ECA Watch Newsletter

What's New for March 2024

"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

  • Exim Approves $500 Million for Bahrain Oil Project Despite Biden’s Climate Commitments.
  • Fury Over $500 Million US Export-Import Bank Loan to Bahrain 'Climate Bomb'
  • No role for export credits in the EU’s development finance
  • First-of-its-kind EU export credit facility to target Ukraine rebuild
  • European Commission: NET-ZERO BY 2050 THE ROLE OF EXPORT FINANCE
  • US & EU differ over the future of fossil fuel subsidies in OECD talks
  • Human rights & environmental destruction in Dutch Atradius DSB insured dredging projects
  • UKEFsigns cooperation agreement with U.S. Department of Energy Loan Programs Office
  • Total ECA Funders Weigh Mozambique Restart After 3 Year Halt
  • Standard Chartered Faces Complaint for Financing Philippine Coal Plants
  • Oil Trader Gunvor to Pay More Than $660 Million to Resolve Bribe Cases
  • Ineos Receives UKEF Backing for Europe's Largest Petrochemical Plant
  • Dynasty Gold Used Slave Labor in China, Canada Watchdog Says
  • Pentagon pitched EXIM Australian nickel investment
  • Korean ECA to provide $187bn in support to bolster exports
  • EXIM on International Women’s Day 2024
  • Ankura business consultants' turning points for EXIM

Exim Approves $500 Million for Bahrain Oil Project Despite Biden’s Climate Commitments.

(New York times, New York, 14 March 2024) A federal bank that finances projects overseas voted Thursday to put $500 million toward an oil and gas project in Bahrain, a transaction that critics said was out of step with President Biden’s climate commitments. Just days before the vote, six lawmakers had urged the bank, the Export-Import Bank of the United States or ExIm, not to move ahead with the financing, given the project’s negative effects on the climate. “We cannot afford to have ExIm undermine domestic and international climate progress,” lawmakers led by Senator Jeff Merkley, Democrat of Oregon, said in a letter to the bank’s board of directors last week. Similar articles appeared in Bloomberg, Reuters, the Huffington Post, Politico and E&ENews. Pope Francis has described delaying action on fossil fuels as “suicidal”, pointing to oil and gas companies continuing to carry out new projects – despite the International Energy Agency recently reaffirming that no new oil, gas, or coal fields are compatible with limiting global temperature rise to 1.5ºC – as humanity faces the increasingly severe consequences of the climate crisis.

https://www.nytimes.com/2024/03/14/climate/exim-financing-biden-bahrain-oil.html


Fury Over $500 Million US Export-Import Bank Loan to Bahrain 'Climate Bomb'

(Common Dreams, Portland, 15 March 2024) Despite a Biden administration pledge to stop backing international fossil fuel projects by 2022, the U.S. Export-Import Bank announced Thursday that it would provide a $500 million loan for oil and gas expansion in Bahrain. The funding marks the fifth time that EXIM has chosen to back a fossil fuel project abroad since President Joe Biden joined the Clean Energy Transition Partnership (CETP) at the United Nations COP26 climate conference in Glasgow in 2021. "EXIM's decision to approve the Bahrain oil and gas project is another alarming step in the wrong direction for climate action, as the bank goes rogue and continues to defy President Biden's promises," Nina Pušic, an export finance climate strategist at Oil Change International, said in a statement, adding that the project was a "huge climate bomb paid for by the American taxpayer."

https://www.commondreams.org/news/exim-bahrain-climate-bomb


No role for export credits in the EU’s development finance

(Counter Balance, Brussels, 13 March 2024) The latest report from Counter Balance titled "No role for export credits in the EU’s development finance" sheds light on the growing presence of Export Credit Agencies (ECAs) in the financing landscape of various EU policy proposals, ranging from development finance to critical raw materials. The report examines recent proposals for greater coordination between export credit and development finance, in particular through initiatives such as the EU's Global Gateway strategy. It highlights significant concerns about suitability of such coordination for development objectives, particularly in the absence of binding human rights and environmental standards, ands weak rules on transparency, due diligence and accountability of ECAs as well as Development Finance Institutions (DFIs). Alexandra Gerasimcikova, Head of Policy and Advocacy at Counter Balance, said: "This is another example of the EU's misuse of public development finance to support the European private sector , continuing a well-trodden neo-colonial path in its global South relations. This approach encourages asymmetrical dependencies, where the only concern is to open up new markets for European capital. We need long-term, sustainable financing to support equitable socio-economic transformation globally, not profits of European corporations. ”

https://counter-balance.org/publications/new-report-export-credit-agencies-and-d...


First-of-its-kind EU export credit facility to target Ukraine rebuild

(Global Trade Review, London, 25 March 2024) EU officials have revealed that the next phase of a pioneering bloc-wide export credit initiative will target the reconstruction of war-torn Ukraine, an undertaking expected to cost almost half a trillion dollars. The European Commission’s Directorate-General for Trade, last week outlined plans to establish a “complex new policy tool” focused on significant infrastructure projects in the country. Details on how the scheme will operate are still being ironed out, with indications it would operate as a risk-sharing mechanism to support the work of domestic export credit agencies (ECAs). In the past 18 months, European ECAs have collectively pledged hundreds of millions of euros towards Ukraine’s reconstruction, which the World Bank forecasts will cost US$486bn. For the past three years, the Commission has deliberated on plans to establish an export credit strategy, and within this, a pan-EU export credit facility. An independent feasibility study last year concluded the bloc may consider creating a reinsurance function for ECAs.

https://www.gtreview.com/news/europe/first-of-its-kind-eu-export-credit-facility...


European Commission: NET-ZERO BY 2050 THE ROLE OF EXPORT FINANCE

High-Level Conference NET-ZERO BY 2050 THE ROLE OF EXPORT FINANCE
Organised by the Directorate-General for Trade, European Commission
Thursday, 25 April 2024, Thon Hotel EU, Brussels, with online participation

Agenda
    • Session one - The Green Transition - Challenges for Export Finance
        ◦ Panel discussion. Representatives of the International Energy Agency, NGOS, business as well as the European Commission will present the context for export credits efforts towards alianment. and will discuss the challenges of the green transition for export finance.
    • Session 2 - National export finance policies: Phasing out fossil fuels and scaling up clean energy
        ◦ Panel discussion. Representatives from ECAs and national governments will discuss approaches they have taken to support the transition to Net Zero by 2050. In Council Conclusions of 15 March 2022, each Member State committed to establishing a national plan to phase out any official support for fossil fuel related projects, while scaling-up clean energy. The panellists will present their national plans and their implementation, followed by a discussion.
    • Session3 - International Cooperation on Export Finance and Climate
        ◦ Panel 3 will assess efforts made at an international level to align the worldwide export credits community with the climate objectives. Two international coalitions of ECAs will present their efforts and be joined by a representative of the European Commission among others.
    • Wrap up & conclusion

https://www.eca-watch.org/sites/default/files/Draft%20Agenda%20-%20Conference%20...


US & EU differ over the future of fossil fuel subsidies in OECD talks

(Financial Times, London, 26 March 2024) Second round of discussions ends without significant progress on export credit policies. The world’s richest countries are at odds over ending subsidies for oil and gas development as the US and EU differed over the extent of a ban, according to people familiar with the talks. OECD countries have held a second round of closed-door talks in Paris to debate proposals by the EU and UK to cut off most export credit agency loans and guarantees for oil, gas and coal mining projects, which are the biggest source of international public finance for the sector. This would follow an agreement in 2021 to stop providing such support for coal-fired power. A person familiar with the talks said the US was still assessing the EU’s proposals, with discussions scheduled to continue in June and November. The US Treasury declined to comment. The US, Canada, France, Germany and the UK were among countries that agreed around the UN COP26 climate summit in Glasgow in 2021 to align their public finance institutions with a Paris agreement goal to limit global warming to ideally 1.5C above pre-industrial levels. But this could affect the role of Exim, the US’s credit export agency, which will need to secure fresh funding from the US Congress in 2026, opening it to political scrutiny from Republican lawmakers who are resistant to cutting off finance for oil and gas, and progressive lawmakers critical of the bank’s climate record.

https://www.ft.com/content/de9fee8b-e369-4603-9054-4cabb20bf349


Human rights & environmental destruction in Dutch Atradius DSB insured dredging projects

(Both Ends, Utrecht, 25 March) Over the past 12 years (2012-2023), Dutch export support to dredging companies amounted to €8.4 billion. Dutch-supported projects have been linked to human rights violations and environmental destruction worldwide, revealing the systemic failure of Dutch policies to protect people and the environment. The Dutch government and Dutch dredging companies are not complying with international standards on human rights, biodiversity, and sustainable development. The report examines 12 years of resistance to destructive dredging projects in 7 locations worldwide.

https://www.bothends.org/en/Whats-new/Publicaties/Dredging-Destruction/


UKEFsigns cooperation agreement with U.S. Department of Energy Loan Programs Office

(UK Government, London, 19 March 2024) UK Export Finance (UKEF), the UK’s export credit agency, has signed a memorandum of understanding (MoU) with the U.S. Department of Energy Loan Programs Office (LPO). The agreement signals UKEF and the LPO’s interest in considering potential new joint financing opportunities for energy and green infrastructure projects.  This is the first-ever MoU between a European export credit agency and LPO, which has closed over $30 billion in financing deals for energy and advanced technology vehicle projects in the last decade. Collaboration and co-financing with UKEF are expected to create new opportunities for British businesses of all sizes – including smaller firms – looking to support US energy and decarbonisation projects.

https://www.gov.uk/government/news/uk-export-finance-signs-cooperation-agreement...


Total ECA Funders Weigh Mozambique Restart After 3 Year Halt

(Bloomberg, 1 March 2024) Lenders to TotalEnergies SE’s Mozambique liquefied natural gas project are weighing the release of billions of dollars in funding as the company plans to resume construction three years after development was halted by Islamist insurgent attacks. The planned onshore facility designed to export the southern African nation’s major gas discoveries attracted the biggest project financing yet seen in Africa. That was before Islamic State-linked militant attacks near the site in 2021 prompted Total to evacuate its personnel and declare force majeure. The US Export-Import Bank, which committed the biggest share of $4.7 billion in financing — and other lenders that comprise a total of about $15 billion in debt — are conducting assessments on reactivating the funding. The assessment of whether to resume financing coincides with a decision by the Biden administration in January to pause approval of new liquefied natural gas export licenses, in recognition that the climate impact from the fossil fuel needs to be reassessed. The US Eximbank’s loan to the Mozambique project was initially provided in 2020, during the administration of former President Donald Trump. While Russia’s invasion of Ukraine sent Europe on a scramble for alternative energy supplies that boosted interest in upcoming LNG production, projects in nations across Africa are still susceptible to a range of issues including political instability and construction delays. Mozambique has the added obstacle of an insurgency that’s become subdued by armed forces, though the Islamist fighters still carry out sporadic deadly raids. Atradius Dutch State Business, the Amsterdam-based Dutch export-credit agency that’s committed $1 billion to Mozambique LNG, said it’s also assessing the situation. “Due diligence is currently ongoing to assess whether we can allow drawdowns under the loan,” it said.

https://www.bloomberg.com/news/articles/2024-03-01/total-funders-weigh-mozambiqu...


Standard Chartered Faces Complaint for Financing Philippine Coal Plants

(BNN Breaking News, Hong Kong, 29 February 2024) Environmental and human rights organizations have taken a stand against Standard Chartered, filing a complaint with Britain's National Contact Point for Responsible Business Conduct (NCP) over the bank's financial involvement in four coal-fired power plants in the Philippines. These groups, including the Philippine Movement for Climate Justice, Inclusive Development International (IDI), Recourse, and BankTrack, assert that the bank's actions have led to detrimental impacts on local communities, including forced evictions, loss of livelihood, and health issues due to pollution. The complaint, lodged with NCP accuses Standard Chartered of failing to perform due diligence that could have prevented the adverse effects experienced by the communities surrounding the coal plants. The NCP, while lacking the authority to enforce action or compensation from Standard Chartered, plays a crucial role in investigating breaches of the OECD Guidelines for Multinational Enterprises. Despite the limitations of the NCP's powers, the UK's export credit agency UKEF has indicated that findings from such investigations will influence future decisions on supporting companies and banks involved in financing controversial projects.

https://bnnbreaking.com/world/philippines/standard-chartered-faces-complaint-for...


Oil Trader Gunvor to Pay More Than $660 Million to Resolve Bribe Cases

(Yahoo Finance, New York, 1 March 2024) Gunvor Group Ltd., one of the world’s top oil traders, will pay more than $660 million to resolve US and Swiss charges that the company paid bribes to Ecuadorian government officials for contracts. The information released by the US is a reminder of the seedy deals made in the not-too-distant-past by some of the biggest firms in commodity trading, which have made billions of dollars in profits on energy market volatility stemming from the Covid-19 pandemic and then the invasion of Ukraine. A shortage of key resources has also seen these companies strengthen ties with governments around the world — just a few months ago, Italy’s export credit agency guaranteed a €400 million ($433 million) loan to Gunvor in return for supplying gas to the country.

https://finance.yahoo.com/news/oil-trader-gunvor-plead-guilty-163111929.html


Ineos Receives UKEF Backing for Europe's Largest Petrochemical Plant

(ChemAnalyst News, New York, 7 March 2024) In a significant development, the UK government has committed to providing a financial guarantee of EUR 700 million to Ineos, led by billionaire Jim Ratcliffe, for the construction of Project One. This ambitious project is poised to become Europe's largest petrochemical plant in three decades. While financial details emerge, environmental groups are gearing up for a legal battle to halt construction, labelling the plant a potential "carbon bomb" that could escalate emissions and contribute to plastic production and waste. The financial backing from the UK government for Ineos' Project One comes to light amidst growing environmental concerns and impending legal challenges. Detractors of the project view it as a significant contributor to carbon emissions and a catalyst for increased plastic production and subsequent waste. These concerns have prompted environmental groups to prepare for legal action aimed at preventing the construction of the plant.

https://www.chemanalyst.com/NewsAndDeals/NewsDetails/ineos-receives-financial-ba...


Dynasty Gold Used Slave Labor in China, Canada Watchdog Says

(Yahoo Finance, New York, 26 March 2024) A Canadian watchdog is calling for penalties against Dynasty Gold Corp. after it concluded the company used forced labor at its Chinese mine, which the miner denies. The Canada Ombudsperson for Responsible Enterprise, an arm of the federal government that investigates possible human rights abuses by companies, conducted a review of the Hatu mine in the Xinjiang region after a coalition of 28 Canadian organizations filed complaints alleging human rights abuses. Sheri Meyerhoffer, the ombudsman, is calling on Canada’s trade minister to refrain from supporting the company in international disputes and ban it from receiving financial support from Export Development Canada.

https://finance.yahoo.com/news/dynasty-gold-used-slave-labor-194833877.html


Pentagon pitched EXIM Australian nickel investment

(Australian Financial Review, Washington, 8 March 2024) The Pentagon held discussions with Resources Minister Madeleine King about how it could co-invest in an Australian nickel project alongside the Australian government to help mitigate the impact of a glut undermining future critical minerals self-reliance. Ms King met with the under-secretary of defence for acquisition and sustainment, Bill La Plante, at the Pentagon on Thursday (Friday AEDT) to discuss options available following a collapse in the nickel price that has led to the closure and write-down of Australian projects. “The options around collaboration of government financing agencies with those out of America might be EXIM, or under the Defence Production Act,” she said. The Export-Import Bank is the export credit arm of the US federal government.

https://www.afr.com/companies/mining/pentagon-pitched-australian-nickel-investme...


Korean ECA to provide $187bn in support to bolster exports

(Pulse News, Seoul, 21 March 2024) The Korea Trade Insurance Corp. (K-SURE), an export credit agency, will provide the largest-ever trade insurance and financial support worth 250 trillion won ($187 billion) to achieve the government‘s target of $700 billion in exports this year. According to sources from the government and the trade industry on Wednesday, K-SURE plans to provide a total of 250 trillion won in support for short-term and medium- to long-term export insurance, export credit guarantees, and exchange rate fluctuation insurance this year.

https://pulsenews.co.kr/view.php?year=2024&no=208075


EXIM on International Women’s Day 2024

(Talk Business, Arkansas, 7 March 2024) International Women’s Day provides the opportunity to highlight the social, economic, cultural and political achievements of women and to address the diverse challenges women face every day. For the last 25 years, EXIM's Minority- and Women-Owned Business division has been hard at work educating U.S. small businesses about the financial services available to help their businesses compete globally. In the last dozen or so years, this small, independent government agency that punches above its weight has provided over financing to about 1,000 women-owned businesses exporting to 150 countries. [Women face unique challenges both in the U.S. and globally, yet the entrepreneurial spirit of woman business owners and leaders remain inspiring, writes former Export–Import Bank of the United States (EXIM) CEO Kimberly Reed.]

https://talkbusiness.net/2024/03/international-womens-day-2024-inspire-inclusion...


Ankura business consultants' turning points for EXIM

(Ankura Consultants, 20 March 2024) The U.S. Export-Import Bank (EXIM) is among the most impactful government agencies when it comes to helping U.S. companies compete for business internationally, finance domestic manufacturing, and build resilient supply chains. Up until 2019, EXIM policies and products were little changed despite the U.S. economy evolving dramatically away from traditional manufacturing to a technology and services-dominated economy. As a result, EXIM users are calling for EXIM to be more relevant and adaptable to our 21st-century economy. Lawmakers are hearing these calls and becoming more receptive to EXIM reform. For example, in 2019, Congress gave EXIM a mandate to bolster U.S. company competitiveness concerning China. EXIM users applauded. More reforms are under consideration in Washington. 

Five Key EXIM Bank Reforms proposed by Ankura in Washington:

  • 1. Revise EXIM’s U.S. Content Policies to Reflect the Modern Global Supply Chain and Export Finance Environment.
  • 2. Codify EXIM’s “Make More in America Initiative” (MMIA)  
  • 3. Raise EXIM’s 2% Statutory Default Limit and Exempt Technology, Nuclear and National Security Related Financings.
  • 4. Modify EXIM’s Underwriting Criterion of “Reasonable Assurance of Repayment.”
  • 5. Repeal or Modify EXIM’s Prohibition of Financing Sales of Defense Articles and Services
https://angle.ankura.com/post/102j21j/proposed-exim-export-import-bank-reforms-d...


What's New for February 2024

"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

  • Joe Biden should end EXIM support for overseas oil and gas projects
  • EXIM Climate Advisors Quit Over Fossil Fuel Plans
  • African Rail Projects Become Battleground For US-China Competition In Strategic Mineral Supply Chains
  • Italian and Japanese ECAs allocate billions for Ukraine
  • ECAs pile in on European battery gigafactories facility
  • Africa’s debt dilemma: The role of ECAs and new strategies
  • SACE plans to back $1.6 billion in debt to Saudi Arabia
  • The real effects of trade financing by ECAs
  • Financing uncertainty clouds South Korean ECA push for massive arms deals
  • Tanzania's Precision Air Faces Legal Action Over $26 Million ATR 42 Debt to EDC
  • India directs ECGC to maintain moratorium on insurance rates for exporters

Joe Biden should end EXIM support for overseas oil and gas projects

(Guardian, London, 14 February 2024) Oil Change International and Friends of the Earth US say the US president must follow his move to restrain fossil fuel expansion at home with similar measures to curb it around the world. We back Bill McKibben’s call for more of the sort of leadership recently shown by President Joe Biden in pausing new liquified natural gas export terminals. Biden has another opportunity to curb the fossil fuel industry’s relentless expansionist agenda and affirm his climate credentials in this election year at an upcoming meeting of the Organisation for Economic Co-operation and Development (OECD). At Cop26, the UN climate conference in Glasgow in 2021, 34 governments, including the US, pledged to end international public finance for fossil fuels by the end of 2022. Despite this, in the last year alone, the US has provided more than $2.2bn to oil and gas projects around the world via its export credit agency, the US Export-Import Bank, and its development finance institution.

https://www.theguardian.com/environment/2024/feb/14/joe-biden-should-end-support...


