ECA Watch Newsletter

What's New July 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

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

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

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

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


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

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

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


SINOSURE maintains steady business growth in H1

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

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


Danish ECA EKF moves to hide environmental negligence in Armenia

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

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


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

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

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


Serious concerns’ raised over UKEF by Spotlight on Corruption

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

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


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

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

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


Ditch Public Financing of Fossil Fuels

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

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


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

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

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


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

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

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


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

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

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


HSBC arranges first Green ECA loan in Saudi Arabia

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

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


Portugal launches plan to boost exports hit by pandemic

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

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


Finveram warns of 2020 loss due to coronavirus

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

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


What's New June 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

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

ECA-Watch finds EU ECA compliance reviews insufficient

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

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

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

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

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

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

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

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


ECA Watch briefing on COVID-19 and Climate

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

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


EU Council adopts exceptional rules to facilitate ECA lending under Covid

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

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


France moves to save aerospace sector via ECA spending

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

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


Export-Import Bank Back To Boosting Boeing

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

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


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

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

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


Hard-hit Canadian oil companies still waiting for EDC loans

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

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


EDC lifeline to Saudi armoured car maker raises questions

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

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


Canada now second to China in public finance for fossil fuels

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

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


Canada undermining its own climate goals via EDC support of pipelines

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

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


Fossil fuel companies dominate UK Export Finance energy hospitality gifts

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

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


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

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

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


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

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

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


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

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

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


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

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

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


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

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

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


US SENATORS CALL FOR QUICK VOTES ON EX-IM NOMINEES

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

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


Russia's Eximbank opens first correspondent account in Uzbek currency

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

https://tass.com/economy/1164545


What's New May 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

  • ECAs and emergency COVID-19 budgets
  • Covid-19 recovery will need US$5tn in trade credit capacity
  • Will COVID-19 Spark a Paradigm Shift for Businesses?
  • Why $77 Billion a Year in Public Finance for Oil, Gas, and Coal Is Even Worse Than It Sounds
  • In the Face of COVID-19, Governments Have a Choice: Resilient Societies or Fossil Fuel Bailouts?
  • EDC is bailing out the fossil fuel industry. Will Canadians be given a full accounting of the costs?
  • Coastal GasLink pipeline gets loan of up to $500M from Canada's EDC
  • ECA aircraft Financing in a post-COVID-19 world
  • Lawyers warn continued gas lending will breach EIB legal duties
  • JBIC muddies comments on ending coal finance
  • South Korean ECA backs $2 billion coal company bailout
  • The Coal Policy Tool: A Tool for Quitting Coal
  • European Commission approves €903 million Belgian trade credit reinsurance scheme
  • Fiat Chrysler in talks $6.8 billion SACE guaranteed loan
  • Volvo signs EKN guaranteed US$1.1 billion credit facility

ECAs and emergency COVID-19 budgets

(ECA Watch, Ottawa, 30 May 2020) This month's news is dominated by vast amounts of export credit funding approved to shore up companies facing an international collapse of consumption, production and trade resulting from the world-wide COVID-19 pandemic. How much government support is going to companies vs unemployed workers is difficult to determine as the press tends to report overall corporate welfare budget estimates rather than overall support for workers. The debate on the shape of the future includes the use of continued ECA support for fossil fuels or preparation for the coming climate change crisis. Another element is the increase in short-term (< 2 years) ECA support, normally covered by commercial lenders, which has been mounted by many governments and is not subject to many of the environmental, corruption and social standards of ECAs subscribing to the OECD "Gentlemens' Agreement" designed to level the playing field of corporate subsidies to national exporters.




Covid-19 recovery will need US$5tn in trade credit capacity

(Global Trade Review, London, 28 May 2020) The International Chamber of Commerce (ICC) has warned that as much as US$2 to 5 trillion of trade credit will be needed to return trade volumes back to 2019 levels in the wake of the Covid-19 crisis in order to enable volumes and demand return to the global economy. The ICC has underlined the need to void pre-existing legal requirements for key trade documents to be presented in hard-copy paper format in order to get trade finance to where it is most needed. Regulatory treatment of trade finance is also in the ICC’s sights, with the recommendation that risk calculations be lowered despite the expected drop in trade volumes between 13% and 32% and an increase in defaults.

https://www.gtreview.com/news/global/icc-covid-19-recovery-will-need-us5tn-in-tr...


