achieve-financial-close-of-powe...


Russian president signs law to ratify protocol restructuring Belarusian ECA loan

(BELTA, Minsk, 29 April 2021) Russian President Vladimir Putin has signed the law to ratify the protocol restructuring the protocol to amend the Belarusian-Russian intergovernmental agreement on the state export credit to the Belarusian government to build a nuclear power plant. During the ratification, it was noted that some $4.7 billion of the $10 billion loan provided for the construction of the Belarusian nuclear power plant was used as of 1 March this year. According to Russian government estimates, the cost of the construction will be about $6 billion. The protocol contains the following terms for restructuring Belarusian obligations: extension of the loan use period for 2 years - until the end of 2022; postponement of the grace period on the principal from 1 April 2021 to 1 April 2023; replacement of the current mixed interest rate on the loan with the fixed interest rate of 3.3% per annum.

https://eng.belta.by/economics/view/russian-president-signs-law-to-ratify-protoc...


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...


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