EXIM Climate Advisors Quit Over Fossil Fuel Plans

(New York Times, New York, 5 February 2024) A federal bank that finances projects overseas is set to vote on Thursday on whether to use taxpayer dollars to help drill oil and gas wells in Bahrain, a contentious decision that prompted two of the bank’s climate advisers to resign, according to people with knowledge of their decisions. The two advisers, who sit on an 18-person board that President Biden created to help the bank take climate change into account when making investments, resigned last week after a meeting about the Bahrain project, according to five current and former bank officials. They described mounting frustration among climate advisory board members, who say they are being kept in the dark about upcoming fossil fuel loans and blocked from making recommendations about whether to approve or even modify a particular project. Climatewire also notes that Biden embedded climate advisers into America’s export credit agency to increase scrutiny over its investments, but their work has mostly been stymied by the agency’s continued pursuit of fossil fuel projects. Five people with firsthand knowledge of the climate council’s work at EXIM described a sense of frustration over investments into projects such as oil and gas development in Bahrain and an Indonesian oil refinery that received a $100 million loan.

https://www.nytimes.com/2024/02/05/climate/export-import-bank-climate.html


African Rail Projects Become Battleground For US-China Competition In Strategic Mineral Supply Chains

(Benzinga, DEtroit, 12 February 2024) A U.S. delegation to a major mining conference in South Africa last week included officials from the Treasury and State departments and the chair of EXIM. Mining and building infrastructure on the continent hasn't traditionally been a U.S. government priority but that is changing now that decarbonization of the economy has taken a front seat and Washington has grown worried about China's dominance of supply chains for strategic materials, including cobalt and copper, used in electric vehicles and renewable energy systems powered by wind turbines and solar panels. The Democratic Republic of Congo (DRC) and Zambia hold more than a 10th of the known copper deposits in the earth's crust. The DRC produces around 70% of the world's cobalt, which is generally a byproduct of copper mining. Most of that cobalt is exported to China, which is by far the world's biggest importer of copper ores and concentrates. So it's no surprise that China has been investing heavily in the African mining and transportation sector. Chinese entities own all or part of most of the producing mines in the DRC. China provided interest-free financing for a railway built in the 1970s linking Zambia's Copperbelt to a port in Tanzania on Africa's east coast. China this week announced a plan to revitalize that railway, providing direct competition to a U.S.-backed rail corridor from the mineral-rich area to Angola on the Atlantic side of the continent. The United States is ramping up its efforts to secure critical metals and in May said it was performing due diligence for a potential financing package to fund and upgrade a rail line from the DRC border to the Lobito Port in Angola on Africa's west coast, expected to greatly reduce the time and cost of trucking copper and cobalt to ports. Canadian company Ivanhoe Mines Ltd is the first mining customer for this Lobito corridor, having this week signed an agreement for the right to transport 120,000-240,000 metric tons a year along the line for five years starting in 2025

https://www.benzinga.com/markets/commodities/24/02/37074505/african-rail-project...


Italian and Japanese ECAs allocate billions for Ukraine

(Interfax & UKRANEWS, Kiev, 19 February 2024) The Italian export credit agency SACE will allocate 1.5 billion euros to support trade and financial operations, in particular, in the field of healthcare and infrastructure. Japan's NEXI will allocate EUR 1.3 billion to support Japanese investors in Ukraine consisting of two parts: guarantees for Japanese investors, as well as a credit line for the export of Japanese goods for the implementation of Ukraine's reconstruction projects. The Ukrainian News Agency earlier reported that Ukraine's reconstruction needs already amount to almost USD 486 billion.




ECAs pile in on European battery gigafactories facility

(Global Trade Review, London, 14 February 2024) Three export credit agencies have thrown their support behind a €4.4bn debt raising for a company building lithium battery gigafactories across Europe, the latest in a string of deals intended to beef up the continent’s renewable energy supply chains. France-based Automotive Cells Company (ACC) says Italian export credit agency (ECA) Sace, Germany’s Euler Hermes and France’s bpifrance have all agreed to support financing provided by a pool of commercial lenders.

https://www.gtreview.com/news/europe/ecas-pile-in-on-european-gigafactories-faci...


Africa’s debt dilemma: The role of ECAs and new strategies

(Trade Finance Global, London, 15 February 2024) The African economy has suffered three major shocks in quick succession, namely, the COVID-19 pandemic, spillovers from geopolitical tensions and supply chain disruptions. This, coupled with widening fiscal deficits, exchange rate volatility and natural disasters have eroded the fiscal space of African economies and increased debt levels. The rising debt in Africa and the high risk of sovereign default hampers the activities of export credit agencies (ECAs) on the continent. However, this challenge has also presented opportunities for flexibility, for example, cover for down payments, higher percentages of cover for both political and commercial risks, as well as longer tenors. The continent facing debt issues, continues to be a major playing field for Export Credit Insurance Corporation of South Africa (ECIC SA), with Ghana accounting for 51.4% of total exposure, followed by Zimbabwe and Ethiopia at 23.0% and 7.7%, respectively. From an industry viewpoint, the ECIC portfolio has shifted away from its traditional mining focus. Currently, power generation leads as the top sector, accounting for 45.8% of total exposure, with construction following closely at 40%.

https://www.tradefinanceglobal.com/posts/addressing-africas-debt-dilemma-the-rol...


SACE plans to back $1.6 billion in debt to Saudi Arabia

(Reuters, Dubai, 12 February 2024)  Italy’s export credit agency SACE plans to back $1.6 billion in loans to Saudi Arabia over the next 12 to 18 months, the agency’s chief told Reuters, potentially boosting the country's search for outside investment at a time of weak oil prices. Saudi Arabia last month sent requests for proposals to banks for the refinancing of a $10 billion syndicated loan, new bond issuance, and for ECA-backed funding. Saudi Arabia’s national oil giant, Aramco, has also been tapping this form of financing. The company is looking to raise billions of dollars in ECA-backed loans involving agencies across the globe ahead of its planned stock market listing, sources told Reuters last month. SACE, which is meeting prospective clients in the United Arab Emirates and Saudi Arabia this week, is evaluating projects in the Middle East and North Africa worth about $15 billion, $5 billion of which in the United Arab Emirates.

https://www.reuters.com/article/idUSKBN1FW0X8/


The real effects of trade financing by ECAs

(Centre for Econonic Policy Research, London, 9 February 2024) Trade finance subsidies, usually provided by export credit agencies, are the predominant tool of industrial policy. This column discusses the effect of the effective shutdown of the US EXIM from 2015—2019 on firm outcomes. It finds that firms which previously relied on EXIM support saw a 18% drop in sales after the agency closed, driven by a reduction in exports. Firms affected by the shutdown also laid off employees and curtailed investment. Overall, export credit subsidies can boost exports even in countries with well-developed financial markets, without necessarily leading to a misallocation of resources. Exports are often seen as boosting economic growth. But exporting internationally requires upfront financing. Recognising this, around one hundred countries around the world have set up export credit agencies to provide subsidised trade financing to support their country’s exporters. Today, such subsidies are the predominant tool of industrial policy around the world, especially in advanced economies. In absolute terms, China, Germany, Korea, and the US spend the most on these programmes. The Scandinavian countries, as well as China and Korea, are among the heaviest users of export credit agency support relative to their exports as we show in panel B of Figure 1. To better understand the role of export credit agencies, we study the temporary shutdown of the Export-Import Bank of the United States (EXIM) between 2015 and 2019, prompted by a lapse in its charter—a first since the agency's inception in 1945 – and lack of quorum on its board of directors. The shutdown resulted in an 80% drop in the volume of EXIM-supported transactions in 2016 compared to 2014. The volume of export credit support provided by EXIM only returned to pre-shutdown levels after the resumption of full operations in December 2019.

https://cepr.org/voxeu/columns/real-effects-trade-financing-export-credit-agenci...


Financing uncertainty clouds South Korean ECA push for massive arms deals

(Reuters, London, 8 February 2024) Legislation aimed at increasing South Korea's import-export lending to support huge new defence sales has stalled amid partisan deadlock ahead of a divisive parliamentary election, officials and analysts said. South Korea's ruling and opposition parties have both introduced bills to boost the state bank's equity capital to 25 trillion-35 trillion won ($19 billion-$26 billion), raising the lending limit to 10 trillion-14 trillion won, as the country seeks to expedite Poland's $22 billion weapons purchase. The sale is a key part of South Korea's plan to become the world's fourth-largest defence exporter by 2027. But under current law, the Export-Import Bank of Korea cannot lend more than 40% of its roughly 15 trillion won of equity capital, or about 6 trillion won, to a single borrower. The state bank already provided about 6 trillion won in credit during the first phase of the deal with Poland, South Korea's biggest-ever weapons sale. If there is no credit line to finance procurement from South Korea it could put the unsigned procurement of 308 K9 howitzers and 820 K2 Black Panther tanks in jeopardy,

https://www.reuters.com/business/aerospace-defense/financing-uncertainty-clouds-...


Tanzania's Precision Air Faces Legal Action Over $26 Million ATR 42 Debt to EDC

(Simple Flying, London, 10 February) Tanzania-based regional carrier Precision Air is in a legal battle with Canadia's Export Development Canada (EDC) for an aircraft financing agreement involving two ATR 42-600s acquired over ten years ago. EDC is claiming about $26 million in unpaid rentals and termination fees. The financial agreement between the two parties dates back to 2012, when EDC provided financial assistance to Precision Air to acquire two ATR 42-600s as part of its fleet expansion plan. The agreement involved Irish aircraft leasing firm Antelope Leasing Finance, which acted as the debtor and held the turboprops as collateral on EDC's behalf.

https://simpleflying.com/precision-air-26-million-atr-debt-legal-action/


India directs ECGC to maintain moratorium on insurance rates for exporters

(India Times, Gurugram Haryana, 7 February 2024) The Indian government on Wednesday said it has directed the Export Credit Guarantee Corporation (ECGC) to maintain a moratorium on insurance rates for Indian exporters in the wake of the Red Sea crisis. State-owned ECGC is an export promotion organisation, seeking to improve the competitiveness of Indian exports by providing them with credit insurance covers. Minister of State for Commerce and Industry Anupriya Patel said that the ECGC continues to provide insurance coverage to exporters. She said that the corporation has not refused cover for export shipments routed through the Red Sea and the credit risk cover is being provided based on the risk assessment and creditworthiness of overseas buyers and terms of payment.

https://economictimes.indiatimes.com//news/economy/foreign-trade/govt-directs-ec...


What's New for January 2024

"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

  • Biden Administration Faces Pushback on Another Gas Project, This Time Overseas
  • JBIC financing for two gas power projects in Mexico would violate the G7 agreement
  • Amid Corruption Charges, Groups Demand EXIM Halt Payments to Trafigur
  • ECAs support €1.08 billion green loans for Cadeler
  • UKEF underwrites financing for another section of Turkish high speed rail network
  • Red Sea crisis: Indian shipping costs and times and export credit premiums up
  • Brodies Guides On War Risk Insurance For Ukrainian Exports
  • H2 Green Steel Boden: Complex financing includes Euler Hermes
  • Swedish “Green” Steel Plant Secures $7 Billion in Financing
  • Northvolt gets $5bn green loan for European EV push
  • Petroperú Desperate for Cash Loses $500M SACE Loan Guarantee
  • How to Deal with Sinosure as an Importer
  • European Union readies €300mn ECA pilot
  • UKEF: Taxpayers underwrite French contractor’s Saudi project
  • African tri-nation transport project to start Phase II
  • Belgian ECA Credendo helps expansion of Montevideo Port to Boost Uruguay's Foreign Trade
  • FLASH: US Exim readies for US$2bn domestic financing boom

Biden Administration Faces Pushback on Another Gas Project, This Time Overseas

(New York Times, New York, 26 January 2024) Even as the Biden administration, under pressure from environmentalists, hits pause on its approval of a major natural gas export terminal in the United States, it faces another big gas decision overseas. A $13 billion natural gas export project in Papua New Guinea led by TotalEnergies and Exxon Mobil is on a shortlist of projects set to receive financing from the U.S. Export-Import Bank, or Ex-Im, which supports American businesses around the world.The Papua LNG gas project would join a portfolio of oil and gas projects the bank funds, including an oil refinery in Indonesia and an oil tank project in the Bahamas. The bank is also considering financing an offshore pipeline and natural gas plants in Guyana. Some climate activists see a big contradiction between climate actions the government is taking in the United States versus around the world. “He’s done so much at home,” said Friends of the Earth's Kate DeAngeli, but he “can’t claim to be a climate champion when the U.S. is propping up this fossil fuel infrastructure all over the world.”

https://www.nytimes.com/2024/01/26/climate/lng-terminals-financing-cp2.html


JBIC financing for two gas power projects in Mexico would violate the G7 agreement

(JACSES, Tokyo, 30 January 2024) The Japan Center for a Sustainable Environment and Society notes that two gas-fired combined cycle power projects in Mexico are now under consideration for financing by the Japan Bank for International Cooperation (JBIC). One is in San Luis Potosi and the other one in Salamanca. When Japanese NGOs asked the consistency of these two projects with the agreement reached at G7 Elmau Summit to end new public financing for fossil fuel energy, JBIC did not provide specific rationale on its judgment that the policy of the Mexican government is consistent with the 1.5 degree target. If JBIC provides support, it is highly likely that it constitutes a violation of the G7 agreement, thus JBIC should stop consideration for financing. JBIC placed these two projects on its list of projects under consideration for financing on November 2, 2023.

https://jacses.org/en/406/


Amid Corruption Charges, Groups Demand EXIM Halt Payments to Trafigura

(Friends of the Earth, Washington, 23 January 2024) Civil society and environmental groups today requested that the US Export-Import Bank withdraw funding from the Trafigura Group, a major global commodity trader. In December, Bloomberg reported that Trafigura was charged with corruption and bribing elected officials in Angola. In an open letter to EXIM, asking the bank to halt its payment of $400 million to Trafigura, a financing agreement that was approved in July 2023. This letter questions EXIM’s due process in analyzing funding recipients and its method of reconsideration when corruption is revealed. This comes on the heels of both the United States and Swiss governments launching investigations into the company’s affairs. Despite this, EXIM last year gave Trafigura the massive financing of $400 million to purchase liquefied natural gas, a decision the groups charge was made based on flawed environmental damage assessments. EXIM is soon expected to approve $660 million for the Gas to Energy Project in Guyana, despite similar concerns from activists. In 2023 the institution funded nearly $1 billion for overseas oil and gas development, violating President Biden’s 2021 Executive Order.

https://foe.org/news/exim-halt-payments-trafigura/


ECAs support €1.08 billion green loans for Cadeler

(The Asset, Hong Kong, 3 January 2024) Oslo-listed offshore wind turbine installation company Cadeler has raised €1.075 billion (US$1.19 billion) via two syndicated green financing facilities with backing from export credit agencies (ECAs). The revolving facilities will be used to refinance Cadeler and Eneti’s existing debt, as well as finance merger-related costs. Ancillary lines have been set up to support the project-related letter of credit (LC) needs of the company, and term facilities will finance the upgrade of cranes on two of Cadeler’s O-Class offshore installation vessels. The financing for the crane upgrades has ECA backing from the Export and Investment Fund of Denmark (Eifo). A facility amounting to €425 million, which is backed by the China Export & Credit Insurance Corporation (Sinosure), will be used to finance the acquisition of two new X-Class wind turbine installation vessels currently under construction in China.

https://www.theasset.com/article/50681/ecas-support-108-billion-green-loans-for-...


UKEF underwrites financing for another section of Turkish high speed rail network

(Railway Gazette, Sutton, 22 January 2024) The UK government’s export credit agency UKEF has agreed to underwrite a €1·03bn loan arranged by Mitsubishi UFJ Financial Group for three Turkish companies to construct Turkey’s 140 km long Yerköy – Kayseri route modernisation scheme. UKEF has partnered with export credit agencies from Italy (SACE), which reinsured €249m of the guarantee, Poland’s KUKE, which reinsured €205m, and Austria’s OeKB (€176m). A separate €220m commercial loan from the Islamic Corporation for the Insurance of Investment & Export Credit makes the total financing package worth €1·2bn. [This is the third Turkish high-speed railway to be backed by UK Export Finance and its counterparts in Italy, Poland, and Austria. Combined, the projects amount to some 900km of rail. The two others are the Ankara-Izmir and the Mersin-Gaziantep lines.]

https://www.railwaygazette.com/infrastructure/uk-underwrites-financing-for-anoth...


Red Sea crisis: Indian shipping costs and times and export credit premiums up

(Financial Express, Noida, 18 January 2024) An Indian inter-ministerial meeting on Red Sea crisis on Wednesday has asked the Department of Financial Services (DFS) in the finance ministry to monitor the credit requirements of exporters and ensure that credit flows to them are maintained, a senior official said Wednesday. Different reports have said the conflict in the Red Sea is leading to increased shipping costs by 40-60%, insurance premiums by 15-20% and delays of up to 20 days due to rerouting of some ships away from Suez Canal. The cost and turnaround time of shipments have increased as two shipping lines including Maersk have stopped services but volume is not affected, the official said.He said so far there has just been time and cost impact, nothing else. In the rapidly escalating situation in the region the shipping rates on some routes have gone up by six times. Exporters fear that the impact could come in a big way if the situation does not normalise. The government may have to look at alternate routes. On its part the ministry of commerce has asked Export Credit Guarantee Corporation (ECGC) not to increase the premium on credit insurance and other related services.The insurance covers enable the banks to extend timely and adequate export credit facilities to the exporters. [Around 80% of India’s merchandise trade with Europe passes through the Red Sea and substantial trade with the US also takes this route. Both geographies account for 34% of India’s total exports. The Red Sea strait is vital for 30% of global container traffic and 12% of world trade.]

https://www.financialexpress.com/policy/economy-red-sea-crisis-export-credit-to-...


Brodies Guides On War Risk Insurance For Ukrainian Exports

(USA Herald, New York, 12 January 2024) In a groundbreaking move, Scottish law firm Brodies LLP has steered Ukraine’s Export Credit Agency through uncharted territory, unveiling a novel war risk insurance process to safeguard shipowners and vessel charterers amidst the ongoing conflict with Russia. In a daring legal maneuver, Brodies LLP has strategically advised Ukraine’s Export Credit Agency, paving the way for a groundbreaking war risk insurance process. The initiative aims to fortify shipowners and vessel charterers, allowing uninterrupted goods shipments across the tumultuous Black Sea during the persisting conflict with Russia. Brodies unveiled the revolutionary insurance arrangement, orchestrating a financial ballet that channels funds to accounts at two Ukrainian state banks, Ukrgasbank and Ukreximbank. These financial powerhouses are then empowered to issue irrevocable letters of credit, each confirmed and guaranteed by Germany’s DZ Bank AG.

https://usaherald.com/brodies-guides-on-war-risk-insurance-for-ukrainian-exports...


H2 Green Steel Boden: Complex financing includes Euler Hermes

(TXF News, London, 23 January) H2 Green Steel (H2GS) – the world’s second green hydrogen mega project – has taken a similar approach to Neom for its hydrogen-powered steel manufacturing project in Boden, Sweden. The simple math – 1% overall cost increase for 40% emissions decrease on the final manufactured product – has enabled H2GS to get a long list of very solid credits signed up to term sheets or steel supply agreements. The multi-sourced debt facilities backing the €6 billion-plus project was signed on 21 December 2023 and are expected to reach financial close in Q1. The overall financing for H2GS comprises €4.15 billion of senior and junior debt... and debt facilities for the project comprised of two €1.2 billion 12.75-year tranches with 95% and 80% cover provided by Euler Hermes and Riksgalden (Swedish National debt Office) respectively, a €200 million 12.75-year direct loan from the EIB, a €250 million 12.75-year term loan, a €300 million 12.75-year revolving credit and a €400 million 12.75-year contingency tranche.

https://www.txfnews.com/articles/7631/H2-Green-Steel-Boden-Long-on-ambitions-low...


Swedish “Green” Steel Plant Secures $7 Billion in Financing

(Thomasnet, New York, 29 January 2024) The developer of the world’s first large-scale plant that will manufacture “green” steel has now secured some $7 billion in financing for the project to date, company officials announced. More than 20 lenders signed onto the debt financing, including the European Investment Bank, the Swedish Export Credit Corp., and numerous commercial banks. The new equity funding, meanwhile, came from the Microsoft Climate Innovation Fund and Siemens Financial Services, among others. H2 Green Steel recently disclosed new debt financing agreements worth $4.6 billion and said that its equity funding had increased by $325 million — up to $2.3 billion. It has also received a grant from a European Union energy innovation initiative worth about $270 million. H2, founded in Stockholm in 2020, aims to replace the use of fossil fuels in heavy industry with hydrogen fuel produced with renewable electricity, thereby slashing greenhouse gas emissions. The company says its steelmaking process reduces carbon dioxide emissions by up to 95% compared to conventional steel production, which uses blast furnaces fired by coke, a coal-based fuel.

https://www.thomasnet.com/insights/worlds-first-green-steel-plant-secures-7-bill...


Northvolt gets $5bn green loan for European EV push

Northvolt AB, the Swedish battery maker that counts BMW, Volvo Car and Volkswagen among its clients, has secured a $5 billion (€4.59 billion) green loan to bolster production and expand recycling efforts. The package backed by the Luxembourg-based European Investment Bank is among the largest green loans on record. Northvolt is central for European efforts to establish an electric-vehicle supply chain that can rival Asia and the US. The company plans to use the money to expand production at its main Swedish factory in Skelleftea and grow an adjacent recycling plant. It’s funding is guaranteed by export credit agencies and provided by 23 commercial banks in addition to the Nordic Investment Bank and the European Investment Bank, which is lending slightly over $1 billion (€942.6 million). A significant portion of the loan is covered with certain guarantees combined with direct funding from the Swedish National Debt Office, Euler Hermes, the Export-Import Bank of Korea, Japan’s Nippon Export and Investment Insurance, or NEXI, and the Korea Trade Insurance Corporation.

https://www.luxtimes.lu/europeanunion/northvolt-gets-5bn-green-loan-for-european...