Will COVID-19 Spark a Paradigm Shift for Businesses?

(Global Trade Magazine, Dallas, 26 May 2020) Virginie Fauvel of Euler Hermes notes: As governments, leaders and industries around the globe grapple with the effects of the pandemic, one thing is certain: the fragility of businesses has been exposed... Will we see a paradigm shift in the way businesses transform their strategies and priorities? As we shift into a post-pandemic world, will the traditional drivers of a capitalist society (productivity, profit and growth) be re-evaluated by businesses? We’re already seeing younger generations less attracted to capitalist values... We’ve already seen governments, businesses and individuals come together to encourage solidarity and altruism... with business repurposing their products and services to help fight the pandemic and individuals stepping into action to shop for their neighbors and set up support systems all while celebrating those on the frontlines of healthcare and emergency services each night. Meanwhile, as the following article notes, Friends of the Earth and Oil Change International are saying: "As G20 governments prepare historic levels of public finance in response to COVID-19 we need them to break from the past and make sure this money goes to a just and sustainable recovery instead."

https://www.globaltrademag.com/will-covid-19-spark-a-paradigm-shift-for-business...


Why $77 Billion a Year in Public Finance for Oil, Gas, and Coal Is Even Worse Than It Sounds

(Friends of the Earch, Washington, 28 May 2020) Right after the mostly-rich and powerful G2O countries signed the Paris Agreement with the goal of limiting global warming to 1.5ºC, they went home and continued with the business-as-usual public finance policies that directly undermined this goal. The world’s largest commercial banks are financing almost US$700 billion a year for oil, gas, and coal, with US$77 billion coming from public finance for fossil fuels, of which US$40 billion comes from ECAs, vs only US$2.9 billion from ECAs for clean energy... The G20 export credit agencies (ECAs), development finance institutions (DFIs), and the multilateral development banks (MDBs) FOE was able to track in its new report are still only a small fraction of all public finance for energy. Worldwide, 693 public banks own assets worth $38 trillion, and there is an overall estimated $73 trillion in public finance assets when central banks, sovereign wealth funds, pensions, and multilateral banks are also included. This also does not include direct subsidies through fiscal and tax measures that governments provide — for the G20 this support for fossil fuels is estimated at $80 billion a year. But as G20 governments prepare historic levels of public finance in response to COVID-19 we need them to break from the past and make sure this money goes to a just and sustainable recovery. For example, Spain has (alongside other promising measures from a wealth tax to an end to any new licenses for oil and gas) mandated their State and public institutions to divest from any holdings in companies whose activities include the extraction, refining and processing of fossil fuels.

https://foe.org/why-77-billion-a-year-in-public-finance-for-oil-gas-and-coal-is-...


In the Face of COVID-19, Governments Have a Choice: Resilient Societies or Fossil Fuel Bailouts?

(Oil Change International, Washington, 22 April 2020) This briefing outlines why continuing to rely on fossil fuels, in particular oil and gas, is not compatible with long-term recovery. Governments now face a choice: fund a just transition away from fossil fuels that protects workers, communities, and the climate — or continue funding business-as-usual toward climate disaster. Even before the COVID-19 crisis, the fossil fuel industry was already showing signs of permanent decline and it has fostered growing inequalities in and between countries, and has destabilized the climate in a matter of decades. We know that there is enough embedded carbon in already operating oil, gas, and coal production to take us beyond 1.5ºC or even 2ºC, an increase in temperature which affects ecosystems and communities around the world, things we depend upon and value — water, energy, transportation, wildlife, agriculture, ecosystems, and human health, i.e. extreme weather disasters, food production, air quality, rising oceans, etc.

http://priceofoil.org/2020/04/22/covid19-dos-and-donts/


EDC is bailing out the fossil fuel industry. Will Canadians be given a full accounting of the costs?