Petroperú Desperate for Cash Loses $500M SACE Loan Guarantee

(Amazon Watch, Oakland, 25 January 2024) In 2023, the Peruvian state-owned oil company, Petroperú, faced one of its worst financial crises, due to its accumulation of up to $6.5 billion in debt for its Talara Refinery Project, which will likely serve as a major driver of oil exploration and exploitation in Indigenous territories of the Amazon and in ancestral fishing grounds in the north Peruvian coast. Due to successful community opposition against oil activities, Petroperú was unable to secure a $500 million loan guarantee in 2023 from Italy’s export credit agency (SACE) partly due to intense scrutiny from Indigenous nations and strong backlash against Petroperú in Italy. The world’s largest fossil fuel financiers, Citigroup and JPMorgan Chase, are considering supporting the company again by arranging or underwriting Petroperú’s $1 billion bond issuance. This is despite ongoing demands by a united front of multiple Indigenous nations of the Peruvian Amazon for international financiers to halt new financing for Petroperú.

https://amazonwatch.org/news/2024/0125-petroperu-is-desperate-for-cash-but-were-...


How to Deal with Sinosure as an Importer

(Global Trading Magazine, Dallas, 8 January 2024) An in-depth guide on handling the Sinosure export credit insurance services and getting deferred payments for your imports from Chinese suppliers. Payment terms in contracts with Chinese suppliers can require as much as 30% of the total up front as a hedge against the importer’s nonpayment, also known as its credit risk. The remainder of the payment is usually due before the Chinese exporter ships the goods. Sinosure, the China Export & Credit Insurance Corporation, is an official financial institution designed to help in cases like that. It provides export credit insurance to companies in China seeking to do business with foreign buyers without having to bear the risk of nonpayment. While Sinosure’s clients are the exporting Chinese companies, its business benefits importers outside of China by eliminating cash flow issues and extended delivery times. With this insurance safeguard, suppliers are more willing to extend deferred payment terms and trade turnover with their foreign partners, to the mutual benefit of both parties. In the year 2022, Sinosure ensured export credit worth more than $700 billion for approximately 240,000 Chinese exporters. This compares with only $2.61 billion insured that year by US Exim. Sinosure insures so much more because it is a key part of the country’s export drive, and it maintains a large sales and customer service network throughout China, whereas US Exim generally focuses on a few large-scale industries like airplanes, power generation, and infrastructure.

https://www.globaltrademag.com/how-to-deal-with-sinosure-as-an-importer/


European Union readies €300mn ECA pilot

(Global Trade Review, London, 17 January 2024) The European Union is advancing plans to launch its inaugural risk-sharing instrument for the export credit sector, with a pilot initiative aimed at boosting SME exports to war-torn Ukraine. The European Commission is developing the scheme alongside the EU’s SME financing arm, the European Investment Fund (EIF), which is expected to guarantee export credit deals involving Ukrainian buyers. It will be the first EU-level risk-sharing instrument provided to the export credit sector, the European Commission says, and highlights how Brussels is increasingly seeking to wield the might of export credit agencies (ECAs) from its 27-member states to advance policy goals, such as green energy, overseas investment and competing with China and the US. Austria’s ECA OeKB, Finnvera, the European Investment Fund, Atradius DSB, Denmark's EIFO and Poland’s ECA Kuke are studying participation.

https://www.gtreview.com/news/europe/european-union-readies-e300mn-eca-pilot/


UKEF: Taxpayers underwrite French contractor’s Saudi project

(Construction Index, London, 5 January 2024) The UK’s export credit agency has guaranteed an Islamic Murabaha financing facility for the development of Six Flags Qiddiya City near Riyadh. UK Export Finance (UKEF) has guaranteed an Islamic Murabaha financing facility for £550m signed by Qiddiya Investment Company to finance the construction of the theme park. This is being undertaken by a joint venture led by Bouygues Bâtiment International of France and local firm Almabani General Contractors. UK Export Finance chief executive Tim Reid said: “Saudi Arabia’s ‘Vision 2030’ is hugely ambitious, and UKEF is determined to ensure that British businesses can benefit from the enormous exporting opportunities it offers.

https://www.theconstructionindex.co.uk/news/view/uk-taxpayers-underwrite-french-...


African tri-nation transport project to start Phase II

(Southern Africa Freight News, Johannesburg, 15 January) The African Development Bank-financed Tanzania-Burundi-DR Congo Standard Gauge Railway (SGR) Project has commenced to Phase 2. The bank's financing is intended to construct 651 kilometres on the Tanzania-Burundi railway line. The bank will provide $98.62 million to Burundi in the form of grants and $597.79m to Tanzania in loans and guarantees. As the Initial Mandate Lead Arranger, the bank will structure and mobilise financing of up to $3.2 billion from commercial banks, development financial institutions, export credit agencies and institutional investors. The total cost of the project both in Tanzania and Burundi is estimated at nearly $3.93bn. The construction of this railway will allow Burundi to intensify the exploitation of nickel, of which the country has the tenth-largest deposit in the world in the Musongati mining fields. The country also has resources such as lithium and cobalt,

https://www.freightnews.co.za/article/african-tri-nation-transport-project-start...


Belgian ECA Credendo helps expansion of Montevideo Port to Boost Uruguay's Foreign Trade

(BNAmericas, Santiago, 10 January 2024) IDB Invest will provide $103 million in financing to Terminal Cuenca del Plata S.A. (TCP), including the mobilization of resources for $46 million from Banco Bilbao Vizcaya Argentaria S.A. (BBVA) for the design, construction and operation of the expansion of the Port of Montevideo. Additionally, IDB Invest financing will be complemented by a financing facility given to commercial banks by Belgium's export credit agency, Credendo, for a total amount of approximately $340 million.

https://www.bnamericas.com/en/news/idb-invest-supports-the-expansion-of-the-port...


FLASH: US Exim readies for US$2bn domestic financing boom

(Global Trade Review, 31 January 2024) The Export-Import Bank of the United States (US Exim) is anticipating a “significant” rise in domestic financing activity in the coming year as it works to rejig its offering and grow investment in key sectors such as semiconductors, critical minerals and renewable energy.  US Exim first launched the Make More in America (MMIA) programme nearly two years ago, following a 100-day review of critical supply chains.  Deals to-date for some $350m are dwarfed by the financing extended by rival export credit agencies under their equivalent programmes, such as the UK’s, which since releasing its export development guarantee in 2020 has rolled out billions of dollars in support to large corporates such as Ford and Jaguar Land Rover.  “The MMIA initiative is going to be a boon for American manufacturers and American manufacturing. We have US$2bn in the pipeline,” said US Exim’s first vice-president and vice-chair of its board, Judith Pryor, while noting deals are split across a range of industries, such as energy efficiency, battery storage, satellites and critical minerals.

https://www.gtreview.com/news/americas/us-exim-readies-for-us2bn-domestic-financ...


What's New for December 2023

"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 supporting billions in global trade form net-zero alliance facing civil society scepticism
  • At COP28, Export Development Canada joined Net Zero Alliance Despite Fossil Financing
  • Norway joins 40-signatory partnership to end international public finance for fossil fuels
  • Texas Gulf Coast communities speak out against Japanese ECA backed LNG development
  • EXIM Lent Nearly $1 Billion to Fossil Fuel Projects in 2023
  • PPIB Announces $2 Billion Financial Close of Thar Coal-Fired Plant
  • Saudi Arabia concludes €1 billion financing deal with Italy’s SACE
  • North Field expansion project - a quantum leap in leadership of Qatar's global energy landscape
  • TFX: Export finance trends of 2023: ECAs spearhead success amidst global challenges and geopolitical shifts
  • Gunvor gets gas loan backed by SACE
  • Ukraine strikes deal to get 2 Royal Navy minehunters from UK with UKEF support
  • Italy’s export credit agency SACE unveils its ambitious ESG strategy at COP28
  • Pakistan’s Export-Import Bank formally launched
  • Türk Eximbank expected to provide exporters $41 billion in 2023

ECAs supporting billions in global trade form net-zero alliance facing civil society scepticism

(UNEP, Dubai, 4 December 2023) At COP28 today, 8 leading export credit agencies, in partnership with the University of Oxford, Future of Climate Cooperation, and the UN Environment Programme Finance Initiative (UNEP FI) launched the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA), the first net-zero alliance comprising public finance institutions globally. In working to deliver net-zero economies by 2050, the NZECA will help decarbonise global trade and facilitate joint action from public and private finance. Combined, these ECAs supported an estimated US$120 billion in global trade in 2022 alone, providing finance and other services such as insurance and guarantees to facilitate local companies’ international exports. The export credit industry is hugely influential globally, with up to $28 trillion – comprising 80 to 90 per cent - of international trade relying on export financing, much of it provided by governments via export credit agencies and export-import banks. But NGOs note that a study by Net Zero Tracker found the bulk of “net zero” commitments from fossil fuel companies were meaningless as they either included no short-term emissions reduction plans, or did not fully cover scope 3 emissions (that is, the pollution released when a company’s products are used). Net Zero hopes/assumes that in the future technology will come along that can suck the carbon out of the atmosphere so that they can just keep going as it is until then.

https://www.unep.org/news-and-stories/press-release/export-credit-agencies-suppo...


At COP28, Export Development Canada joined Net Zero Alliance Despite Fossil Financing

(Environmental Defense, Toronto, 4 December 2023) At COP28, Export Development Canada (EDC) joined other export credit agencies to launch the Net-Zero Export Credit Agencies Alliances (NZECA), an alliance of international public finance institutions committed to reaching net-zero greenhouse gas emissions by 2050. However, EDC continues to provide public financing to oil and gas companies. In 2022, EDC provided around CAD $20 billion in public financing to oil and gas companies (which includes $12  billion for the Trans Mountain Expansion, or TMX, pipeline). So far this year, they have provided around CAD $12 billion (which includes $6  billion in loans for the TMX pipeline). “Crown corporation Export Development Canada has no place in a net zero alliance. Canada’s export credit agency continues to provide tens of billions each year to oil and gas companies, using publicly-back money to finance the companies and the activities that are fueling the climate crisis. Years of climate promises, including their own net zero commitment, have not made a difference." said Julia Levin, Associate Directorof Environmental Defense in Dubai.

https://environmentaldefence.ca/2023/12/04/at-cop28-export-development-canada-jo...


Norway joins 40-signatory partnership to end international public finance for fossil fuels

(Oil Change International, Washington, 2 December 2023) Norwegian Prime Minister Jonas Gahr Støre  announced today that Norway has joined the Clean Energy Transition Partnership (CETP, sometimes called the Glasgow Statement) at the UN COP28 climate summit in Dubai. Boost for CETP which now boasts 40 signatories (including US, Canada, and many EU countries), shifting billions per year out of fossil fuels to clean energy. Norway – as a major oil & gas producing nation – boosts the initiative by joining, building momentum at the OECD level to create new rules to end international fossil finance across the OECD. This move from Norway bolsters an international campaign to adopt new rules at the OECD (the group of the world’s wealthiest countries) to end export finance support for fossil fuels. OECD countries supported fossil fuel exports by an average of USD 41 billion from 2018 to 2020, almost five times more than clean energy exports. The EU, Canada, and UK have tabled a proposal to end this finance. Having signed onto the CETP, Norway is now expected to deliver on the CETP’s commitment to “driving multilateral commitments in international bodiesby aligning with the UK, EU, and Canada in the push for oil and gas restrictions at the OECD.

https://priceofoil.org/2023/12/02/norway-joins-40-signatory-partnership-to-end-i...


Texas Gulf Coast communities speak out against Japanese ECA backed LNG development

(Oil Change International, Washington, 28 November 2023) Representatives of Friends of the Earth Japan & Oil Change International traveled to Texas & Louisiana in early November for a week-long tour, organized by Texas Campaign for the Environment, to witness & learn about the impacts of LNG development on local communities. The Japanese government is the largest global financier of LNG export terminals, providing 50% of international public finance, or $39.7 billion, for LNG export capacity built from 2012-2022, as well as projects under construction or expected to be built by 2026. In the Gulf South, Japan’s export credit agencies, the Japan Bank for International Cooperation and Nippon Export and Investment Insurance, provided $3.7 billion in financing for the Freeport LNG terminal & $4.5 billion for Cameron LNG in 2014.  The Japanese & Korean governments are also rolling out plans to develop new ammonia & hydrogen production & export facilities globally including in Lake Charles & Corpus Christi. These projects would worsen the climate crisis & subject communities to further exploitation & harm. The proliferation of LNG projects & petrochemical facilities, coupled with regulatory failure to enforce environmental standards, have allowed the fossil fuel industry to severely pollute the air & water without consequence. Residents of Port Arthur & other communities on the Gulf Coast suffer from high rates of cancer, respiratory infections & migraines. Water security is also an issue. Industrial water use is prioritized over the needs of local residents. Despite the serious health and safety concerns with the Freeport LNG terminal, Japan’s export credit insurance agency NEXI is planning to support the expansion of the Cameron LNG terminal located on Calcasieu Lake in Louisiana.

https://priceofoil.org/2023/11/28/the-smell-of-death-communities-speak-out-again...


EXIM Lent Nearly $1 Billion to Fossil Fuel Projects in 2023

(New Republic, New York, 28 December 2023) President Joe Biden pledged to stop financing such projects overseas, and yet the U.S. Export-Import Bank continues to do so. While much of the country was occupied last week with holiday travel and time with family, a little-known government agency approved a $90 million guarantee for ING Capital to finance a liquified natural gas export facility in Texas. All told this year, that agency—the U.S. Export-Import Bank—has approved nearly $1 billion in fossil fuel lending, including $100 million for expanding an oil refinery in Indonesia and $400 million of insurance for revolving credit facilities to help commodity trading giant Trafigura purchase LNG. Not long after taking office, in January 2021, President Joe Biden signed an executive order which tasked the bank and other federal agencies with identifying “steps through which the United States can promote ending international financing of carbon-intensive fossil fuel–based energy.”

https://newrepublic.com/article/177757/export-import-bank-1-billion-fossil-fuel-...


PPIB Announces $2 Billion Financial Close of Thar Coal-Fired Plant

(ProPakistani, Islamabad, 14 December 2023) The Private Power and Infrastructure Board (PPIB) announced the $2 billion financial close of the Thar coal-fired power project, which is currently under Chinese management. The project’s main sponsor is Shanghai Electric Group Corporation, while the coal supplier from Thar Block-1 is Sino-Sindh Resources Limited (SSRL). The ICBC, China Development Bank, Bank of Communications Co. Limited, China Minsheng Bank Corporation, Postal Savings Bank of China Co Limited, and Agriculture Bank of China are the main sponsors while Sinosure, China’s premier provider of export credit insurance, was the insurer. The project, which has a power capacity of 1,320MW, is part of the China-Pakistan Economic Corridor (CPEC). This plant brings the total installed capacity of five commissioned Thar coal-based power plants to 3,300MW.

https://propakistani.pk/2023/12/14/ppib-announces-2-billion-financial-close-of-t...


Saudi Arabia concludes €1 billion financing deal with Italy’s SACE

(Economy Middle East, UAE) Saudi Arabia’s National Debt Management Center (NDMC) has concluded a financing arrangement worth €1 billion with the Italian insurance-financial group SACE. The deal is part of a broader initiative to strengthen trade and investment relations between Saudi Arabia and Italy. The kingdom is seeking to benefit from all available financing resources for government projects as part of its Vision 2030 strategy. Notably, the financing was made through several international banks and aims to finance Saudi Vision 2030’s development and infrastructure projects. Moreover, it is Saudi Arabia’s third financing of its kind following other financing from financial institutions through other export credit agencies.

https://economymiddleeast.com/news/saudi-arabia-financing-arrangement-sace/


North Field expansion project - a quantum leap in leadership of Qatar's global energy landscape

(Gulf Times, Doha, 25 December 2023) Qatar’s energy sector saw a quantum leap in October this year when His Highness the Amir Sheikh Tamim bin Hamad al-Thani laid the foundation stone of the North Field expansion project, which will raise the country’s LNG production capacity from the current 77mn tonnes per year (mtpy) to 126mtpy by 2026. QatarEnergy is partnered in this global project by TotalEnergies, Shell, ConocoPhillips, ExxonMobil, Eni, Sinopec, and CNPC. The article outlines a large series of LNG project and sales to multiple European countries, noting they have also secured $4.4bn financing for the Ras Laffan Petrochemicals project, a world scale integrated polymers complex in Ras Laffan Industrial City, Qatar. The senior debt financing package is comprised of commercial and Islamic facilities as well as Export Credit Agency (ECA) financing.

https://www.gulf-times.com/article/674257/business/north-field-expansion-project...


TFX: Export finance trends of 2023: ECAs spearhead success amidst global challenges and geopolitical shifts

(TFX News, London, 22 December 2023) ECAs have looked to adapt their support for buyers and exporters in a high interest rate environment, revisiting and revamping older policies. The success of this evolution can be seen in the data – export finance is set for a record-breaking year. Greater flexibility brings diversification in financing instruments – the rise of untied support schemes for large corporates has continued with major new deals involving Trafigura, Siemens Energy and Gunvor. This has also given ECAs a prominent new geopolitical role. Realpolitik has driven ECAs into the world of energy security and they must now be more proactive than ever in their support for national interest. Reforms to the OECD Arrangement on Officially Supported Export Credits arrived after years of negotiation and debate. While the impact of these changes will only be truly felt over the coming year, the market has reacted with optimism. Tenors for large-scale renewables projects have been pushed out to up to 22 years while most other projects can now go up to 15 years. The premium rate curve has also been adjusted for obligors with high credit risk ratings. These changes increase the affordability of the ECA product at a time of economic turmoil. However, questions remain: how will ECAs balance their portfolios as longer maturities become the norm? Should the Arrangement set a common position on support for fossil fuel projects? Can ECAs plug the funding gap as critical minerals make headlines? The phrase ‘critical mineral’ has now become standard parlance as countries look to secure the green energy transition with a steady supply of metal. However, the mining industry continues to suffer from a chronic lack of investment. ECA financing is increasingly available for projects that are deemed significant for national security. Over the course of 2023 ECAs supported several project financings including the Kathleen Valley lithium deal and the Hybar rebar steel mill facility. Expect to see this deal flow rise over 2024 if ECAs can make good on their expressions of interest. Talks are under way for three new mines led by Cerrado Gold, while BNP Paribas will lead the financing for Vulcan Energy’s zero-carbon lithium project.
Watch the TXF highlights of 2023 video!

https://www.txfnews.com/articles/7623/Export-finance-trends-of-2023-ECAs-spearhe...


Gunvor gets gas loan backed by SACE

(LNG Prime, Sarajevo, 15 December 2023) Geneva-based trader Gunvor has clos
ed a 400 million euro ($437 million) loan, backed by the Italy's SACE, to secure supplies of natural gas and LNG for Italian industry. The five-year term loan is guaranteed by SACE, the Italian export credit agency controlled by the country’s economy and finance ministry. Gunvor said in a statement that UniCredit acted as a global coordinator. The goal of the facility is to support Italian industry by securing natural gas and LNG supplies while promoting the export of Italy’s goods and services, the trader said.

https://lngprime.com/europe/gunvor-gets-loan-backed-by-italy/100075/


Ukraine strikes deal to get 2 Royal Navy minehunters from UK with UKEF support

(Politico, Brussels, 11 December 2023) Britain will hand over two Royal Navy minehunter ships to Ukraine as the war-torn country grapples with a continued blockage of the Black Sea by Russia. U.K. Defense Secretary Grant Shapps will on Monday announce Ukraine's armed forces have "procured" the Sandown Class vessels from Britain's Royal Navy, although the details of the transfer are still being arranged through U.K. Export Finance, London's export credit agency. The move is part of a new Maritime Capability Coalition, set up with Norway, to help bolster Ukraine's maritime training, equipment and infrastructure. Norwegian Defense Minister Bjørn Arild Gram will be in London on Monday to launch the initiative. The new coalition wants to help Ukraine transform its navy to make it "more compatible with Western allies, more interoperable with NATO, and bolstering security in the Black Sea," the Defense Ministry said.

https://www.politico.eu/article/ukraine-strikes-deal-to-get-two-royal-navy-mineh...


Italy’s export credit agency SACE unveils its ambitious ESG strategy at COP28

(Zawya, London, 1 December 2023) Italian export credit agency SACE unveiled a new ESG [environmental, social, and governance] strategy at COP 28, which will progressively align its business model with the United Nations Sustainable Development Goals (SDGs). The new strategy, unveiled at an offsite event during the COP28 summit in Dubai on Thursday, will integrate ESG criteria into decision-making processes and is underpinned by a scientific impact measurement system, the Agency said in a press statement. The Italian ECA is working on a €8.7 billion pipeline in the Gulf region for the Italian supply chain in strategic sectors such as renewables, infrastructure and construction, logistics, food and beverage, and energy. The Agency is also working on a €2 billion pipeline for Green Push transactions in the region.

https://www.zawya.com/en/projects/utilities/italys-export-credit-agency-sace-unv...


Pakistan’s Export-Import Bank formally launched

(Pakistan Today, Islamabad, 21 December 2023) Caretaker Minister for Finance, Revenue, and Economic Affairs, Dr Shamshad Akhtar, formally inaugurated Pakistan’s Export-Import Bank (EXIM) on Thursday. The move is aimed at strengthening external trade, attracting investments, and fostering broader economic growth in the country. The Caretaker Minister for Finance stated that institutions like EXIM have a global impact, noting that they disbursed a substantial $2.5 trillion in trade finance last year, benefiting exports across more than 60 countries. She stated that as EXIM Pakistan grows, it will play a crucial role in promoting trade finance through a well-structured institutional framework and effective policies. The finance minister stressed the need for streamlining export policy frameworks to contribute to the sustainability of the balance of payments, addressing historical challenges related to low levels of export earnings.

https://profit.pakistantoday.com.pk/2023/12/21/pakistans-export-import-bank-form...


Türk Eximbank expected to provide exporters $41 billion in 2023

(Daily Sabah, Istanbul, 19 December 2023) The funding that Türkiye’s state-owned financial institution providing banking services to exporters extended this year is expected to reach $41 billion (TL 1.19 trillion) by the end of 2023, its chairperson said Tuesday. Export Credit Bank of Türkiye (Türk Eximbank) has provided $38 billion from January through November, General Manager Ali Güney said, adding that they supported 16,800 exporters, with the small and medium-sized enterprises (SMEs) ratio reaching 84%. “In 2022, we supported a total of 15,440 exporters, of which 81% were SMEs, while in 2023, the number of supported exporters increased to 16,800, with an SME ratio of 84%,” Güney told Anadolu Agency (AA). In another Daily Sabah article of 29 December, it was noted that Türk Eximbank had become a shareholder in the Africa Finance Corporation (AFC), the continent’s leading infrastructure solutions provider. Türk Eximbank's first investment in an African entity makes it the first non-African sovereign shareholder in the AFC, it said in a statement.

https://www.dailysabah.com/business/economy/turk-eximbank-expected-to-provide-ex...


What's New for November 2023

"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?

Joint letter from 125 international CSOs to global leaders at COP28 calling for transformative public finance for a globally just energy transition

(ECA-Watch, 1 December 2023) As climate disasters intensify and as more people than ever are forced to choose between heating and eating, or transport and shelter, we called on the leaders of our governments and public finance institutions to work together at COP28 to end the fossil fuel era and build in its place a 100% renewable economy that works for everyone. There is no shortage of public money available to do this, it is just poorly distributed, flowing to fossil fuels and the super-rich instead of shared priorities. Some ECAs and insurers have dialled back their involvement in traditional energy sector projects in recent years, but renewable energy still only accounts for about 5% of total new longer-tenor commitments. Such support is less than the US$12bn provided to the natural resources industry – which includes the exploration and extraction of hydrocarbons – and the US$18bn supplied to traditional energy projects. This is because a handful of Global North governments and corporations hold outsized control over global monetary, trade, tax, and debt rules as well as our international financial institutions (IFIs). At COP28, public finance finds itself at a crossroads. IFIs and the Global North governments who largely control them must stop their over reliance on the private sector as the vehicle to fund climate solutions — an approach that has consistently under delivered and often caused great harm. We urgently need public finance policy, priorities, and governance to push instead towards a 1.5C-aligned just energy transition rooted in collective wellbeing and global and local equity. To do this, we will need to transform public finance institutions to be equitable, democratic, rights-upholding, feminist, sustainable, and transparent. We will also need to write new financial architecture rules that will ensure Global North governments and corporations pay their fair share for the crises we face, and also prioritize channeling finance for a just transition though institutions which are democratically accountable to Global South countries and peoples. We have enough money to have a full, fast, fair, and funded fossil fuel phase out and build a fair and 100% renewable economy in its place, what is lacking is political courage. For the sake of people and planet, COP28 must mark a turning point in your approach to public finance. Organizations wishing to add their support for this call may add their signatures to the letter after release through this link




Environmental groups urge funding halt for TotalEnergies' Mozambique project

(Times Live, Johannesberg, 17 November 2023) Banks and other financiers should withdraw their support of TotalEnergies' $20 billion liquefied natural gas (LNG) terminal in Mozambique, environmental lobby groups urged in a letter sent to more than two dozen project funders on Friday. The letter, seen by Reuters, comes at a crucial juncture for the French energy company as it prepares to relaunch Africa's largest foreign direct investment project. Activists warn the project may worsen climate change and fuel human rights abuses in the impoverished southern African nation. “As a critical financial supporter of the project, you bear a direct and important responsibility in its dreadful impacts,” the letter, supported by more than 100 organisations, including ActionAid International and Greenpeace France, said. Last month, lawmakers in the Netherlands said they would insist on being consulted on safety and human rights concerns before they can approve a 1 billion euro ($1.06 billion) loan guarantee for the project, stalled since April 2021. TotalEnergies said before Friday's letter that arrangements for project finance remain in place despite a 'force majeure' halt in 2021 when Islamist militants threatened the project site. Financing agreements for the project were struck in 2020 with direct and covered loans from eight export credit agencies, 19 commercial banks and the African Development Bank (AfDB).

https://www.timeslive.co.za/news/africa/2023-11-17-environmental-groups-urge-fun...


EU, UK, and Canada move to phase out fossil fuel finance at OECD

(Price of Oil, Washington, 8 November 2023) This week in Paris, some of the world’s wealthiest countries met at the Organisation for Economic Co-operation & Development (OECD) headquarters to discuss how Export Credit Agencies (ECAs) – the world’s largest public financiers for fossil fuels – can be aligned with climate goals. The UK, Canada and the EU put forward proposals to extend coal restrictions to oil and gas. The United States – a key influencer in the OECD process – did not take position on the proposal yet, despite President Biden’s multiple promises at the G7 and at the 2021 COP26 UN climate talks to end public finance for fossil fuels. Japan and South Korea, two of the world’s biggest financiers of international fossil fuel projects, also failed to come out in support of the proposal, despite both countries signing of the Paris climate agreement and Japan’s G7 commitment to end its international public finance for fossil fuels.

https://priceofoil.org/2023/11/08/eu-uk-and-canada-move-to-phase-out-fossil-fuel...


OECD oil and gas export credit fossil fuel ban postponed to next year

(Global Trade Review, London, 15 November 2023) A proposal to end export finance for oil and gas supported by the UK, EU and Canada will remain under discussion at next year’s OECD meetings after being tabled last week during negotiations in Paris. If agreed, the proposal would see a ban on export credits for new oil and gas projects, following the approach taken to prevent export credit agencies (ECAs) from financing unabated coal-fired power plants. The current proposal calls for a similar prohibition on oil and gas, a move that would bypass the transition stage seen in the approach to coal of an emission threshold coming before an overall ban. “The EU and UK position expands that coal-fired power prohibition to include all fossil fuels and all parts of the fossil fuel value chain, with some exceptions,” says Nina Pušić, OECD export finance climate strategist at Oil Change International (OCI), speaking to GTR from the negotiations. This could be a stumbling block in securing the agreement of the remaining eight countries in the Arrangement on Officially Supported Export Credits: Australia, Japan, Korea, New Zealand, Norway, Switzerland, Turkey and the US. According to OCI, Japan and Korea together provide on average more than US$16bn in oil and gas financing, based on 2018-2020 levels, while OECD ECAs provided an average of US$41bn per year in export support to fossil fuels between 2018 and 2020. The OECD is set to meet again in Q2 next year.

https://www.gtreview.com/news/sustainability/oecd-oil-and-gas-export-credit-ban-...


Where are the Cop26 finance pledges now?

(Climate Change News, Broadstairs UK, 3 November 2023) At Cop26 in Glasgow, hundreds of governments and private institutions joined forces in a series of pledges promising ambitious goals on methane reduction, forest protection and the shift of finance away from fossil fuels. End new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement. 34 countries and five development banks – predominantly from wealthy cuontries – signed up to the pledge at Cop26. These included the G7 nations – with the exception of Japan – and most EU member states. HOW IT IS GOING: Among the signatories that give lots of money to the energy sector, the vast majority have introduced policies in line with the promise made in Glasgow. The United Kingdom, France, Denmark, New Zealand, Canada, Finland and Sweden have stopped providing loans and guarantees for oil and gas extraction and processing overseas through their export credit agencies. Their actions have shifted at least $5.7 billion per year in public finance out of fossil fuels and into clean energy, according to analysis by Oil Change International and E3G. On the other hand, however, the USA, Italy and Germany have continued funding international fossil fuel projects in 2023 in breach of the pledge. They were supposed to stop funding foreign fossil fuels by December 2022. But since then, they collectively approved over $3 billion in financial support to oil and gas overseas programmes. Most of the funding comes in the form of state-backed guarantees provided by export credit agencies. These products limit the risk taken by companies selling services and goods in other countries, influencing investment.

https://www.climatechangenews.com/2023/11/03/forests-methane-finance-where-are-t...


Saudi Arabia Courts African Leaders to keep the world hooked on oil

(Foreign Policy, Washington, 15 November 2023) Riyadh hosted African leaders last Friday at the first Saudi-Africa summit on fostering trade ties. Among other measures, Saudi Crown Prince Mohammed bin Salman proposed $10 billion to finance and insure Saudi exports through 2030 and an additional $5 billion in development financing for African nations. A New York Times article on Saudi efforts notes that the kingdom is working to keep fossil fuels at the center of the world economy for decades to come by lobbying, funding research and using its diplomatic muscle to obstruct climate action. The Arab Africa Trade Bridges Program, a multi-donor, inter-regional program, has signed two agreements aimed at fostering sustainable growth and development on the sidelines of the Intra Africa Trade Fair 2023 in Cairo with support from the International Islamic Trade Finance Corporation. In addition,  Africa’s Global Bank, United Bank for Africa, UBA, Plc, and the Saudi Export-Import Bank, Saudi EXIM have entered into a partnership aimed at strengthening business growth and enhancing economic cooperation between their economies.

https://foreignpolicy.com/2023/11/15/saudi-arabia-africa-mbs-debt-investment-dev...


ExxonMobil and ECAs make moves on lithium

(Global Trade Review, London, 15 November 2023) Oil supermajor ExxonMobil has unveiled plans to become a “leading producer” of lithium ahead of an expected leap in demand for battery metals – but for pure commodity traders, big moves remain a more distant prospect. Export credit agencies (ECAs) are also upping involvement in lithium production. In August, ECAs from Australia, South Korea and the US revealed they were considering providing a US$195mn package of support for a lithium mine in the Australian outback, which is expected to produce 15,000 tonnes of lithium carbonate equivalent per year. A new report from Both ENDs and FARN explores the case of lithium mining in Argentina and provides recommendations for making a just transition to sustainable energy systems. It explores the extraction of these minerals which requires investments, and how export credit agencies (ECAs) are increasingly looking for ways to support businesses that do what they call "green projects" abroad, projects which are promoted under a market logic, but with rhetoric linked to the climate crisis and energy transition. This raises the question: should they? And, moreover, is mining for critical minerals a green investment? And are export credit agencies the right agent to help promote a just energy transition?

https://www.gtreview.com/news/global/exxonmobil-makes-big-move-on-lithium-but-co...


Banks urge OECD to resurrect 5% down-payment rule

(Global Trade Review, London, 22 November 2023) Export finance banks are urging members of the OECD Arrangement on Officially Supported Export Credits to reinstate the rule reducing the down-payment threshold for emerging market borrowers to 5% amid escalating debt risks. On November 4, a temporary common line which had allowed export credit agencies (ECAs) to cover up to 95% of the total export contract value on sovereign transactions – involving category II (non high income) nations – came to an end. The common line was first introduced in late 2021 to counter reported constraints in the private insurance market, and was renewed last November for a further 12 months. The temporary rule has now been formally wound down and any new ECA deals involving sovereign borrowers must revert to financing 15% of the contract on commercial terms. In another development, negotiators secured a modernisation of the OECD Arrangement on Officially Supported Export Credits in March which saw maximum repayment terms for export credit agency (ECA)-supported, climate-friendly projects extended to 22 years, while the maximum tenor for all projects was upped from 10 to 15 years. Revised repayment terms under the OECD framework on export credits could be challenging for banks, prompting increased demand for alternative means of funding, according to industry experts. It will be challenging for certain banks, especially in the current macroeconomic climate. All the banks are struggling with much higher funding costs compared to two or three years ago,” said Nazli Konac Edgu, director of export and agency finance at Citi.

https://www.gtreview.com/news/global/banks-urge-oecd-to-resurrect-down-payment-r...


Russian export credit claims soar

(Global Trade Review, London, 7 September 2023) The export credit insurance market saw claims jump by more than 700% in Russia last year, as the industry grappled with the fallout of the Ukraine crisis and western sanctions, Berne Union research shows. Short-term export credit claims involving obligors in Russia and the Commonwealth of Independent States (CIS) region increased by US$229mn from a year earlier, the union’s State of the Industry report for 2022 finds. Payouts in Europe also rose by US$118mn year-on-year as businesses felt the indirect impact of Russia’s full-scale invasion, which disrupted supply chains for critical inputs and drove up commodities prices. The data reveals how export credit agencies (ECAs) and trade credit insurers were stung by the Ukraine war, despite efforts to swiftly cut cover for Russian firms in the early weeks of the crisis due to financial and reputational risks. The analysis by the Berne Union, a global association representing ECAs and private insurers, shows new short-term export credit business in Russia and CIS fell from US$34bn to US$16bn – by more than 70% – as insurers pulled back. Arrears – or overdue payments by borrowers in the medium to long-term segment – rose by 11% or nearly US$8bn. On a brighter note for the industry, overall claims paid out by ECAs and insurers on their policies fell to US$7.7bn – a decline of about US$1bn – following a 33% drop in claims in the transportation sector, the data shows.

https://www.gtreview.com/news/global/russia-export-credit-claims-soar-as-market-...


EDC uses environmental review directives on less than 1% of transactions

 (Globe & Mail, Toronto, 3 November 2023) Canada’s export financing agency applies its own flagship environmental and social review process in less than 1% of the transactions it supports, the Auditor-General of Canada’s office has found. An audit report released to Parliament Thursday determined that of nearly 7,800 loans EDC supported between May, 2019, and March, 2023, just 33 (or 0.4%) were reviewed under EDC’s Environmental and Social Review Directive. The report recommended that EDC apply the directive more broadly and warned that when it does not, it’s at elevated risk of financing projects that increase greenhouse gas emissions, harm biodiversity and violate human rights, and operating at cross-purposes to the federal government’s own commitments.

https://www.theglobeandmail.com/business/article-edc-uses-environmental-review-d...


Spillover effects of the Ukraine crisis: political risk insurance in times of brinkmanship

(Berne Union, London, 7 September 2023) A Berne Union report investigates how political risk insurance can be approached amid the ongoing effects of the pandemic, geopolitics and the evolving Russia/Ukraine crisis. The search for new, diversified suppliers of strategic materials to support the energy and technological transition may result in fresh investment flows for countries with both limited stability and little capacity in order to handle the amount of investment and operations required. Apart from China and Russia, several of the sovereigns that are likely to emerge as incremental suppliers were rated B or lower, even before the current crisis, and/or possess a country risk category that could make the cost of financing excessive or further complicate their fiscal position in the short- to medium-term.

https://www.berneunion.org/Articles/Details/664/Spillover-effects-of-the-Ukraine...


World's largest car theft and the Swedish ECA

(The Times of India, Delhi, 9 November 2023) According to the Swedish Export Credit Agency, the interest and unpaid penalties on 1,000 Volvo cars, have racked up a breathtaking USD 322 million still owed. The 1974 order for the batch of 1000 Volvo 144 sedans to be used as taxis was given by Kim Jong Un’s grandfather, Kim Il Sung. Later, the Swedish government paid Volvo in full from public funds but is still waiting to retrieve the money from North Korea. The batch of vehicles, a significant component of a 1974 agreement, is now at the centre of what is considered to be the 'biggest car heist' in history.

https://timesofindia.indiatimes.com/auto/news/worlds-largest-car-theft-was-done-...


Offshore wind firm secures £370 million government-backing to expand UK business

(Insider, Glascow, 16 November 2023) UK Export Finance (UKEF) has issued a loan guarantee so that Seaway7 can access a £370m funding package under its Export Development Guarantee so that the offshore wind company can invest in its UK operations. The guarantee covers 80% of the total loan, which has been coordinated by HSBC, with Citibank, Credit Agricole Corporate and Investment Bank, DNB and ING as mandated lead arrangers. UKEF’s backing is expected to help the firm win and service engineering, procurement construction and installation contracts for fixed offshore wind projects which will generate UK export revenue. Zero offshore wind projects were secured by the UK Government in the country’s latest clean power auction early today - dealing “a major blow” to Scotland and the UK’s renewable energy ambitions.

https://www.insider.co.uk/news/offshore-wind-firm-secures-370-31451259


Small nuclear reactor, funded by JBIC, is cancelled

(Friends of the Earth Japan, 13 November 2023) NuScale Power, a U.S.-based company, has announced the cancellation of its plan to build a small nuclear reactor in Idaho, U.S. The Japan Bank for International Cooperation (JBIC), had invested in NuScale in April last year, together with JGC Holdings Corp. and IHI Corporation. JBIC’s investment in NuScale was $110 million. At the time of JBIC’s investment, we pointed out that even under their new guise of “small modular reactors,” SMRs are no different from conventional nuclear power plants in that they have problems such as radioactive contamination over their life cycle, nuclear waste, accident risk, and the risk of becoming targets of terrorism and war. We also pointed out that SMRs, which are touted for their economic efficiency, actually increase the cost per unit of electricity generated, and argued that investors should not invest in high-risk SMRs.

https://foejapan.org/en/issue/20231113/14877/


Rethinking Technology Transfer to Support the Climate Agenda

(SDG/IISD, Winnipeg, 8 November 2023) 2022 was a milestone in global power energy markets. For the first time, total investment in renewable power generation and related products matched or slightly exceeded investment in fossil fuel production. By some estimates, global investment in clean energy could reach USD 1.7 trillion in 2023, led by solar, wind, and electric vehicles (EVs). But the projected growth in low-carbon technologies remains concentrated in a handful of countries or regions – mainly those with the size and fiscal space to promote the green industrial policies that are re-shaping global trade in low-carbon technologies. Overall investment in renewable energy in the majority of emerging market and developing economies (EMDEs) remains low. We need to ensure trade finance plays a bigger role in renewable energy trade. Although estimates vary, roughly 85 national export credit agencies (ECAs) together provide over USD 200 billion, most by offering export credit guarantees, insurance, hedging, and other instruments that together leverage as much as USD 1.5 trillion. The OECD Common Approaches, first adopted a decade ago and revised in 2021, are now lagging behind widening targets and practices, and need to be updated to align with the Paris Agreement.

https://sdg.iisd.org/commentary/guest-articles/rethinking-technology-transfer-to...


Trade credit insurance reaches just 13% of insured shipments

Global Trade Review, London, 22 November 2023) Premiums for trade credit insurance hit US$13.9bn in 2022, a small proportion [0.19%] of the US$7tn in insured shipments where trade credit insurance could have been used, the International Credit Insurance and Surety Association (ICISA) says. Only 13.2% of covered shipments worldwide were protected by trade credit insurance, with the private sector providing more than two-thirds of the cover [vs one-third from official OECD ECAs which supposedly monitor the environmental and ethical elements of international trade?], ICISA says. It estimates world trade to have totalled US$100.6tn last year. In a report released last month, global reinsurer Swiss Re says it expects trade credit insurance premiums to grow to US$14.8bn in 2024 [i.e. .015% of the value of goods traded] despite a slowdown in global trade, which it puts down to rate increases.

https://www.gtreview.com/news/global/trade-credit-insurance-reaches-just-13-of-i...


What's New for October 2023

"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.