(Above Ground, Ottawa, 4 May 2020) 2020 is a pivotal year for wealthy nations to ramp up their climate action plans, spelling out how they’ll make the deep emissions cuts needed between now and 2030. Instead, states are bolstering the very industries that must be phased out to avert disastrous climate breakdown, as high-carbon sectors push for government aid in response to the economic crisis. Canada’s oil and gas lobby has asked for a bailout of up to $30 billion. On April 17 Ottawa announced a package that includes new loans and guarantees to mid-sized oil and gas firms, to be delivered by Export Development Canada (EDC) and the Business Development Bank of Canada (BDC), as well as funding for clean-up of spent wells and loans for emissions reductions. It also indicated further credit support for the largest oil and gas companies is still being planned. Oil and gas companies also stand to benefit from the aid that Ottawa has made available across sectors, such as the 75% wage subsidy program and the $65 billion Business Credit Availability Program also from EDC and BDC. A broad base of Canadian academics and civil society advocates have argued that economic support measures should directly benefit workers, not companies, and they mustn’t delay the phaseout of an industry that’s fuelling the climate emergency, which already claims hundreds of thousands of lives each year. Observers have long called attention to the lack of transparency in EDC’s operations, with a recent Globe and Mail exposé reporting a “pattern of secrecy” and “lax supervision” of the agency by the federal government.

https://aboveground.ngo/ottawa-is-bailing-out-fossil-fuel-industry/


Coastal GasLink pipeline gets loan of up to $500M from Canada's EDC

(Toronto Star, Ottawa, 4 May 2020) EDC will lend between $250 and $500 million to build the Coastal GasLink, a natural gas pipeline that sparked a national protest movement and reckoning over the Liberal administration’s commitment to Indigenous reconciliation. The company building the 670-km pipeline, Calgary-based TC Energy, said in a statement to the Star that the deal includes a “syndicate of banks” that will fund the majority of the $6.6-billion project’s construction cost. The deal is entirely unwelcome to Na’Moks, a hereditary chief of the Wet’suwet’en nation in northern British Columbia. The Wet’suwe’ten opposition gained national prominence after RCMP arrests this winter triggered a huge solidarity movement that saw Mohawk demonstrators block rail lines in Ontario and Quebec and supporters stage rallies in cities across the country. Some elected band councils signed agreements to support the project but the Wet’suwe’ten traditional leadership has spearheaded opposition to the pipeline for years.

https://www.thestar.com/politics/federal/2020/05/04/coastal-gaslink-pipeline-get...


ECA aircraft Financing in a post-COVID-19 world

(Lexology, London, 30 April 2020) While businesses lobby governments for support, there have been suggestions that ECAs may need to step up to fill a reduced commercial debt capacity for aircraft. During the 2008-2009 global financial crisis, European ECAs financed up to a third of annual Airbus delivery output and the Export-Import Bank of the United States supported around 20% of Boeing deliveries. Given the ECAs’ unique roles in providing state supported finance, could the current crisis provide an opportunity for governments to affirm their commitment to promoting environmental, social and governance (“ESG”) accountability? Policy makers are no doubt acutely aware that as public attitudes to ESG issues have been changing, so too have the reputational risks of being on the ‘wrong’ side of the ESG debate increased. Most recently this has been borne out in the aviation industry by the rise of ‘flightshaming’ and the fall-out from the grounding of Boeing’s 737 Max and the scrutiny surrounding Boeing’s use of share buy-backs. The reputational impact of ESG issues has been an issue for UKEF as recently as March 2020, when UKEF was accused of breaching OECD guidelines governing multi-national organisations in its decision to fund fossil fuel projects overseas. NGO Global Witness lodged a complaint with the OECD alleging that UKEF failed to adequately consider climate-related risks. The complaint, which is the first of its kind against an ECA, will see UKEF enter a 'specific instance' review process mediated by the UK national contact point at the OECD, which cannot compel enterprises to develop climate risk strategies, but which can publicly state that OECD guidelines have been broken. In many countries, government financial aid packages have prompted heated public debate as to what businesses should be considered ‘worthy’ of government support.

https://www.lexology.com/library/detail.aspx?g=44821232-044a-4650-afff-4c544765b...