  • Fossil Free Export Credit Agencies – a new web resource
  • Alignment of US EXIM with US climate and development policy objectives
  • EXIM Board Unanimously Approves Financing for 3 projects in Romania Kazakhstan and Iraq
  • Israel-Hamas conflict: Indian exporters may face higher risk premiums shipping costs
  • EU and UK seek ban on ECA subsidies for foreign fossil fuel projects
  • ECAs and Reconstruction in Ukraine
  • UKEF Announces Financial Support for Ukraine’s Nuclear Fuel Supply
  • CPChem QatarEnergy finalize financing on $6 bn Ras Laffan Qatar petrochemicals project
  • Afreximbank signs US$300mn deal to support Congolese crude oil production
  • Uganda crude pipeline nears Sinosure $3bn funding deal
  • Hai Long team confirms €3bn Taiwan wind financing deal
  • India's Reliance Jio Secures $2 Bn In Largest FY24 Offshore Loan with Finnvera backing
  • SACE Meets India: Facilitating $1.6 Billion for Green Transitions
  • Germany offers cheaper export credit support in new climate policy
  • ECAs and the airline industry’s financial landscape
  • Afri-Exim  ICRC approve $1.2bn for moribund Burutu port
  • Egypt in talks to secure $2.1 bln loan for 2nd high-speed rail line
  • London Hosts West and Central Africa Trade Forum
  • Citigroup: The future of export agency finance
  • Over 250 organizations support OECD end to $41 billion annual fossil fuel finance

Fossil Free Export Credit Agencies – a new web resource

The climate crisis can't be solved if export credit agencies continue to support fossil fuels. We, a group of concerned civil society organizations, call on governments to immediately end all export credit and other public support for fossil fuels.

https://www.fossilfreeecas.org/


Alignment of US EXIM with US climate and development policy objectives

(Oxfam America, Boston, 16 October 2023) This 51 page study assesses the alignment of the United States Export-Import Bank (EXIM) — the official export credit agency (ECA) of the US — with the country’s climate and development policy objectives derived from relevant Executive Orders (EOs), acts, guidance, and strategic policy documents. Export credit agencies (ECAs) like the Export-Import Bank of the United States (EXIM) are government-backed private or public agencies with a mandate to promote national exports through loans, guarantees, and insurance to domestic companies or foreign buyers. EXIM exerts great leverage by reducing the risk of private investments and, consequently, supports the expansion of specific industry sectors such as aircraft, manufacturing, and oil and gas. In developing countries, ECAs often finance large-scale energy infrastructure projects with significant lifetimes that disproportionately benefit carbon-intensive industries, increasing greenhouse gas (GHG) emissions (OECD n.d.). In fact, ECAs are the largest category of public finance institutions (PFIs) supporting fossil fuel investments. Between 2019 and 2021, G20 ECAs facilitated transactions amounting to $34 billion per year for fossil fuels, over 90 percent of which were for oil and gas. The share of clean energy transactions in ECA portfolios was considerably lower, with only $4.7 billion per year over the same period.

https://webassets.oxfamamerica.org/media/documents/US_EXIM_report.pdf


EXIM Board Unanimously Approves Financing for 3 projects in Romania, Kazakhstan and Iraq

(EXIM, Washington, 22 September 2023) The Board of Directors of EXIM has approved 3 transactions in the energy and transportation sectors. The first transaction a direct loan for more than $57 million to EnergoNuclear S.A. to support pre-construction engineering and feasibility studies for the potential development of two nuclear reactors at the Cernavodă nuclear power plant complex in Romania. The transaction, issued under EXIM’s Engineering Multiplier Program, will support an estimated 200 new jobs in Texas and Illinois. The EXIM Board also approved a $594 million loan guarantee to the national railway of Kazakhstan, KTZ, to support the export of Wabtec locomotive and locomotive shunter kits to KTZ. The transaction will support an estimated 1,500 U.S. jobs. The final transaction approved by the Board was a $240 million guarantee of a loan to the Ministry of Electricity of the Republic of Iraq to finance the export of GE Energy products to support the repair and upgrade of operating gas turbines in ten locations in Iraq. The transaction is estimated to support approximately 500 U.S. jobs across California, Connecticut, Illinois, Ohio, Oregon, Massachusetts, and Nevada. [An aside re Iraq: A recent Brown University study found that the 2003-2011 Iraq war cost the US $2.9 trillion, over 500,000 lives, created 7 million refugees, nearly 8 million displaced persons and a legacy of ISIS like terrorism throughout the world. Pentagon spending since 2001 has totaled over $14 trillion, one-third to one-half of which went to defense contractors.]

https://www.exim.gov/news/export-import-bank-united-states-board-directors-unani...


Israel-Hamas conflict: Indian exporters may face higher risk premiums, shipping costs

(Devdiscours, New Deli, 8 October 2023) Indian exporters shipping goods to Israel may face higher insurance premiums and shipping costs due to the Israel-Hamas conflict, according to experts. For merchandise exports of India, the war may lead to higher insurance premiums and shipping costs. Indian ECA ECGC may charge higher risk premiums from Indian firms exporting to Israel, think tank Global Trade Research Initiative (GTRI) said on Sunday. ECGC Ltd (formerly Export Credit Guarantee Corporation of India Ltd) is wholly owned by the government of India. Mumbai-based exporter and founder chairman of Technocraft Industries India Sharad Kumar Saraf said the conflict may have an impact on Indian exporters in the short run. ''But if the war escalates, things may get bitter for our exporters of that region,'' Saraf said.

https://www.devdiscourse.com/article/headlines/2622608-israel-hamas-conflict-ind...


EU and UK seek ban on ECA subsidies for foreign fossil fuel projects

(Financial Times, Brussels, 29 October 2023) The UK and EU will push the world’s richest countries to end subsidies for foreign oil and gas operations and coal mining at a closed-door OECD meeting next month, according to people familiar with the matter. The proposal to cut off the biggest foreign source of public finance for fossil fuels is expected to spark heated negotiations at the OECD’s Paris headquarters. The move builds on a commitment by some OECD countries to align public finance institutions with Paris agreement goals to limit global warming to well below 2C and ideally 1.5C above preindustrial levels. But the effort to end subsidies for foreign projects will draw attention to the prevalence of domestic subsidies for oil and gas industries, even as a global deal to end fossil fuel production without the emissions captured at the upcoming UN COP28 climate summit looks increasingly unlikely. Ending export credit agencies’ provision of loans and guarantees for fossil fuel projects would be “an essential first step to keeping our international climate goals within reach”, said Nina Pušić, an export finance climate strategist at the US environment campaign group Oil Change International.

https://www.ft.com/content/b4d0e4be-aa81-4345-a004-b76cafc5129e


ECAs and Reconstruction in Ukraine

(Ukraine Recovery, London, 22 June 2023) The Ukraine Recovery Conference 2023 was co-chaired by the UK and Ukraine in London on 21-22 June 2023. The conference was a continuation of the cycle of annual events, with URC 2022 conducted jointly with Switzerland in Lugano. The conference focussed on mobilising international support for Ukraine's economic and social stabilisation and recovery from the effects of war, including through emergency assistance for immediate needs and financing private sector participation in the reconstruction process. URC 2023 showcased the strength and potential of the private sector in supporting Ukraine to “build back better”, working alongside a broad coalition of governments, international organisations and civil society. URC 2023 brought together Leaders, Ministers, and representatives of 59 states, 32 international organisations and international financial institutions, over 500 businesses, and 130 civil society organisations. Press articles this month (October) highlight Swedish, French, Dutch and Canadian support for aid to Ukraine: The Swedish government proposes to allocate SEK 333 million (about $30 million at the current exchange rate) for special export credit guarantees for companies trading with Ukraine; The French state-owned insurance company Bpifrance Assurance Export will insure French companies ready to invest in Ukraine and its recovery without waiting for the war to end; The Netherlands is allocating EUR 102 million for the third support package of assistance to Ukraine in 2023; Export Development Canada, without announcing specific funding has noted that it continues to closely monitor the situation in Ukraine, engage with Canadian exporters and qualified investors interested in the market and provide support through its suite of products.

https://www.urc-international.com/


UKEF Announces Financial Support for Ukraine’s Nuclear Fuel Supply

(Anyuak Media, Warsaw, 12 October 2023) UK Energy Secretary Grant Shapps has made a visit to Ukraine to announce fresh financial support aimed at reducing the country’s reliance on Russia for its nuclear fuel supply. The UK will provide a £192m loan guarantee to Ukraine’s national nuclear company, Energoatom, through the UK’s export credit agency, UK Export Finance. As part of the agreement, UK-headquartered Urenco will supply Energoatom with vital uranium enrichment services necessary for nuclear fuel. Currently, nuclear power accounts for more than half of Ukraine’s electricity generation

https://anyuakmedia.com/uk-to-provide-192m-loan-guarantee-to-boost-ukraine-nucle...


CPChem, QatarEnergy finalize financing on $6 bn Ras Laffan, Qatar, petrochemicals project

(Business Wire, San Francisco, 9 October 2023) Ras Laffan Petrochemicals, a joint venture company owned 30% by Chevron Phillips Chemical and 70% by QatarEnergy, today announced that it has secured $4.4 billion to finance an integrated polymers facility to be located in Ras Laffan Industrial City, Qatar. The project financing comprises commercial and Islamic lenders and a group of export credit agencies. Finalizing the financing is a key milestone in the development of the 435-acre petrochemical project, which will include the largest ethane cracker in the Middle East and one of the largest in the world. The two companies also are constructing a joint venture integrated polymers facility on the Texas Gulf Coast, which is expected to be operational in 2026.  [No information is available on which ECAs are involved.]

https://www.businesswire.com/news/home/20231009250255/en/CPChem-QatarEnergy-fina...


Afreximbank signs US$300mn deal to support Congolese crude oil production

(Global Trade Review, London, 4 October 2023) The African Export-Import Bank has agreed a US$300mn facility with Trident OGX Congo to bump up crude oil production in the Republic of the Congo. Other export credit agencies (ECAs) around the world have come under fire for continuing to finance the oil industry, most prominently the ECAs of western countries whose governments signed up to end international fossil fuel financing for new oil and gas projects. But some claim that global efforts to drastically scale back oil and gas production disadvantages African nations that have not yet reaped the economic benefits of fossil fuels, a tension borne out in the struggle over financing the East African crude oil pipeline. While western economies have had years to prepare for ESG requirements, Gwen Mwaba, director and global head of trade finance at Afreximbank, said that there was now “an expectation for Africa to fall in line immediately, when the reality is that we also need time to find our way on this journey. We should be given that space given how little we contribute to carbon emissions as a continent compared to the western world,” she said.

https://www.gtreview.com/news/africa/afreximbank-signs-us300mn-deal-to-support-c...


Uganda crude pipeline nears Sinosure $3bn funding deal

(Argus Media, Cape Town, 3 October 2023) Chinese export credit agency Sinosure is slated to complete talks with Uganda and oil companies TotalEnergies and CNOOC this month to provide $3bn for the country's crude export pipeline EACOP, after western financiers pulled out due to environmental concerns, Petroleum Authority of Uganda director Ernest Rubondo said today.

 

https://www.argusmedia.com/en//news/2495169-uganda-crude-pipeline-nears-chinese-...


Hai Long team confirms €3bn Taiwan wind financing deal

(ReNews, Winchester UK, 17 October 2023) Northland Power and its partners have met all conditions and completed the NT$117bn (€3bn) financing for the 1 GW Hai Long offshore wind project off Taiwan. The financing will be provided by 16 international and local banks, including China Trust, Taipei Fubon Bank, Taiwan Life, Fubon Life, HSBC, Crédit Agricole Bank, Auspreci Bank, Sumitomo Mitsui Banking Corporation, Mizuho Bank MUFG Bank and Deutsche Bank. A high proportion of the funds in this joint loan case will be provided by local financial institutions. At the same time, Hai Long has obtained the highest credit guarantee ratio from Taiwan's history, provided by seven export credit agencies, including Export Development Canada (EDC), Japan Bank for International Cooperation (JBIC), Japan Trade Insurance (NEXI) and UK Export Finance Agency.

https://renews.biz/88858/hailong-clinches-3bn-in-financing/


India's Reliance Jio Secures $2 Bn In Largest FY24 Offshore Loan with Finnvera backing

(Business World, Delhi, 3 October 2023) Reliance Jio, Indian telecom giant, has successfully raised nearly USD 2 billion (approximately Rs 16,640 crore), marking India's largest offshore loan in FY24, as reported by a media house. HSBC played a leading role in arranging this initiative, which is intended to finance the recent purchases of 5G network equipment from Nokia, a Finnish technology company. The report also reveals that Finnish export credit agency Finnvera has provided a similar insurance cover to safeguard Nokia, the supplier of Jio's 5G equipment and the global lenders associated with the telecommunications company. The inclusion of Finnvera insurance is expected to reduce Jio's overall funding costs for its 5G equipment. Such arrangements offer greater reassurance to global lenders and major 5G network suppliers involved in substantial deals.

https://www.businessworld.in/article/Reliance-Jio-Secures-2-Bn-In-Largest-FY24-O...


SACE Meets India: Facilitating $1.6 Billion for Green Transitions

(Livemint, Mumbai, 17 October 2023) Italy’s Export Credit Agency, SACE, brought together a hundred leaders in Mumbai to explore trade and industrial synergies. SACE is currently evaluating $1.6 billion of new projects to facilitate the green transition in India. These projects are expected to promote and grow trade and industrial synergies between Italy and India in a diversified range of sectors including green technologies & renewable energy, infrastructure, automotive, and steel amongst others. In this scenario, SACE brought together a hundred leaders from the Indian and Italian business and finance communities in Mumbai for its event, “Italy meets India - A Push towards a Sustainable Future", to explore new potential business opportunities between Italy and India. SACE has an overall transaction portfolio of $173 billion and a presence in India through its office in Mumbai since 2012,

https://www.livemint.com/brand-stories/sace-meets-india-facilitating-1-6-billion...


Germany offers cheaper export credit support in new climate policy

(Global Trade Review, London, 25 October 2023) Germany has become the latest country to offer more attractive export credit guarantee pricing and conditions for climate-friendly transactions. In a policy scheduled to take effect from November 1, applicants for export credit support from the energy, transport and heavy industry sectors will be graded based on the alignment of their transactions to the Paris Agreement target of keeping global warming under 1.5 degrees Celsius. Export credit guarantees, investment guarantees and untied loans will be cheaper for transactions that support the 1.5 degrees goal. The down payment on local costs will also be waived, government coverage will be boosted from 95% to 98%, and German content will only need to form 30% of the overall transaction. Additionally, a surcharge on local currencies will be removed, meaning the premium paid will remain the same regardless of the currency used. Current pricing and terms will apply to transactions classified as compliant with the global warming limitation target. Those that are not aligned will be refused cover. Overall, the policy aims to make German export credit cover with developed countries climate-neutral by 2045 and with developing countries by 2050. Euler Hermes administers the export credit policy, overseen by Berlin’s climate and economy ministry.

https://www.gtreview.com/news/europe/germany-offers-cheaper-export-credit-suppor...


ECAs and the airline industry’s financial landscape

(IATA, London, 26 October 2023) Airline finances were a major focus at the World Financial and World Passenger Symposiums. Airlines generally raised more money than they needed during the pandemic and so have good liquidity on the whole, but it is estimated that the industry will need to invest about $5 trillion or some $175 billion per year to achieve its goal of net zero carbon emissions by 2050. Yet the 2023 profit for airlines will be just $10 billion and that is following three years of heavy losses. Clearly, aviation will need to access finance to support its sustainability initiatives. Increasing demand and sustainability mean that money is being spent and airlines are reluctant to raise more capital at the moment because of the high interest rates. Airlines will therefore soon start to access finance again. It is expected that in the United States bond issuing markets will be the most active element. In China and Asia-Pacific, local banks will, as usual, be the main sources for financing while other areas will look more at sale and leaseback as well as export credit agencies.

https://airlines.iata.org/2023/10/26/navigating-industrys-financial-landscape


Afri-Exim, ICRC approve $1.2bn for moribund Burutu port

(Vanguard, Lagos, 4 October 2023) THE African Import Export Bank, Afri-Exim Bank, in collaboration with the Infrastructural Concession Regulatory Commission, ICRC, have approved a $1.2 billion loan facility to rehabilitate the moribund Burutu Port in Burutu, Delta State, Nigeria. An official of Afri-Exim Bank,  Mr. Hope Nyongo, disclosed that the Business Case for Burutu Port has been prepared by the ICRC and encouraged investors with similar projects to take advantage of Joint Project Preparation Facility to develop such facilities. He stated: “Because of the typical nature of the maritime and the lack of internal capacity, we have a facility called the Joint Project Preparation Facility initiated by Afri-Exim for port related development in Africa.

https://www.vanguardngr.com/2023/10/afri-exim-icrc-approve-1-2bn-for-moribund-bu...


Egypt in talks to secure $2.1 bln loan for 2nd high-speed rail line

(Zawya, Dubai, 11 October 2023) The Egyptian government is currently negotiating with several international financing institutions to secure a $2.1 billion concessional loan for the implementation of the second high-speed rail line, two government officials told Asharq Business. The potential lenders include, the Italian Export Credit Agency and the German state-owned KfW Bank, one source noted. On a related note, five international firms are competing for a deal on supplying 21 trains for the first phase of Alexandria metro project at an estimated cost of up to $400 million, the sources said. The companies are the French Alstom, South Korea’s Hyundai, Spanish CAF, China’s CRRC, and Russian-based Transmashholding.

https://www.zawya.com/en/economy/north-africa/egypt-in-talks-to-secure-21bln-loa...


London Hosts West and Central Africa Trade Forum

(Mirage News, London, 17 October 2023) Delegations from seven African nations joined leading UK companies and investors to advance partnerships that promote economic growth and jobs. Organised by UK Export Finance (UKEF) - the UK's export credit agency - and DMA Invest, the Forum brings together prominent representatives from Benin, Cameroon, Cote d'Ivoire, the Democratic Republic of Congo, Guinea, Senegal and Togo to discuss new trade and investment opportunities with their UK counterparts that will benefit British businesses. It forms part of the Prime Minister's priority to grow the economy.

https://www.miragenews.com/london-hosts-west-and-central-africa-trade-forum-1105...


Citigroup: The future of export agency finance

(Global Trade Review, London, 24 October 2023) [In an article sponsored by CITI, GTR has published an overview of export finance by Richard Hodder, head of export agency finance at CITI.] "In today’s world of escalating environmental concerns and shifting global economic priorities, export credit agencies have the potential to play a pivotal role in advancing the transition to cleaner energy sources and sustainable development... “In terms of the energy transition, the sheer volume of financing that will be required to drive it, as well as the large size of individual projects, will necessitate a diversity of funding sources – and ECA support will be key,” says Hodder. “Looking at the enquiries across our network, we expect ECA demand to grow and remain at sustained high levels over the next decade.” [Citigroup Inc. hired HSBC Holdings Plc’s Richard Hodder in June 2023 to lead its export agency finance business as the Wall Street giant seeks to expand its trade operations.]

https://www.gtreview.com/magazine/the-export-finance-issue-2023/the-future-of-ex...


Over 250 organizations back groundbreaking efforts by OECD countries to end $41 billion a year in fossil fuel finance

(Price of Oil, Washington, 30 October 2023) As Organisation for Economic Co-operation and Development (OECD) delegates prepare to meet in Paris from November 6-10, over 250 civil society organizations (CSOs) from 30 countries published an open letter calling on negotiators to support an end to OECD export finance for fossil fuels. Signatories include Amnesty International, Greenpeace International, and Friends of the Earth International. The Financial Times (FT) has revealed that the UK and the EU will put forward proposals for doing so, with Canada planning to back the UK’s proposal. These efforts can end the USD 41 billion per year flowing to fossil fuel projects from government-run OECD export credit agencies (ECAs). The OECD Arrangement on Officially Supported Export Credits sets rules that all OECD country ECAs must follow.

https://priceofoil.org/2023/10/30/over-250-organizations-back-groundbreaking-eff...


What's New for September 2023

"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.

  • Rich country ECAs sink billions into oil and gas despite Cop26 pledge
  • ECA Market Booming Worldwide
  • Export Finance for Future (E3F) and accountability
  • Trade Credit Insurance Market Report by Development Factors 2031
  • UK, Japanese and Italian ECAs support projects in Africa
  • Uganda in talks with Chinese ECA for pipeline funds after Western banks cave in
  • FSD Africa Investments Pledges $19.5 Million to Fortify Africa’s Climate Resilience
  • UAE pledges $4.5bn for Africa clean energy projects
  • USEXIM to Invest $5 Billion in Space Industry
  • Ukraine’s ECA-backed exports hit record high
  • US Exim approves first domestic manufacturing deal
  • Could ECAs finance cleaner steel & industrial hubs?
  • Hungary Exim wins World Bank support for ING loan
  • Canada restricts subsidies, but delays plan to end billions more in ECA fossil fuel finance

Rich country ECAs sink billions into oil and gas despite Cop26 pledge

(Climate Change News, Broadstairs UK, 7 September 2023) The US, Germany and Italy have been accused of backsliding on a Glasgow promise to end public subsidies to fossil fuel projects overseas. They are among rich countries providing billions of dollars of public subsidies to fossil fuel projects abroad this year despite promises to end this support. Export credit and development agencies from six developed nations have approved $4.4 billion in funding for oil and gas projects overseas since the start of 2023, research from campaigning group Oil Change International shows. More than half of the total financing has been provided by the United States ($1.5 billion) and Italy ($1.2 billion), followed by Germany, Japan, the Netherlands and Switzerland. Common Dreams notes that: "The U.S., Italy, and Germany are going rogue by backtracking on their commitment to end international public finance for fossil fuels," said one analyst. "There needs to be accountability."

https://www.climatechangenews.com/2023/09/07/rich-countries-sink-billions-into-o...


ECA Market Booming Worldwide

(openPR, 7 September 2023) The latest study published by HTF MI Research on the "Import Export Insurance Market'' evaluates market size, trend and forecast to 2029. Some of the Major Companies covered in this Research are Atradius (Netherlands), Euler Hermes/Allianz Trade (France), Coface (France), Zurich Insurance Group (Switzerland), Chubb Limited (Switzerland), Allianz SE (Germany), Liberty Mutual Insurance (United States), Tokio Marine Holdings (Japan), AXA XL (France), QBE Insurance Group (Australia), Sompo Holdings (Japan), AIG (American International Group) (United States). According to HTF Market Intelligence, the Global Import Export Insurance market [is] to witness a CAGR (compound annual growth rate) of 8.4%, an increase by USD 7.94 Bn, during the forecast period of 2023-2028. Global Import Export Insurance Market Breakdown by Application (Manufacturing, Agriculture, Energy, Retail, Others) by Type (Export Credit Insurance, Marine Insurance, Political Risk Insurance, International Product Liability, Others) by Organization Size (Large Enterprise, Small and Medium Enterprise (SMEs)) and by Geography (North America, South America, Europe, Asia Pacific, MEA).

https://www.openpr.com/news/3200455/import-export-insurance-market-is-booming-wo...


Export Finance for Future (E3F) and accountability

(LinkedIn, Sunnyvale CA, Unknown date) An international coalition working to harness public export finance as a key driver in the fight against climate change. [ECA Watch note: Unfortunately E3F uses the LinkedIN professional network which relies on professional contacts, does not display dates for postings, and uses a format which is much less public than web page or Facebook networks, thus much less open to public information sharing and accountability.] E3F was launched by 7 European countries at ministerial level in April 2021 to align public export finance with climate goals. More specifically, the coalition aims to increase support for sustainable and climate-friendly projects and accelerate the progressive phasing out of fossil fuel related projects. With this, the coalition members, currently composed of the governments of Belgium, Denmark, Finland, France, Germany, Italy, the Netherlands, Spain, Sweden and the United Kingdom, reaffirm their commitment to contribute to the climate goals of the Paris Agreement and to promote consistent international standards and pursue ambitious multilateral action. All current members are also signatories to the COP26 statement on international public support for the clean energy transition. From the E3F LinkedIn page: "Denmark is pleased to announce that Denmark will take over the chairpersonship of the Export Finance for Future (E3F) Coalition for the coming year. The coalition warmly thanks Germany for their efforts and for successfully steering E3F through the last year, maintaining our commitments and ambition through the energy crisis. There is a solid foundation for moving E3F further, and Denmark looks forward to taking up the mantle. The focus for the coming year will be on ensuring the continued credibility and increasing the visibility of the coalition, fostering dialogue with non-members and stakeholders, deepening the coalition and strengthening the coherence with other government initiatives." German NGO World Economy, Ecology & Development (WEED) has urged Denmark within E3F to "push all members to adopt ambitious local stratgies to end export finance for fossil fuels! - where Germany failed during their chairpersonship!"

https://www.linkedin.com/company/export-finance-for-future-e3f/


Trade Credit Insurance Market Report by Development Factors 2031

(Benzinga, Detroit, 11 September 2023) The Trade Credit Insurance Market Insights of 2023 is an extensive and comprehensive report that provides a complete analysis of the market's size, shares, revenues, various segments, drivers, trends, growth, and development. The Trade Credit Insurance market is expected to grow annually by (CAGR 2023 - 2031). The Trade Credit Insurance market report is a striking 131 pages that includes a comprehensive table of contents, a list of figures, tables, and charts, as well as extensive analysis. This report offers valuable insights to industry stakeholders and vendors. The report highlights company profiles, financial metrics, market demands, technological innovations, and regional developments. [A single user license costs US$4000.]

https://www.benzinga.com/pressreleases/23/09/34464120/trade-credit-insurance-mar...


UK, Japanese and Italian ECAs support projects in Africa

Zawya, Dubai, 7 September 2023) The UK and Japanese export credit agencies (ECAs) have signed a memorandum of understanding (MoU) to support their future collaboration on sustainable projects worldwide, especially in Africa. The terms of the agreement will guide the UK Export Finance (UKEF) and Nippon Export and Investment Insurance (NEXI) to collaborate on projects around the world – especially in Africa and the Indo-Pacific – which draw on UK and Japanese supply chains, the UKEF said in a statement. With a focus on export credit policy and co-investment projects, the partnership between the two ECAs will support the international competitiveness of UK and Japanese businesses as they seek to access global trading opportunities, the statement added. In other news, The director of Mozambique NGO Justiça Ambiental has charged that "rich countries are addicted to fossil fuels" and emphasized the importance of fighting against oil and gas projects, noting that "If there isn't a strong backlash, the rest of the world will follow soon and then there will be no chance for vulnerable countries like Mozambique to deal with the ravages of the climate crisis... Instead of supporting Mozambique to develop clean and just energy sources, these countries are pushing Mozambique down a fossil fuel development pathway." The director took aim at Italian export credit finance agency SACE for its involvement in "the gas rush in northern Mozambique, which has led to human rights abuses, devastated lives, increased conflict and militarization, and oppression of communities, journalists, and civil society."

https://www.zawya.com/en/projects/utilities/uk-and-japanese-export-credit-agenci...


Uganda in talks with Chinese ECA for pipeline funds after Western banks cave in

(Reuters, Kampala, 25 September 2023) Uganda is in advanced talks with Chinese export credit agency SINOSURE to provide credit for its crude oil pipeline after pressure from environmentalists forced some Western banks to recoil from the project, a top official said on Monday. The 1,445-kilometre (898-mile) East African Crude Oil Pipeline (EACOP) is planned to help Uganda export its crude from oilfields in the country's west via a port on Tanzania's Indian Ocean coast. It is co-owned by the government of Uganda, France's TotalEnergies (TTEF.PA), China's CNOOC (0883.HK) and Tanzania's Tanzania Petroleum Development Corporation (TPDC). The project will cost $5 billion, including the cost of credit and 40% of the money will be raised through debt while the rest will come from equity. Activists contend that the project violates the Equator Principles, a set of standards adopted by these specific lenders for assessing, determining, and managing social and environmental risk for project finance. In addition to Kampala, London, Paris, and New York, the Eacop demonstrations also took place in 18 other cities, including Tokyo, Johannesburg, Frankfurt, Brussels, Sendai, Hoima, Nagoya, Toronto, Fukuoka, Goma, Cape Town, Amsterdam, Copenhagen, and Vancouver.

https://www.reuters.com/markets/commodities/uganda-talks-with-chinese-credit-age...


FSD Africa Investments Pledges $19.5 Million to Fortify Africa’s Climate Resilience

(Techinafrica, South Africa, 8? September 2023) [A somewhat confused article apparently about an investment in un-named Latin American ride sharing services by an African investment fund backed by un-named ECAs.] "To enhance mobility and environmental sustainability in Latin America, FSD Africa Investments (FSDAi) [a UK International Development funded regional programme operating in more than 30 countries from its Kenya base] has forged a significant alliance with the [South African] ride-hailing service [app] InDrive." [An Uber cum taxi competitor now operating in 6 other African countries]. FSDAi’s investments in Acre Impact Capital’s Export Finance Fund I, the Catalyst Fund, and Camco’s Spark Energy Services underscore the institution’s commitment to collaborating with local investment managers and venture capitalists. The goal is to champion environmentally-conscious enterprises that might otherwise face challenges securing the necessary capital. [Support for privately owned automobile services is environmentally conscious?]

https://www.techinafrica.com/fsd-africa-investments-pledges-19-5-million-to-fort...


UAE pledges $4.5bn for Africa clean energy projects

(Argus Media, Nairobi, 5 September 2023) The UAE will provide $4.5bn in finance to accelerate the development of clean energy projects in Africa, UN climate summit Cop 28 president-designate Sultan al-Jaber said today at the Africa Climate Summit in Nairobi. Abu Dhabi's state-owned renewables firm Masdar, Abu Dhabi Fund for Development, Etihad Credit Insurance, the country's export credit agency and Amea Power — a Dubai-based renewable-energy company — will provide the funds, al-Jaber said. Africa development bank's Africa50 investment platform will act as a strategic partner to help identify initial projects. The pledge aims to "catalyse at least an additional $12.5bn from multilateral, public and private sources," al-Jaber said. "This initiative will target countries with clear transition plans, robust regulatory frameworks and a real commitment to putting the necessary grid infrastructure in place," he added. Africa's annual climate finance needs amount to $250bn, according to the African Development Bank, but the continent only receives 12pc of the total, and less than 2pc is going to adaptation, according to al-Jaber.

https://www.argusmedia.com/en//news/2486005-uae-pledges-45bn-for-africa-clean-en...


USEXIM to Invest $5 Billion in Space Industry

(CNBC, Paris, 11 September 2023) The U.S. export credit agency is working through a $5 billion pipeline of applications related to the space industry, as companies look to fund projects in orbit in a tighter capital market. The Export-Import Bank of the United States, or EXIM, is no stranger to financing space projects such as satellite and rocket products. EXIM generally sees more applications during tougher economic times, as the previous bulk of its financing for the space sector came between 2010 and 2015. “In our pipeline related to this industry, about $1.3 billion are likely to come to fruition within a year and another $4 billion that we’re looking at are a little less further along,” Judith Pryor, EXIM’s first vice president and vice chair of the board of directors, said on Monday at the 2023 World Satellite Business Week conference.

https://www.cnbc.com/2023/09/11/us-export-import-bank-working-through-5-billion-...


Ukraine’s ECA-backed exports hit record high

(Global Trade Review, London, 30 August 2023) The export credit agency (ECA) of Ukraine insured loans for exports worth more than Hrn1bn (US$27.1mn) for the first time last month, as the agency continues to increase the scale of its support for trade from the war-torn country. The Ukrainian ECA was founded in 2018, began operations in 2022 and in 2021 covered Hrn12.5mn in financing for exporters. A total of 10 exporters were supported across the country. The largest individual loan, for Hrn20mn, was issued in Kyiv. The three banks that have provided the most in loans in 2022/23 are two major Ukrainian banks, Oschadbank and Ukrgasbank, and Vienna-headquartered Raiffeisen Bank. They issued loans of Hrn256.3mn, Hrn229mn and Hrn210mn, respectively, financing exports worth a total of Hrn5.33bn. In July, Russia withdrew from the Black Sea Grain Initiative, an agreement that saw the safe shipment of grain from Ukraine, and so far no new deal has been successfully negotiated. The news also comes weeks after the Ukrainian central bank said it was removing a ban on ECA-backed loan repayments, put in place amid Russia’s invasion of the country. The National Bank of Ukraine had barred the repayment of principal and interest on loans from foreign lenders. Following the invasion, several ECAs suspended coverage for Ukrainian trade, and some claimed the ban on overseas payments was the reason. While several countries, including Canada, the UK and the US, kept their coverage and credit limits for exports to Ukraine, in September 2022 the agency asked ECAs to restore their pre-war coverage limits.

https://www.gtreview.com/news/europe/ukraines-eca-backed-exports-hit-record-high...


US Exim approves first domestic manufacturing deal

(Global Trade Review, London, 5 September 2023) The Export-Import Bank of the United States (US Exim) has approved the first transaction under its domestic manufacturing programme, a direct loan of US$4.7mn to a Pennsylvania-based technology firm. The transaction comes more than a year after US Exim formally launched its Make More in America Initiative (MMIA), which in the time since has made available the agency’s range of medium and long-term loans for the establishment or expansion of US-based manufacturing facilities with an “export nexus”. US Exim had been recommended to explore the possibility of creating such a product a year earlier, following a 100-day White House review of supply chains for critical products, such as minerals and semiconductors.

https://www.gtreview.com/news/americas/us-exim-approves-first-domestic-manufactu...


Could ECAs finance cleaner steel & industrial hubs?

(Clean Technica, Bradenton FL, 15 August 2023) The climate finance community should be watching Sweden. Swedish steelmaker H2 Green Steel (H2GS), founded in 2020 to produce (using renewable hydrogen), is completing a landmark €5 billion+ fundraise for its first plant in Boden, near the Arctic Circle in northern Sweden, an industrial project finance template is taking shape and it’s important: heavy industry produces 30% of global carbon emissions and steelmaking is 7% alone. Export credit agencies may be less nimble than private lenders, due to the government oversight and political constraints they must operate within. But for these first-of-a-kind deals, they are proving to be powerful allies, both as debt guarantors and direct lenders. In the H2GS deal, Swedish ECA Svensk Exportkredit participated in the €3.3 billion senior debt tranche alongside commercial banks. Meanwhile, the core ECA, Allianz-owned Euler Hermes, committed to guaranteeing €1.5 billion of the senior debt.

https://cleantechnica.com/2023/08/15/5-lessons-for-industrial-project-finance-fr...


Hungary Exim wins World Bank support for ING loan

(Global Trade Review, London, 13 September 2023) The Hungarian Export-Import Bank (Hungary Exim) will boost sustainable lending after securing a €300mn loan extended by investment bank ING and covered by the investment insurance arm of the World Bank. The World Bank’s Multilateral Investment Guarantee Agency (Miga) issued €386mn in guarantees to ING, covering the Dutch lender’s principal, interest and other financing costs on the debt. Hungary Exim says it will use the credit line to launch new green financing products and primarily to support SMEs, although some “larger” sustainable projects may also benefit.

https://www.gtreview.com/news/europe/hungary-exim-wins-world-bank-support-for-in...


Canada restricts subsidies, but delays plan to end billions more in ECA fossil fuel finance

(Above Ground, Ottawa, 4 August 2023) Ottawa has taken a major step forward towards ending another significant component of its fossil fuel support. It announced last week a policy that makes Canada the first G20 country to publish a plan for delivering on the group’s 2009 commitment to phase out so-called “inefficient” subsidies to the fossil fuel sector. Under the new policy, federal support identified as a fossil fuel subsidy can no longer be provided unless it fulfills one of six criteria. Unfortunately, these criteria provide for significant exemptions that may allow fossil fuel companies peddling false climate solutions to benefit from billions of dollars a year in tax breaks and public spending. For example, Ottawa will still provide subsidies that facilitate “abated production processes” – language often used by oil companies to describe their use of carbon capture technology to reduce emissions from their own operations. This ignores the much larger quantity released when the fuels they produce are burned. Perhaps most significantly, the new policy leaves intact public financing from Export Development Canada (EDC), which Ottawa – contentiously – doesn’t consider a subsidy. Last year alone, EDC provided roughly $20 billion in financing to oil and gas companies, mostly in the form of loans, guarantees and insurance. This represents the overwhelming bulk of Canada’s financial support for the sector. Ottawa has pledged to “develop a plan” to phase out this financing as well. As of January the government has, under its Glasgow policy, barred EDC from providing new, direct financing for most oil and gas activities abroad. Yet this doesn’t touch the majority of EDC’s fossil fuel finance, which supports the industry’s operations in Canada.

https://aboveground.ngo/canada-restricts-subsidies-but-delays-plan-to-end-all-fo...


What's New for August 2023

"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.

  • OECD Modernisation of the Arrangement on Export Credits
  • Australian Government sued for failing to report the climate and biodiversity impacts of subsidising fossil fuel projects
  • Green Groups Call on EXIM to Reject PNG LNG Project
  • US fossil fuel hypocrisy is betraying the planet
  • The BRICS come of age [But what role for ECAs?]
  • EU’s €45bn plan to tackle Latam productivity woes
  • Feet to the Fire: Big Oil and the Climate Crisis
  • India's Reliance Jio ties up $2.2 bn funding from Sweden's EKN for 5G equipment
  • New Chinese growth drivers sought to boost exports amid weak global demand
  • Sinosure’s Country Blacklist?
  • Russian ECA plans special loans for African companies
  • Four Emirati women lead UAE’s powerful financial institutions
  • UKEF to provide £192m loan guarantee to boost Ukraine nuclear capabilities
  • Arafura Rare Earths offered EDC and Euler Hermes support
  • Euler Hermes to back €1.29bn financing for Angolan solar infrastructure development
  • EDC trying to reclaim $347 million insurance payout to Suncor linked to Libya unrest

OECD Modernisation of the Arrangement on Export Credits

(Sullivan&Cromwell LLP, New York, 10 August 2023) On July 14, the OECD published the revised text of the Arrangement on Officially Supported Export Credits (the “Arrangement”). This forms part of the landmark modernisation of the Arrangement, as previewed in March of this year. The revised text of the Arrangement is intended to allow export credit agencies from participating countries to support a wider range of climate-friendly and sustainable projects on more flexible terms. The main changes are focused on (1) expanding the scope of “green projects” that benefit from more favourable terms; (2) extending repayment terms and introducing greater repayment flexibility; (3) simplifying the Arrangement; and (4) introducing a more robust transparency regime. [As noted in our June 2023 What's New, the agreement does nothing to restrict oil and gas financing. OECD ECAs supported fossil fuel exports by an average of $41 billion from 2018 to 2020, almost five times more than their clean energy support ($8.5 billion) over the same period. It remains to be seen if allowing for more climate friendly and sustainable finance actually makes it happen.]

https://www.sullcrom.com/insights/memo/2023/August/S-C-Energy-Transition-Insight...


Australian Government sued for failing to report the climate and biodiversity impacts of subsidising fossil fuel projects

(Jubilee Australia, NSW, 18 July 2023) Jubilee Australia, a human rights and environmental organisation, has filed legal proceedings this morning (18th July) in the Federal Court of Australia against federal government agencies that subsidise new fossil fuel projects but don’t disclose the full environmental impacts of those activities. The claim is against Export Finance Australia (EFA) which is Australia’s export credit agency, and the Northern Australia Infrastructure Facility (NAIF), a $7bn fund for infrastructure in northern Australia. Both provide taxpayer-subsidised finance for risky new fossil fuel and related projects that would otherwise not go ahead. “There are very real fears that without clearer climate commitments, EFA and NAIF could fund infrastructure in Darwin designed to support a massive expansion of fossil gas – such as Middle Arm, or to subsidise some of the world’s largest fossil fuel companies such as TotalEnergies and ExxonMobil’s Papua LNG project in Papua New Guinea, similar to what EFA has previously done,” Luke Fletcher Director of Jubilee Australia said.

https://www.jubileeaustralia.org/news/latest-news-post/jubilee-sues-government


Green Groups Call on EXIM to Reject PNG LNG Project

(Common Dreams, Portland, 29 August 2023) More than two dozen advocacy groups from Papua New Guinea, the Asia Pacific region, and the United States on Tuesday urged the U.S. export credit agency to reject a liquefied natural gas project that they warned “presents significant financial risks and opportunity costs, as well as harmful climate impacts.” The groups — including the Center for Environmental Law and Community Rights Inc. (CELCOR), Food & Water Watch, Friends of the Earth (FOE) United States, Global Witness, Oil Change International (OCI), and Sierra Club — wrote to U.S. Export-Import Bank (EXIM) Chair Reta Jo Lewis about the Papua LNG project led by TotalEnergies. The coalition argued that approving Papua LNG not only would contradict the Biden administration’s 2021 pledge to end new public support for fossil fuel energy projects abroad and “further position the United States as an international laggard on climate, but would further jeopardize international climate goals, risk $13 billion USD in stranded assets, and put Pacific frontline communities at further environmental, social, and economic risk.”

https://www.commondreams.org/news/exim-papua-new-guinea-lng


US fossil fuel hypocrisy is betraying the planet

(Al Jazeera, Washington, 30 July 2023) While the president's rhetoric aligns with global climate promises, his administration has approved massive fossil fuel projects. Ahead of its Climate Ambition Summit in September, the United Nations is calling on global leaders to phase out fossil fuels. US President Joe Biden is painfully falling behind on this agenda and must urgently get back on track to maintain any credibility in these climate discussions. As we suffer through extreme heat in the US and across the globe, President Biden has been protecting fossil fuel profits instead of people.  From the Willow Project in Alaska to Gulf LNG exports, Biden props up dangerous oil and gas projects and the corporations that value their bottom line over our future... skipping important permitting processes meant to protect people and the environment, The latest reports from the International Energy Agency (IEA) and the Intergovernmental Panel on Climate Change (IPCC) show that maintaining a 50 percent chance of limiting global warming to 1.5 degrees Celsius (34.7 degrees Fahrenheit) requires an immediate end to investments in new coal, oil and gas production and hazardous liquified fossil gas (LNG) infrastructure. While Canada, the United Kingdom, and France have published policies keeping their promises to stop international funding for fossil fuels, the United States has refused to publish a policy.

https://www.aljazeera.com/opinions/2023/7/30/bidens-fossil-fuel-hypocrisy-is-bet...