Lawyers warn continued gas lending will breach EIB legal duties

(Client Earth, London, 12 November 2019) As the European Investment Bank (EIB) Board of Directors prepares to vote on excluding natural gas from its lending policy, lawyers have issued a clear warning: continuing to finance fossil fuels would breach the Bank’s legal duties. [While facing a different regulatory regime, as ECA support for fossil fuels grows, might they face legal action?]

https://www.clientearth.org/press/continued-gas-lending-will-breach-legal-duties...


JBIC muddies comments on ending coal finance

(Reuters, Tokyo, 1 May 2020) Japan’s government, along with JBIC, has long been criticized for backing exports of coal-power technology and equipment by environmental groups as the world moves to cut emissions to combat climate change. However, JBIC Governor Tadashi Maeda was quoted as saying last week that the bank “will no longer accept loan applications for coal-fired power generation projects.” Nevertheless, Japan’s government-owned export credit agency said it has not changed its policy on financing coal power plants, muddying a message from the bank’s head that environmental groups had hailed as a major shift on the polluting fuel.

https://www.reuters.com/article/us-coal-japan-jbic-climatechange/jbic-muddies-co...


South Korean ECA backs $2 billion coal company bailout

The South Korean government is backing a $2 billion bailout of the country’s biggest coal plant manufacturer, despite promises to end coal financing. State-owned Korea Development Bank (KDB) and the Export-Import Bank of Korea, the country’s export credit agency, have agreed the package of emergency loans for Doosan Heavy Industries & Construction over the last month.

https://www.climatechangenews.com/2020/05/06/south-korean-government-backs-2-bil...


European Commission approves €903 million Belgian trade credit reinsurance scheme

(Europa, Brussels, 18 May 2020) The European Commission has approved, under EU State aid rules, a €903 million Belgian reinsurance scheme to support the trade credit insurance market in the context of the coronavirus outbreak. Trade credit insurance protects companies supplying goods and services against the risk of non-payment by their clients. Given the economic impact of the coronavirus outbreak, the risk of insurers not being willing to maintain their insurance coverage has become higher. The Belgian reinsurance scheme, with a total budget of €903 million, ensures that trade credit insurance continues to be available to all companies, avoiding the need for buyers of goods or services to pay in advance, therefore reducing their immediate liquidity needs.

https://ec.europa.eu/commission/presscorner/detail/en/MEX_20_900


Fiat Chrysler in talks for $6.8 billion SACE guaranteed loan

(Reuters, Milan, 15 May 2020)) Fiat Chrysler is in talks with Intesa Sanpaolo (ISP.MI) over a 6.3 billion euro ($6.8 billion) loan backed by Italian ECA SACE to help the automaker weather the coronavirus crisis. Fiat Chrysler (FCA) has gradually restarted its operations in Italy since the end of April. The crisis erased demand for new vehicles and pushed manufacturers to halt most production, burning cash. The loan, which is part of emergency liquidity measures the government is making available to Italy’s businesses, must be approved by Intesa Sanpaolo’s board, the source said. FCA, Intesa and SACE declined to comment. FCA and Peugeot owner PSA (PEUP.PA), which have struck a binding merger agreement to create the world’s fourth largest carmaker, earlier this week scrapped their planned ordinary dividends on 2019 results, worth 1.1 billion euros each, due to the COVID-19 pandemic. SACE approved state guarantees covering 80% of the bank loan after the loan was approved by Italy’s biggest retail bank Intesa Sanpaplo.

https://www.reuters.com/article/us-health-coronavirus-fca-loan-idUSKBN22R1YL


Volvo signs EKN guaranteed US$1.1 billion credit facility

(Automotive World, London, 20 May 2020) Volvo has signed a new 2-year US$1.1 B revolving credit facility with a 1-year extension option with a group of Nordic banks (DNB, Nordea, SEB and Swedbank (coordinator)) as well as a new 2-year US$424 M credit facility with a 1-year extension option with the Swedish Export Credit Corporation (SEK). Both facilities are partly guaranteed by the Swedish Export Credit Agency (EKN) as they utilize the new working capital credit guarantee set up as a response to the Covid-19 pandemic.

https://www.automotiveworld.com/news-releases/volvo-cars-signs-sek-10666m-revolv...


The Coal Policy Tool: A Tool for Quitting Coal

(Bank Track, Paris, 6 May 2020) Reclaim Finance has published the most accurate analysis tool ever released regarding policies adopted by French financial players in the coal sector. The aim is twofold: to facilitate the comparison between policies on the same public criteria and to allow clients, media and other stakeholders to assess the gap between existing practices and the objective of limiting global warming to 1.5°C. At the moment, only five French financial players have a robust coal phase-out policy. At least 40 French financial institutions, which belong to 25 financial groups, now have policies restricting their financial services to the thermal coal sector. These numbers are expected to increase following the commitment made in July 2019 by the Paris financial centre that all French financial players must adopt a coal phase-out policy by mid-2020.

https://mailchi.mp/banktrack/the-coal-policy-tool-a-tool-for-quitting-coal?e=a1e...


What's New April 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

  • Temporary EU State Aid Framework includes short term export credits
  • European ECAS expand protection to help mitigate the impact of the coronavirus
  • Temporary relaxation of EU state aid rules could counter foreign takeovers
  • Korean NCP accepts complaint against Korean ECA and others
  • ECAs play lip service to coal withdrawal but ignore oil & gas
  • Fossil fuel giants with ECA billions put Mozambique workers & communities at risk of COVID-19
  • EXIM Bank Relief Measures in Response to COVID-19
  • Export Finance Australia helping exporters unable to get finance because of COVID-19
  • Canada's EDC will backstop bank energy loans
  • Snubbed by EXIM, Cruise Lines Get ECA Relief From Europe
  • EXIM withdraws support for medical equipment exports against World Bank advice
  • Could ECAs help Africa mitigate Covid-19 pushed recession?
  • Insurers bulked up on airline risk as export credit agencies pulled out
  • Time for a European public export credit insurance programme?

Temporary EU State Aid Framework includes short term export credits

(Mondaq, London, 6 April 2020) On 19 March 2020, the European Commission adopted a Temporary Framework to enable EU Member States to use European State aid rules to support the European economy in the COVID-19 crisis. The first programs have already been approved in Denmark, Germany, France, Italy and Portugal. The Temporary Framework, based on Article 107(3)(b) of the of the Treaty on the Functioning of the European Union (TFEU), recognizes that the entire EU economy is experiencing a serious disturbance. To remedy that, the Temporary Framework provides five types of aid that can be granted by EU Member States ranging from direct grants, subsidized and/or state guaranteed loans and short term export credits. Given the limited size of the EU budget, the main response will come from Member States' national budgets. The Temporary Framework will help target support to the economy, while limiting negative consequences to level the playing field in the Single Market.

https://www.mondaq.com/Coronavirus-Covid-19/911922/EU-Commission-Adopts-Emergenc...


European ECAS expand protection to help mitigate the impact of the coronavirus

(Reuters, London, 3 April 2020) Britain's UKEF  is expanding the scope of its export insurance policy to cover exporters against the risk of non-payment if customers become insolvent, Other European states [although the UK is no longer a member of the EU] are also giving guarantees to credit insurers in an effort to keep coronavirus-hit companies afloat, as some cut cover for trade involving bloc members such as Italy and Spain, UK Export Finance, a government department, on Friday said it has expanded the policy to cover transactions with the European Union, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States. In Spain, as part of a package of measures approved on March 18 to help mitigate the impact of the coronavirus, the government increased the insurance cover provided by its export credit agency CESCE adding two 1 billion euro credit lines, for unlisted corporates and small businesses with large levels of exports.  In France, the finance ministry said credit insurers had vowed not to cut or curtail cover in return for a reinsurance backstop worth up to 10 billion euros ($10.8 billion), to be set up by the end of the week. It also announced 2 billion euros in short-term aid as part of a package to help French exporters with credit insurance. In Germany, Reuters reported this week that the government and the country’s credit insurance industry have agreed to help to maintain insurance cover for trade, with the government guaranteeing up to 30 billion euros for the commercial credit insurance industry.

https://www.reuters.com/article/us-health-coronavirus-britain-exports/uk-export-...