The BRICS come of age [But what role for ECAs?]

(Project Syndicate, Cairo, 18 August 2023) by Hippolyte Fofack, Chief Economist and Director of Research at the African Export-Import Bank (Afreximbank). Given the BRICS’ economic success, more than 40 countries have shown an interest in joining the group and 22 have formally applied for membership. Expansion, trade and investment facilitation will be high on the agenda of the group's summit scheduled for August 22-24 in Johannesburg. They include many issues on which the bloc’s views diverge from those of the G7, such as sustainable development, global governance reform (especially reform of the IMF), and de-dollarization. An enlarged grouping could deepen trade and settlement in local currencies, accelerate de-dollarization, and lead the transition to a more multipolar world. The economic potential of Brazil, Russia, India, and China, the group – called the BRICS since the addition of South Africa – contributes more to global GDP (in purchasing-power-parity terms) than the G7. Since 2014, Russia’s trade with G7 countries has fallen by more than 36%, owing to unprecedented Western sanctions, while its trade with the other BRICS has increased by more than 121%. The International Monetary Fund forecasts that China and India alone will generate about half of global growth this year.  With geopolitical tensions running high, and the weaponization of the dollar for national-security purposes continuing to escalate, the BRICS have taken on new significance, offering trade diversion and other relief to weaken the effectiveness of sanctions and fast-tracking the transition to a multipolar world. Read the Summit Declaration here.

https://www.project-syndicate.org/commentary/brics-annual-summit-could-lead-to-e...


EU’s €45bn plan to tackle Latam productivity woes

(Financial Times, London, 31 July 2023) The European Commission’s recently released EU–LAC Global Gateway Investment Agenda identifies 130 types of projects scattered across the region in which it plans to inject €45bn by 2027. The roadmap targets the green transition, digitalisation, education and health, with projects in Chile, Colombia and Panama. “This is an enormous opportunity for Latin America to increase [European] partnerships, and receive not just investment but also technology transfer and finance to transform these areas,” says José Manuel Salazar-Xirinachs, executive secretary of the UN’s Economic Commission for Latin America and the Caribbean (ECLAC). The €45bn programme consists of funds and guarantees provided by the EU, its member states, development finance institutions and export credit agencies.

https://www.fdiintelligence.com/content/news/eus-45bn-plan-tackles-latams-produc...


Feet to the Fire: Big Oil and the Climate Crisis

(Energy Portal EU, London, 12 August 2023) The transition to clean energy is sparking intense debates as the climate crisis worsens. While cities, universities, and pension funds across the U.S. have divested from fossil fuels, the divestment movement has faced obstacles. In California, a bill that would have required public pension funds to stop investing in the largest oil, gas, and coal companies was killed for the second consecutive year. The bill’s rejection was due to concerns over its impact on workers’ retirement funds. Banks also play a significant role in the climate crisis by financing governments in dealing with its effects and lending to fossil fuel companies. The frequency and intensity of climate-induced emergencies have overwhelmed scientists and journalists, calling for a new approach to disaster reporting. Instead of treating each disaster as unrelated, climate change should be recognized as the connecting factor among them. Germany recently released a draft policy for the provision of guarantees in the energy sector, contradicting its pledge to end international financing for coal, oil, and gas projects made at COP26. Germany’s export credit agency’s policy raises questions about its commitment to ending fossil fuel funding.

https://www.energyportal.eu/news/as-climate-crisis-worsens-debate-heats-up-over-...


India's Reliance Jio ties up $2.2 bn funding from Sweden's EKN for 5G equipment

(Business India Today, Noida, 6 August 2023) "Reliance and its subsidiary Jio Infocomm JIL tied up its first ever Swedish Export Credit Agency (EKN) supported facilities of $2.2 billion equivalent making it the largest cover ever provided by EKN for a deal to a private corporate globally," Reliance Industries said, adding that the proceeds of the facilities shall be utilised to finance the equipment and services in relation to JIL's pan-India 5G roll out. Jio has committed to an investment of Rs 2 lakh crore to fulfill its ambitious pan-India 5G rollout plan, the company said. Jio started 5G network rollouts in October 2022. "Jio has launched its True 5G services across 2,300-plus cities/towns as of March 2023 and targets to achieve pan-India coverage by December 2023," the annual report said.

https://www.businesstoday.in/latest/corporate/story/reliance-jio-ties-up-22-bn-f...


New Chinese growth drivers sought to boost exports amid weak global demand

(China Daily, Beijing, 9 August 2023) China's foreign trade grew steadily in the first seven months of the year but exports in July declined at a steeper-than-expected pace amid subdued global consumer demand, which highlights the need to roll out stronger policy steps to further boost the country's foreign trade, experts said on Tuesday. Li Dawei, researcher at the Chinese Academy of Macroeconomic Research's Institute for International Economy, said the authorities should offer services such as exchange rate hedging, process export tax rebates faster, expand the scale of export credit insurance services and enhance customs clearance to foster new drivers of export growth amid falling global demand for the country's traditional export products such as electronic items, clothing and footwear.

https://www.chinadaily.com.cn/a/202308/09/WS64d25f68a31035260b81af93.html


Sinosure’s Country Blacklist?

(Lexology, London, 22 August 2023) China’s Sinosure, a major (virtually the only) provider of export credit insurance to China’s factories, plays an instrumental role in facilitating trade between Chinese suppliers and international buyers. However, there’s an under-discussed aspect of their operations that is detrimental for certain countries: the so-called “country blacklist”. Sinosure has a well-documented history of denying (via its infamous blacklist) export credit insurance to companies with outstanding payments to Chinese suppliers. One list outrightly refuses insurance for buyers hailing from certain countries. Though it’s tricky to pinpoint the exact countries on this list, via discussions with industry stakeholders, past Sinosure employees, and clients I have compiled the below list of probable countries allegedly sidelined by Sinosure. The accuracy of this list is dubious. It is not based on any official Sinosure documentation or communications. However, the persistent rumors surrounding this list should not be ignored.

https://www.lexology.com/library/detail.aspx?g=f8a9624c-1490-4f51-bf60-6fee972bd...


Russian ECA plans special loans for African companies

(Punch Nigeria, Lagos, 29 July 2023) President Vladimir Putin of Russia says his country will offer preferential loans to enable African companies to buy industrial goods from the European country and enjoy after-sales services. He said his government was devising a leasing mechanism tailored for Africa, and that the Russian Agency for Export Credit and Investment Insurance would provide insurance for the planned preferential loans. The Russian leader made the disclosure during the ongoing Russia-Africa Summit and Russia-Africa Economic and Humanitarian Forum holding in St. Petersburg, Russia. According to him, the Russia government is also about to establish a dedicated investment fund for co-financing infrastructure projects in the African continent.

https://punchng.com/russia-plans-special-loans-for-nigerian-companies-others/


Four Emirati women lead UAE’s powerful financial institutions

(Gulf Business, Dubai, 28 August 2023) With a career spanning nearly two decades, Raja Al Mazrouei joined Etihad Credit Insurance (ECI) as a board member in January 2022 and became the export credit agency’s managing director and CEO in November 2022 and January 2023, respectively. Other women recognized on Emirati Women’s Day include: Hana Al Rostamani, Group CEO, First Abu Dhabi Bank; Rola Abu Manneh, CEO, Standard Chartered UAE and Maryam Buti Al Suwaidi, CEO, Securities and Commodities Authority

https://gulfbusiness.com/4-emirati-women-in-the-financial-services-sector/


UKEF to provide £192m loan guarantee to boost Ukraine nuclear capabilities

(Sky News, London, 23 Augut 2023) Energy secretary Grant Shapps has visited Ukraine to announce fresh financial support for its nuclear fuel supply in a bid to end its reliance on Russia. The UK will provide a £192m loan guarantee to Ukraine's national nuclear company, Energoatom via the UK's export credit agency, UK Export Finance. Through the deal, UK-headquartered Urenco will supply Energoatom with uranium enrichment services that are vital for nuclear fuel, with nuclear power generating over half of the country's electricity. The government hopes this will strengthen Ukraine's energy security and help end the country's dependence on nuclear services and nuclear fuel from Russia, as well as further isolate Vladmir Putin.

https://news.sky.com/story/uk-to-provide-192m-loan-guarantee-to-boost-ukraine-nu...


Arafura Rare Earths offered EDC and Euler Hermes support

(AUManufacturing, No Address Provided, 31 July 2023) Arafura Rare Earths pushed ahead with engineering work and construction of its giant Nolans rare earths project in the Northern Territory in the latest quarter despite a softening market for the critical metals. Arafura has received a letter of interest from Canadian export agency Export Development Canada for the provision of up to US$300 million in debt financing. Nolans has support from the Northern Australia Infrastructure Facility of $150 million and in principle support for a loan guarantee of up to US$600 million from German export credit agency Euler Hermes.

https://www.aumanufacturing.com.au/arafura-pushes-ahead-despite-fall-in-rare-ear...


Euler Hermes to back €1.29bn financing for Angolan solar infrastructure development

(Bizcommunity, Cape Town, 31 July 2023) Standard Chartered plans to provide the Angolan Ministry of Finance €1.29bn in financing to construct solar photovoltaic electricity distribution infrastructure. The financing is backed by German export credit agency Euler Hermes. Of the €1.29bn total, €1.2bn is supported through Euler Hermes and the remaining €0.09bn is a commercial loan. The loan will fund 48 hybrid photovoltaic generation systems with energy storage that act as ‘mini grids’ and operate autonomously and aim to provide access to 100% renewable electricity for communities not connected to the national electricity grid.

https://www.bizcommunity.com/Article/7/704/240581.html


EDC trying to reclaim $347 million insurance payout to Suncor linked to Libya unrest

(Bowen Island Undercurrent, BC, 2 August 2023) The federal government is trying to reclaim nearly $350 million in insurance paid to Suncor Energy Inc. by Export Development Canada in the wake of political unrest in Libya. The oil giant claimed $300 million in risk mitigation payments for losses linked to Libyan energy assets after fighting between rival political factions spread to the country's oil crescent region in 2015, a Federal Court judge said in a ruling this week. The total — $347 million with interest — was determined by an arbitrator in 2019. But Export Development Canada, which insures against losses caused by political violence, argues that Suncor's oil production facilities still deliver returns for the Calgary-based company. The insurance claim was paid under a policy underwritten by Export Development Canada for Petro-Canada in 2006, which Suncor then came into following their merger in 2009.

https://www.bowenislandundercurrent.com/the-mix/feds-try-to-reclaim-347-million-...


What's New for July 2023

"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?

Civil societies say Germany's plan for export credit guarantees violates climate commitments

(Reuters, Berlin, 25 July 2023) Environmental groups on Tuesday criticized Germany's draft policy on export credit guarantees as too vague and soft on financing for natural gas projects, as Berlin attempts a balancing act between climate protection and energy security. Germany supports exports by offering guarantees for non-payment caused by economic and political factors, helping companies to secure political backing for their projects and better financing terms. On Monday, the economy ministry published its first draft guidelines for such guarantees for the energy, transport and industry sectors, tying them to climate protection targets. The guidelines set three categories for future projects: a positive green for projects contributing to achieving climate targets that would be eligible for government support, a neutral white for projects that do not make a significant contribution to climate goals but would still receive support, and a climate-damaging red to be excluded from such guarantees. But the draft drew heavy criticism from environmental organizations, which argued that Germany was breaking its international commitment to ending public financing for fossil fuels by the end of 2022, by offering too many exemptions for natural gas projects. "These plans highlight the German governments' shameless disrespect of its international commitments and climate goals," Martin Kaiser, executive director of Greenpeace Germany, said. At the 2021 United Nations COP26 climate summit, 20 countries, including Germany, promised to stop public funding for overseas fossil fuel projects by the end of 2022. Environmental groups have raised concerns about Germany’s policy draft on export credit guarantees, stating that it is too vague and lenient regarding the financing of natural gas projects.

https://www.reuters.com/business/environment/germanys-plan-credit-guarantees-vio...


Biden breaks climate pledge again with new EXIM LNG approval

(Price of Oil, Washington, 18 July 2023) Last  Friday, the Export-Import Bank of the United States (EXIM) — the official export credit agency of the U.S.— insured USD 400 million in revolving credit facilities for global commodities trader Trafigura. The newly approved transaction will allow Trafigura Pte. to purchase liquefied natural gas (LNG) from U.S. exporters to sell primarily to European buyers. “It is alarming that Biden continues to break climate commitments to end international public finance for fossil fuels. Instead, he uses public money to prop up the dirty industry that fuels climate disaster and harms communities, while we suffer record breaking extreme heat. “Other countries like Canada, the UK, and France have kept their promise to end international public finance for fossil fuels, and are already shifting billions of dollars towards clean energy. There needs to be accountability for signatories like the Biden administration for going back on their word.”

https://priceofoil.org/2023/07/18/biden-breaks-climate-pledge-again-with-new-exi...


Italy’s SACE breaks climate promise with $500 million guarantee for Peru oil refinery

(Price of Oil, Washington, 11 July 2023) Italy’s export credit agency SACE has approved a $500 million guarantee in loans for the Talara oil refinery in Peru, once again breaking their commitment to end their international public finance for fossil fuels by the end of 2022. SACE is the biggest public financier of fossil fuels in Europe. Between 2016 and 2021, SACE supported EUR 13.7 billion in fossil fuels. A study by Oil Change International last year revealed that SACE is considering financing for international fossil fuel projects with emissions equivalent to more than 3 times Italy’s entire annual emissions. At the UN COP26 climate summit in 2021, 39 countries and financial institutions, including Italy, signed the Glasgow Statement, committing signatories to end their direct international public financing for fossil fuels by the end of 2022. Oil Change International’s Public Finance for Energy Database shows that G20 countries and the major multilateral development banks (MDBs) provided at least USD 63 billion per year in international public finance for oil, gas, and coal projects between 2018 and 2020. This is 2.5 more than their support for renewable energy.

https://priceofoil.org/2023/07/11/italys-sace-breaks-climate-promise-with-500-mi...


Who are the major financiers of Brazilian FPSOs?

(BN Americas, Santiago, 7 July 2023) Although the energy transition and ESG issues are gaining traction, many banks and credit export entities keep financing oil and gas undertakings, such as floating production storage and offloading units (FPSOs) ordered by Brazil’s federal oil firm Petrobras. FPSOs are used for the production and processing of hydrocarbons, and for the storage of oil. This situation will not change much as demand for hydrocarbons will remain and a significant portion of oil companies’ decarbonization capital expenses comes from oil and gas revenues. Furthermore, the geopolitical context, with the war in Ukraine and gas supply in Europe, has reignited energy security concerns. Meanwhile, financial products like green and sustainability linked bonds, developed to support companies that do not operate in totally green areas, do not yield higher returns. According to Daniela Davila, a partner at Vieira Rezende law firm, new FPSOs are mainly financed by Asian financial institutions (banks and leasing houses) and export credit agencies from countries such as China, Japan, South Korea and Singapore, where shipyards that build the hulls/modules of the units are located. Some banks, such as BNP Paribas and HSBC, have announced their exit from this industry, while New York-based Nordea has shown less appetite for oil and gas. On the other hand, traditional offshore players like Norway’s DNB or Germany’s Deutsche Bank continue to support the sector. CNOOC and CNODC are also Petrobras’ partners in the Mero field, which will receive the Sepetiba unit this year and Alexandre de Gusmão in 2025. Banks from Japan, like Sumitomo Mitsui Banking Corporation and Japan Bank for International Corporation, often work with Japan's Modec, which signed several charter contracts of FPSOs under construction with Petrobras and one for Equinor’s Bacalhau field. Among other financial institutions with tradition in FPSO financing are the UK’s Standard Chartered Bank; DBS Bank, United Overseas Bank, Clifford Capital and Oversea-Chinese Banking Corporation from Singapore; China Investment Corporation; Korea Development Bank (South Korea); Maybank and CIMB (Malaysia); Société Générale and Natixis (France); and Mitsubishi UFJ Financial Group (Japan). Export credit agencies in the sector include China’s Sinosure, Nippon Export and Investment Insurance (Japan) and Sace (Italy).

https://www.bnamericas.com/en/features/who-are-the-major-financiers-of-brazilian...


Coal-project financing outside of China hits 12-year low

(Resiliance, US-UK-AU, 11 July 2023) The global energy crisis fueled by Russia’s invasion of Ukraine sparked widespread fears of a “return to coal” – yet, to date, there is scant evidence of this. Indeed, in the world of project financing, any supposed rebound has been illusory. The financing of coal power outside of China has now hit its lowest point since 2010, according to our latest figures in the Global Coal Project Finance Tracker (GCPFT). We found that for every $1 in coal project lending that reached financial close in 2022, another $14 earmarked for previously proposed projects was stopped. But, despite a myriad of economic, political and social headwinds that have slowed funding to the coal sector, project lending continues to display resilience, particularly in southeast Asia.

https://www.resilience.org/stories/2023-07-11/coal-project-financing-outside-of-...


AFRICAN NGOS URGE END OF SUPPORT FOR FOSSIL FUEL PROJECTS IN AFRICA AND SIGN THE GLASGOW STATEMENT

(Environment Governance Institue, Seeta Uganda, 18 June 2023) Thirty four African environmental and human rights civil society organisations and 13 international supporters wrote the African Export-Import Bank (Afreximbank) in anticipation of the 30th Afreximbank Annual General Meeting (AGM) from 18th to 21st June 2023 to urge stronger environmental commitments and actions within the financial sector, noting that the impacts of climate change are increasingly evident across the continent, with vulnerable communities and ecosystems bearing the brunt of these effects, and yet financial institutions such as Afreximbank have continued to invest in the further expansion of fossil fuel projects, thus accelerating the climate emergency. Specifically, they note with great concern that across the region, Afreximbank has continued to support a list of finance fossil fuel projects, which contravenes Article 2.1(c) of the Paris agreement signed by all 54 African countries which calls on parties to make finance flows consistent with a pathway towards low greenhouse gas (GHG) emissions and climate-resilient developments.

https://egiuganda.org/wp-content/uploads/2023/06/African-CSOs-Memo-to-Afriexim-B...


Guarantees for 1st Batch of Korea’s Arms Exports to Poland limit 2nd batch due to 40% limit on equity capital

(Business Korea, Seoul, 4 July 2023) According to the Export-Import Bank of Korea’s loan and guarantee data by item and country on July 3, the state-run bank provided 488.2 billion won (US$375.7 million) in financial support in the form of loans and guarantees to the defense sector in the first five months of this year. The total amount of loans and guarantees provided by Korea Eximbank to all industries in the same period was 31.8 trillion won. Export finance for Korea’s defense exports accounted for 1.6 percent of the total export finance provided by Korea Eximbank this year. According to the Enforcement Decree of the Export-Import Bank of Korea Act, the state-run lender cannot provide credit to the same borrower for more than 40 percent of its equity capital. Korea Eximbank will thus be unable to afford to give additional loans and guarantees to Poland if it provides US$5 billion in support for the first batch. The amount of loans and guarantees provided by Korea Eximbank in connection with purchases of weapons signed from 2018 to 2021 ranged from 100 to 500 billion won per year. But the figure surged to the two trillion won range in 2022. Guarantees with Poland accounted for most of the financial support, in the US$2 trillion range. In addition to Poland, Korea Eximbank provided defense-related financial support to the United Arab Emirates (UAE), Egypt, and Indonesia in 2022.

http://www.businesskorea.co.kr/news/articleView.html?idxno=117705


OECD amends export credit agency arrangement to boost green trade

(Institue of Export & Int'l Trade, london, 20 July 2023) The Organisation for Economic Co-operation and Development (OECD) has modernised the terms of its Arrangement on Officially Supported Export Credits to allow export credit agencies (ECAs) covered by the arrangement, which includes UKEF in the UK, to extend more generous incentives for climate-friendly transactions. The OECD describes the Arrangement as a “gentlemen’s agreement” between participants, which include Australia, Canada, the EU, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the UK and the US. Under the new rules, UKEF will now be allowed to offer better or longer repayment terms and more flexible finance structures for more renewable and green transactions. The new OECD arrangement follows a proposal from EU countries to do more to encourage green trade and climate-friendly transactions. It includes an expansion of the scope of green or climate-friendly projects eligible for longer repayment terms (eligible under the “Climate Change Sector Understanding” or CCSU). These include projects related to environmentally sustainable energy production; CO2 capture, storage, and transportation; transmission, distribution and storage of energy; clean hydrogen and ammonia; low emissions manufacturing; zero and low-emission transport; and clean energy minerals and ores.

https://www.export.org.uk/news/646406/OECD-modernises-export-credit-agency-arran...