Temporary relaxation of EU state aid rules could counter foreign takeovers

(The Asset, 22 April 2020) European Union rules on state aid to private sector companies, including short term export credits, have been suspended until December as national governments step up financial packages to rescue their corporations. A recent report notes that the Covid-19 crisis has come at a time when the EU was already putting in place rules that bring foreign takeovers under tighter control. These takeover rules provide a framework for EU member states to screen foreign direct investments into the EU, on the grounds of security or public order. With many companies across the EU going into administration, foreign buyers are looking to acquire assets at bargain prices. Politicians in both the UK and Germany have already identified Chinese investors as being at the forefront.  A deal agreed by Turkey and China last month was largely overshadowed by news that the coronavirus could lead to Chinese firms taking much bigger stakes in Turkish companies struggling to cope with the fallout from the pandemic.

https://www.theasset.com/europe/40218/temporary-relaxation-of-state-aid-rules-co...


Korean NCP accepts complaint against Korean ECA and others

(OECD Watch, Amsterdam, 8 April 2020) On 17 March 2020, the Korean National Contact Ppoint accepted a complaint against KEXIM, the export credit agency (ECA) of South Korea, for financial support of harmful palm oil production practices in Indonesia. This is a significant step, as it is the second time an NCP has deemed an ECA a multinational enterprise (MNE) covered under the broad definition of MNEs in the OECD Guidelines. The complaint alleges that KEXIM and the NPS had failed to implement adequate human rights and environmental due diligence to address the adverse risks and impacts of their financial services.

https://www.oecdwatch.org/2020/04/08/korean-ncp-accepts-complaint-against-korean...


ECAs play lip service to coal withdrawal but ignore oil & gas

(CIS University of Zurich, 2 April 2020) ECAs  are  a  hitherto  under-researched  contributor  to  lock-in  of  fossil  fuel  infrastructure.  This  study  reviews  external policies  and  standards  as  well  as  internal  policies  and  commitments  that  may  affect  ECAs’  portfolios –  specifically  their  support  to  fossil  fuel  and  low-carbon  technology  projects.  Most international standards are applied on a purely voluntary basis. Moreover, they are mainly focused on increasing transparency and promoting social and environmental safeguards while not directly affecting the ECAs’ portfolios. Most importantly, none of them has explicit requirements to phase out support to fossil fuels and align operations with the Paris Agreement. The standards thus do not support fossil fuel project support phaseout.

https://ethz.ch/content/dam/ethz/special-interest/gess/cis/cis-dam/CIS_2020/Work...


Fossil fuel giants with ECA billions put Mozambique workers & communities at risk of COVID-19

(FOE USA, Washington, 20 April 2020) The COVID-19 pandemic has forced large portions of the population to stay home and left millions out of work. Farmworkers, grocery workers, medical professionals, and other frontline workers are forced to put themselves at risk in order to provide everyone with the food and healthcare needed to make it through this pandemic. Ensuring that these frontline workers are safe and have the resources they need is of the highest priority. Yet, in northern Mozambique, companies like Total – the French energy giant – are attempting to put their profits above the protection of their workers. Reportedly, Total, which recently acquired oil and gas reserves that were formerly owned by the U.S. company Anadarko – a company that received $5 billion from the U.S. Export-Import Bank (EXIM) last September, at first refused to halt or even slow its work in northern Mozambique. They lost precious time and failed to take early action that would have stopped an increase in the number of cases.

https://foreignpolicynews.org/2020/04/20/fossil-fuel-giants-put-workers-and-comm...


EXIM Bank Relief Measures in Response to COVID-19

(JD Supra LLC, Sausalito, 13 April 2020) In response to the economic slowdown caused by the COVID-19 pandemic, the Export–Import Bank of the United States (“EXIM Bank”), the official export credit agency of the United States, has adopted four measures to help U.S. exporters and their suppliers and overseas buyers of U.S. goods and services get access to cash to support their transactions:

  1. Established a temporary Bridge Finance Program to help foreign customers of U.S. exporters get short-term financing for purchases of U.S. goods and services;
  2. Temporarily expanded the Pre-Export Payment Policy into a new Pre-Delivery/Pre-Export Financing Program to help foreign buyers finance progress payments owed to U.S. manufacturers during the manufacturing process;
  3. Broadened the Working Capital Guarantee Program by expanding the categories of assets that exporters can include in their baseline for purposes of determining borrowing level eligibility;
  4.  Increased access to Supply Chain Financing Guarantee Program by relaxing two conditions on eligibility.
https://www.jdsupra.com/legalnews/exim-bank-relief-measures-in-response-79414/


Export Finance Australia helping exporters unable to get finance because of COVID-19

(American Reporter, Boston, 26 April 2020) COVID-19 has drastically affected the economy. Exporters and Importers are unable to conduct business because of the transport restrictions. Australia’s export credit agency (ECA), Export Finance Australia has come ahead to help the exporters. It revealed that it has a new A$500mn capital facility available to exporters. This capital will ease the dire financial conditions of the export companies. ECA mentioned that export companies would be able to get finance of the amount of A$250,000 to A$50mn under the scheme. But the scheme will only apply to companies that were established and previously successful.

https://www.theamericanreporter.com/australian-eca-is-helping-exporters-who-are-...


Canada's EDC will backstop bank energy loans

(Reuters, Toronto, 22 April 2020) Canada’s export credit agency will backstop loans to hard hit oil and gas producers, a document seen by Reuters showed, in the latest move by Ottawa to free up credit for the struggling energy industry. The relief comes as banks review borrowing limits in the sector and could head off bankruptcies of small and mid-sized energy firms pummeled by the collapse in oil prices. Canadian banks have eased some lending standards but are expected to chop credit lines as they recalculate energy companies’ borrowing bases to account for a 75% drop in U.S. oil prices since the start of the year. The program is targeted at Canadian firms with production no greater than 100,000 barrels of oil equivalent per day, according to the presentation. In addition, Canada has approved $1.72 billion for cleaning up orphaned or inactive wells in three provinces in western Canada as the federal government tries to help the struggling O&G industry. Last spring, the grass-roots Alberta Liability Disclosure Project estimated that there are 300,000 abandoned wells in the province that could cost $70 billion to remediate.

https://www.reuters.com/article/canada-oil-credit/canadas-export-agency-will-bac...


Snubbed by EXIM, Cruise Lines Get ECA Relief From Europe

(Bloomberg, Miami, 24 April 2020) After missing out on U.S. emergency aid, Norwegian Cruise Line Holdings Ltd. and Royal Caribbean Cruises Ltd. are benefiting from a debt-holiday initiative by Germany’s export credit agency, Euler Hermes Aktiengesellschaft. The coronavirus pandemic has hammered the cruise industry, which shuttered operations in mid-March after a series of outbreaks at sea. The companies have been raising money and cutting expenses to weather a period without customers. The biggest companies were left out of the U.S. rescue package because they aren’t incorporated stateside. Most of the cruise industry is incorporated in places where companies can avoid U.S. income taxes and minimum wage requirements. Norwegian said the 12-month debt holiday -- which applies to debt used to finance ships -- will provide about $386 million in additional liquidity through April 2021. Royal Caribbean said it will add $250 million through debt holiday agreements with Euler. In addition, the national governments of France, Finland, Italy, Norway and Germany have agreed that cruise shipping companies could apply to suspend the repayment of their debts financed by state export credit guarantees for one year.

https://www.bloomberg.com/news/articles/2020-04-24/snubbed-in-u-s-rescue-cruise-...


EXIM withdraws support for medical equipment exports against World Bank advice

(Global Trade Review, London, 24 April 2020) Countries across the world are imposing bans or restricting the export of medical goods. The Global Trade Alert team at Switzerland’s University of St Gallen reports that 75 countries have now introduced export curbs on medical supplies. The US Export-Import Bank (US Exim) has revealed that it is temporarily withdrawing all financing support for exports of critical medical equipment and supplies, including respirators, face shields, gloves and other protective equipment. The exclusion order, which will remain in place until September 30, was unanimously approved by the US export credit agency’s board of directors. While countries impose bans on medical exports amid the Covid-19 pandemic, World Bank president David Malpass has urged leaders against hoarding medical and food supplies, and not to use shortages as a reason to step up protectionist measures.

https://www.gtreview.com/news/global/world-bank-urges-against-export-bans-amid-c...