Korea Eximbank prepares ECA Version 2.0 to boost exports

(Pulse News, Soeul, 24 July 2023) The Export-Import Bank of Korea (Korea Eximbank) is gearing up to upgrade its traditional model of financial support for promoting exports of Korean companies to a new level with the introduction of Export Credit Agency (ECA) Version 2.0. The  management strategy, termed ‘Beyond Core,’ aims to move beyond the core responsibility of supporting export expansion and evolve the ECA to adapt to the changing landscape. As part of this strategy, Korea Eximbank is considering activating limited investment operations. Similar to Japan Bank for International Cooperation (JBIC) and Export Development Canada (EDC), which have set up investment-specific subsidiaries for development finance in developing countries

https://pulsenews.co.kr/view.php?year=2023&no=562866


Piyush Goyal meets bankers on export credit to MSME exporters aiming to achieve $1 trillion merchandise exports

(India Times, New Delhi, 30 June 2023) Minister of Commerce and Industry Piyush Goyal on Wednesday urged Indian banks to provide MSMEs with improved and inexpensive loans in order to meet the aim of 1 trillion dollars in product exports. According to the official statement, the meeting was convened by the Department of Commerce in coordination with Export Credit Guarantee Corporation Limited, (ECGC) in New Delhi. The Commerce and Industry Minister also mentioned at the meeting that the ECGC might look into expanding the programme that was proposed for nine banks to all banks in order to improve the export credit offtake for MSME Exporters. The Commerce and Industry Minister further informed that in the next four months, all the ECGC services would be digitised so that physical interaction can be minimised, it added.

https://economictimes.indiatimes.com/small-biz/trade/exports/insights/piyush-goy...


£3.5bn UKEF support given to UK manufacturing, £1.1bn to construction in 2022/23

(PES Media, Rochester, 5 July 2023) UK Export Finance (UKEF) has published its annual results for 2022-23, which show the government’s export credit agency provided £3.5bn in new, direct support for UK manufacturing exporters in the last 12 months. The financing has directly supported up to 34,000 jobs in the sector. Overall, UKEF provided £6.5bn in new direct support to UK exporters in 2022-23. The financing, provided through loans, guarantees and insurance policies. UKEF spent £1.1bn supposedly supporting the UK construction sector last year.

https://www.pesmedia.com/35bn-support-given-to-uk-manufacturing-industry-by-ukef


Cedar Rose reaffirms its longstanding partnership with Sinosure

(ZAWYA, Dubai, 11 July 2023) Cedar Rose, a Cyprus and Dubai based corporate data, credit, risk and compliance firm, has reaffirmed its longstanding partnership covering over 25 years of relationship with Sinosure, a prominent Chinese state-owned enterprise responsible for export credit insurance. Cedar Rose's services play a crucial role in enabling comprehensive risk assessments for Sinosure. By leveraging Cedar Rose's Company Credit Reports and analysis services, Sinosure gains access to a wealth of data, including company identification, structure, and financial information. These services are obtained through Cedar Rose's API, with a particular focus on the Middle East and North Africa (MENA) region. Antoun Massaad, Co-Founder and CEO of Cedar Rose stressed that “The partnership between Cedar Rose and Sinosure has proven valuable in de-risking trading activities, supporting Sinosure’s risk management practices”.

https://www.zawya.com/en/press-release/companies-news/cedar-rose-reaffirms-its-l...


India's ECGC may permit Sri Lanka to repay debt over 12 years

(MINT, New Delhi, 6 July 2023) India plans to allow Sri Lanka up to 12 years to repay its debt to help ease the financial burden on the island-nation, India’s Export Credit Guarantee Corporation (ECGC) Ltd’s chairman-cum-managing director M.Senthilnathan said. Sri Lanka, facing its worst economic and political crisis in over seven decades, owes $7.1 billion to bilateral creditors— $3 billion owed to China, $2.4 billion to the Paris Club and $1.6 billion to India. Senthilnathan added that the National Export Insurance Account, managed by the ECGC, has received close to ₹4,500 crore worth of claims from exporters facing default in countries such as Sri Lanka, Zambia, Suriname and Ghana which faced extreme economic hardships after covid-19 and the Ukraine war. China has so far not joined the common platform of negotiators on Sri Lanka’s debt restructuring, though it has joined as an observer. In response to Sri Lanka’s request for long-term relief from major creditors like India, Japan, and China, the Chinese Exim Bank has agreed to grant Sri Lanka a two-year moratorium. It said it would support the country’s efforts to secure a $2.9 billion loan from the International Monetary Fund according to a report by Reuters.

https://www.livemint.com/economy/india-plans-to-extend-repayment-period-for-sri-...


UKEF is not building a multimillion pound railway line in Turkey

(Full Fact, London, 26 July 2023) Earlier this week Greater Manchester mayor Andy Burnham tweeted a screenshot of a UK government press release with the headline “UK announces £680m for new high-speed electric railway in Turkey”. Alongside the screenshot, Mr Burnham tweeted “So we can’t afford to keep our own ticket offices open - but we can afford to build a new line in Turkey?” Mr Burnham’s suggestion that the UK is financing a new railway line in Turkey is misleading—the £680 million figure used in the government press release refers to a loan provided by three banks (J.P. Morgan, ING Bank and BNP Paribas) which has been underwritten by the UK government’s export credit agency. The Italian, Austrian and Swiss export credit agencies are also providing reinsurance.

https://fullfact.org/online/uk-turkey-railway-loan/


‘Wolves’ Clever Opportunism: Securing £99m UKEF Loan’

(G3 Football, Hillside NJ, 14 July 2023) Wolverhampton Wanderers have recently made headlines for securing a £99 million loan from the UK government. While some may view this as a sign of financial trouble, experts argue that it is a shrewd move by the club. In this article, we will explore the details of the loan, why Wolves qualified for it, and its implications for the club. The loan was obtained by Wolves last year from the government agency UK Export Finance (UKEF). UKEF is the UK’s export credit agency and aims to ensure that no viable UK export fails due to lack of finance or insurance. Wolves qualified for the loan because they export a range of goods and services, including merchandise and football through the Premier League’s overseas broadcast rights.

https://g3.football/wolves-clever-opportunism-securing-99m-gov-loan/


What's New for June 2023

"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.

  • How Major Economy's ECAs are Breaking their own Climate Change Pledges
  • OECD allows support for fossil-based technologies under agreed ‘climate incentives’
  • Norway's Eksfin accused of ‘climate hypocrisy’ for financing Turkish gas field
  • UK's top court rejects Friends of the Earth’s appeal over government’s funding for Mozambique LNG project
  • Indonesia's Pertamina reaches $3.1 billion ECA and bank financing deal for Balikpapan oil refinery
  • SACE signs agreement with Saneg for methanol-to-olefin gas chemical complex
  • Mercuria closes deals worth over US$5bn including first ECA backing by SACE
  • SBM Offshore completes US$1.615 billion financing of Alexandre de Gusmão offshore Brazil FPSO
  • EU in talks over export credit facility for ECAs, banks
  • Berlin loosens requirements for Ukraine export guarantees
  • Ukraine axes ban on ECA-backed loan repayments
  • Japan’s NEXI acquires stake in African Trade Insurance Agency
  • African sovereign debt poses challenges for ECA activity

How Major Economy's ECAs are Breaking their own Climate Change Pledges

(Byline Times, London, 16 June 2023) OECD countries are continuing to pour tens of billions of pounds into fossil fuel projects, despite their obligations to switch to clean energy sources. Advanced economies are breaking their own climate change obligations by investing massively in fossil fuels rather than switching to clean energy sources, according to a landmark new report. The OECD’s export finance initiatives are in contravention of internationally-determined climate change obligations. In 2021, 39 governments signed the Clean Energy Partnership at the COP26 conference in Glasgow, an agreement which committed to “driving multilateral negotiations in international bodies, in particular in the OECD, to review, update and strengthen their governance frameworks to align with the Paris Agreement goals”. Yet despite 52% of OECD countries having signed the Partnership agreement, fossil gas received 30% of all OECD export finance between 2018 and 2020. The report confirmed that “despite long standing commitments to align financial flows with climate goals, public finance and, in particular, export finance remains skewed in favour of fossil energy”.

https://bylinetimes.com/2023/06/16/how-major-economies-are-breaking-their-own-cl...


OECD allows support for fossil-based technologies under agreed ‘climate incentives’

(Price of Oil, Paris, 23 June 2023) The Organisation for Economic Co-operation and Development (OECD) recently agreed on terms and conditions for climate-friendly export financing as part of its revised Climate Change Sector Understanding (CCSU). While the agreement enables incentives for renewable energy projects like solar and wind, it also provides incentives for hydrogen and ammonia, including fossil gas derived hydrogen, and fossil fuel power plants with carbon capture and storage (CCS). The agreement does nothing to restrict oil and gas financing. The  OECD’s export credit agencies are  the world’s largest international public financiers of fossil fuels. Recent analysis by Oil Change International shows that OECD countries supported fossil fuel exports by an average of $41 billion from 2018 to 2020, almost five times more than their clean energy support ($8.5 billion) over the same period. As such, OECD Export Credit Agencies (ECAs) play a critical role in propping up high-emitting projects, such as LNG infrastructure, which in turn shapes our future global energy system. For example, OECD ECAs have supported 56 percent of new hazardous liquified gas (LNG) export terminal capacity built in the last decade. According to International Energy Agency (IEA) and Intergovernmental Panel on Climate Change (IPCC) scenarios, maintaining a 50% chance to limit global warming to 1.5°C requires an immediate end to investments in new oil, gas, and coal  production and LNG infrastructure. This underlines an urgent need for the OECD to, as called for by over 175+ CSOs, end export support for new fossil fuel projects.

https://priceofoil.org/2023/06/23/oecd-allows-support-for-fossil-based-technolog...


Norway's Eksfin accused of ‘climate hypocrisy’ for financing Turkish gas field

(Enviro News, Lagos, 9 June 2023) The Norwegian government has been accused of climate hypocrisy after it emerged that the government export credit agency, Eksfin, has approved finance for the Sakarya gas field in the Black Sea. The Sakarya gas field project, owned by Turkish Petroleum, a Turkish state-owned enterprise, is considered to contain “the largest gas reserves discovered in the Turkish Exclusive Economic Zone as well as in the Black Sea.” The field is set to continue production “until the field reaches its economic limit in 2057.” Norway has previously been criticised for being the last country in north-west Europe to not sign the Glasgow Statement, an agreement at the COP26 climate conference that commits signatories to end government-backed finance for international fossil fuel projects. Previous analysis of the Sakarya gas field by Oil Change International shows that the project will emit at least 140 million tonnes of carbon dioxide in its first phase. Norway’s annual emissions of 48.9 million tonnes (as of 2022) mean this project will emit nearly three times the annual emissions of the entire country. Campaigners are accusing the Norwegian government of inconsistency and hypocrisy. While Norway is a major donor to aid projects that help developing countries mitigate and adapt to climate change, it is also financing fossil fuel projects that make climate change worse.

https://www.environewsnigeria.com/norway-accused-of-climate-hypocrisy-for-financ...


UK's top court rejects Friends of the Earth’s appeal over government’s funding for Mozambique LNG project

(Upstream Online, London, 23 June 2023) The UK’s top court has thrown out an application by Friends of the Earth (FoE) to appeal a case it lost earlier this year against the government’s funding of TotalEnergies’ $20 billion Mozambique LNG project. FoE had argued in the Court of Appeal in January this year that the UK should not have provided export credit finance to the huge liquefied natural gas project because it went against the government’s climate change policy and failed to adequately take into account Scope 3 emissions from the scheme.

https://www.upstreamonline.com/energy-transition/uks-top-court-rejects-friends-o...


Indonesia's Pertamina reaches $3.1 billion ECA and bank financing deal for Balikpapan oil refinery

(Reuters, Jakarta, 24 June 2023) Indonesia's state energy company Pertamina (PERTM.UL) reached a $3.1 billion financing deal with a number of export credit agencies and commercial banks to fund the upgrade of its Balikpapan refinery, the company said on Saturday. The lenders include export credit agencies from South Korea, Italy and the United States, and 22 commercial banks. Pertamina will use the funds for the expansion of its Balikpapan oil refinery to a capacity of 360,000 barrels per day (bpd), from 260,000 bpd. Pertamina claims it will be able to produce more environmentally friendly fuels. [Oil Change International noted in May that US President Biden has broken a major G7 climate promise by financing this Indonesian oil refinery.]

https://www.reuters.com/business/energy/indonesias-pertamina-reaches-31-bln-fina...


SACE signs agreement with Saneg for methanol-to-olefin gas chemical complex

(Hydrocarbon Engineering, Surrey, 13 June 2023) Italy’s State Export Credit Agency (SACE) has signed a financial memorandum with Uzbekistan’s largest oil company, Saneg, concerning an innovative methanol-to-olefin gas chemical complex (GCC MTO), that is currently under construction in the Bukhara region of Uzbekistan. Masrur Shakirov, General Director of GCC MTO, said: “Italian financial and technical support have been crucial to the development of this facility from the very beginning. The new memorandum confirms Italy’s ongoing commitment to supporting GCC MTO, while providing substantial new credit facilities to Saneg from Italian financial institutions.” This is the second major agreement recently finalised concerning GCC MTO. On 25 May 2023, Gas Chemical Complex MTO Central Asia LLC signed an industrial gas processing agreement with Air Products to build a methanol production facility. Known as Methanol Island, the facility would have capacity of 1.34 million tpy, as part of the GCC MTO complex.

https://www.hydrocarbonengineering.com/petrochemicals/13062023/sace-signs-agreem...


Mercuria closes deals worth over US$5bn including first ECA backing by SACE

(Global Trade Review, London, 28 June 2023) Mercuria has secured over US$5bn in new and renewed financing facilities, including its first funding backed by an export credit agency (ECA). The global commodities trader, which focuses on energy products, metals and minerals, says it has closed three financing arrangements from a range of global banks. Among those is a €500mn (US$546mn) multi-currency facility guaranteed by Italy’s ECA Sace, to supply the country with natural gas and LNG. Mercuria group CFO says the deal is the trader’s first ECA-backed transaction and comes after Italy agreed to support a similar financing deal with Mercuria’s rival Trafigura for the supply of metals to the country. While both are import deals, they were struck under Sace’s Push Strategy, which aims to support Italian suppliers’ access to international markets by targeting large foreign buyers. Natixis, Société Générale, UBS and UniCredit are mandated lead arrangers on the facility while Abu Dhabi Commercial Bank is lead arranger. Mercuria Energy Group Ltd is a Cypriot-domiciled multinational commodity trading company active in a wide spectrum of global energy markets including crude oil and refined petroleum products, natural gas, power, biodiesel, base metals and agricultural products.

https://www.gtreview.com/news/global/mercuria-closes-three-financing-deals-worth...


SBM Offshore completes US$1.615 billion financing of Alexandre de Gusmão offshore Brazil FPSO

(Yahoo Finance, Brazil, 20 June 2023) SBM Offshore is pleased to announce it has signed the project financing of its floating production storage and offloading unit (FPSO) Alexandre de Gusmão for a total of US$1.615 billion. The project financing is provided by a consortium of 12 international banks with insurance cover from 3 international Export Credit Agencies. It will have a processing capacity of 180,000 barrels of oil and 12 million m3 of gas per day. The FPSO construction is progressing as per plan with the expected first oil in the second half of 2024. FPSO Alexandre de Gusmão is owned and operated by special purpose companies owned by affiliated companies of SBM Offshore (55%) and its partners (45%). The FPSO will be deployed at the Mero unitized field located in the Santos Basin approximately 160 kilometers offshore Rio de Janeiro in Brazil, under a 22.5-year lease and operating contract with Petróleo Brasileiro S.A. The Mero unitized field is operated by Petrobras (38.6%), in partnership with Shell Brasil (19.3%), TotalEnergies (19.3%), CNPC (9.65%), CNOOC (9.65%) and Pré-sal Petróleo S.A. – PPSA (3.5%), representing the Government in the non-contracted area. [Despite very extensive press coverage of the project, not one article mentions which 3 ECAs are providing insurance coverage.]

https://finance.yahoo.com/news/sbm-offshore-completes-us-1-165900363.html


EU in talks over export credit facility for ECAs, banks

(Global Trade Review, London, 19 June 2023) The EU is weighing the launch of an export credit facility that could reinsure member state export credit agencies (ECAs) and refinance commercial loans, as it seeks to arrest the relative decline in exports from the bloc to key overseas markets. The European Commission, parliament and member states are now in talks to devise a strategy on export credits following the publication last week of a feasibility study which recommended several steps the EU could take in the next three years. Policymakers are seeking to harness the financial might of ECAs and export-import banks across its 27 countries by aligning them to key EU strategies such as transitioning to green energy, overseas investment and competition with China and the US. The feasibility study, authored by independent consultants and launched by the Commission last year, lamented a 5% drop in the EU’s share of merchandise goods exports to high-risk third countries in the decade to 2020, and double-digit declines in the share of EU contractors in business in Africa, Asia and the Middle East. Exports to third countries prop up some 38 million EU jobs, according to the study. ECAs are widely used by contractors to insure and lower the cost of financing capital-intensive infrastructure projects in what are deemed to be high-risk markets for credit, which include major developing economies such as Turkey, Vietnam, South Africa, Nigeria and Pakistan.

https://www.gtreview.com/news/europe/eu-in-talks-over-export-credit-facility-for...


Berlin loosens requirements for Ukraine export guarantees

(Yahoo Finance, Berlin, 22 June 2023) The German government has loosened its requirements for export credit guarantees for companies doing business with Ukraine in an effort to shore up economic recovery in the country, the economy ministry said Thursday. Effective immediately, the application procedure will no longer require bank guarantees if the risk is justifiable, replacing a stricter case-by-case examination, the ministry said. It added that small- and medium-sized companies stood to benefit from the changes. "The simplified procedures that have now been decided will speed up many things," Economy Minister Robert Habeck said. In 2022, the German government secured goods and services worth 14.9 billion euros ($16 billion) with export credit guarantees. In 2021 - before Russia's full-scale invasion of Ukraine - the figure stood at 20.2 billion euros. Export credit guarantees for business with Russia and Belarus are no longer issued by the German government as a consequence of the war in Ukraine.

https://finance.yahoo.com/news/berlin-loosens-requirements-ukraine-export-090709...


Ukraine axes ban on ECA-backed loan repayments

(Global Trade Review, London, 19 June 2023) Ukraine’s central bank has lifted restrictions on domestic firms’ repayments on loans backed by foreign export credit agencies (ECAs), wagering that the move will help attract much-needed foreign investment and financing for imports. The National Bank of Ukraine slapped a wide-ranging ban on cross-border currency transfers and purchases of foreign currency last year, immediately after Russia’s invasion of the country. The prohibition included the repayment of principal and interest on loans extended by foreign lenders, a decision that contributed to most ECAs suspending coverage of Ukraine.

https://www.gtreview.com/news/europe/ukraine-axes-ban-on-eca-backed-loan-repayme...


Japan’s NEXI acquires stake in African Trade Insurance Agency

(Zawya, Dubai, 19 June 2023) Japan’s export credit agency, Nippon Export and Investment Insurance (NEXI), has acquired a stake in the African Trade Insurance Agency (ATI), a Pan-African guarantee institution, following a capital infusion of $14.8 million. The equity investment supports the cooperation between Africa and Japan under the Tokyo International Conference on African Development (TICAD), ATI said in a statement. “As Japan expands its foreign direct investments and footprint into Africa, its membership in ATI will not only improve our institution’s capacity to support trade and investment across the continent but will also attract more Japanese investors under the African Continental Free Trade Area (AfCFTA),” said ATI Chief Executive Officer Manuel Moses.

https://www.zawya.com/en/projects/industry/japans-nexi-acquires-stake-in-african...


African sovereign debt poses challenges for ECA activity

(TFX News, London, 31 May 2023) The spectre of increasing sovereign debt has the potential to swamp future export finance deals and projects in several African jurisdictions. The changes to the OECD Arrangement on officially supported export credit financing put forward in March this year has been ‘music to the ears’ of all those in the industry calling for fundamental reform. We expect to hear more detail from the OECD in July, but from the provisional announcement it looks like tenors on certain transactions will be extended and repayment schedules relaxed for deals in certain sectors, giving greater impetus to deals and projects in the energy transition arena as well as providing a boost to social infrastructure transactions. Many African markets are seen as being challenging largely because of a range of serious risks – and the main ones are often cited as: the debt trap, coups, civil war, terrorism and political risk. In fact, at a recent TXF conference I learned that there are currently 68+ armed conflicts taking place across Africa – when I had originally estimated 40. This announcement has been strongly welcomed by those working in emerging markets, and particularly those active in African markets where so much basic infrastructural and social project work is required ... and where ECA-backed finance will be key.

https://www.txfnews.com/articles/7551/African-sovereign-debt-poses-challenges-fo...


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