Could ECAs help Africa mitigate Covid-19 pushed recession?

(Global Trade Review, London, 15 April 2020) The outbreak of Covid-19 has left Africa facing the prospect of its first recession in 25 years, with countries dependent on oil exports or struggling with political instability on the frontline. Significant efforts to keep African trade moving have already been undertaken by export credit agencies (ECAs) active on the continent, as well as by global organisations such as the International Monetary Fund and the World Bank. But for Angelica Adamski, director of the board at the Sweden-Africa Chamber of Commerce, there are other steps that ECAs in particular could consider taking to bring some relief to African exporters. For instance, she suggested more ECAs should consider extending coverage to short-term credit and trade receivables. "Some ECAs are already covering working capital programmes, but we need to put more emphasis on this” she noted.

https://www.gtreview.com/news/africa/covid-19-pandemic-pushes-africa-towards-rec...


Insurers bulked up on airline risk as export credit agencies pulled out

(Global Capital, London, 2 April 2020) Private sector insurance companies have written extensive guarantees for the purchase of new aircraft from Boeing and Airbus in the past two years, filling a gap in the market left by the retreat of US Eximbank and European export credit agencies. But with aircraft around the world grounded and airlines slashing capital expenditure, these insurance firms could be stuck with the risk. The Airbus CEO told employees last week that the company’s survival was in question without immediate action and told RTL Radio that there was a need for export financing support. Export credit agencies played a key role in keeping deliveries moving during the 2009 financial crisis, but their role has since diminished. European nations withdrew their support during most of a four-year corruption investigation culminating in a record 3.6-billion-euro fine against Airbus in January.

https://www.globalcapital.com/article/b1l0ws846l2cfj/insurers-bulked-up-on-airli...


Time for a European public export credit insurance programme?

(Euroactive Foundation, Brussels, 16 April 2020) [An argument for European coordination of export credit. To bolster competition from China?] Over the last decade, public export credit insurance has become one of the major instruments of trade policy, used to support and encourage exports. According to the figures of Berne Union members, public credit insurance covered more than one trillion US dollars in new transactions in 2018, writes Matija Vodoplav, a French PhD student. Despite the strong public support that exporters from some countries have, in particular in East Asia, European exporters do not benefit from support at the EU level and are facing a mosaic of national public export credit insurance programmes. [He believes] that policymakers should examine the possibility of establishing a European public export credit insurance programmes that could provide risk cover, in addition to national programmes, for extra-EU exports from all member states. The OECD estimates that in one decade its support surged from USD 3 billion in 2002 to USD 397 billion in 2013. The US ECA estimates that in 2018, the largest providers of public export credit insurance for the short-term export transactions to OECD and non-OECD countries, after China, were Korea, Japan, Canada, India and Russia, while Germany, the largest EU economy, came in sixth. Export credit has also been one of the pillars of China’s Belt and Road initiative where, according to official figures found on the Sinosure’s website, by the end of 2017, the total insured amount granted by Sinosure for projects related to the initiative was almost $510 billion.

https://www.euractiv.com/section/economy-jobs/opinion/time-for-a-european-public...


What's New March 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

  • EU G20 and OECD Member Countries Announce Trillion$ in subsidies, including ECA $$
  • EU approves emergency state-aid ECA measures
  • UK proposes UKEF loan fund to spur defence & post-Brexit exports
  • Global Banks Funneled $2.7 Trillion into Fossil Fuels Since Paris Climate Agreement
  • ECAs Backing Coal as Some of the World's Biggest Banks Get Out
  • UK Export Finance accused of failing to consider climate risks
  • EU unveils industrial strategy to help meet climate goals
  • India Seeks to Win Investment Amid Ongoing China-US Trade War, Coronavirus Outbreak
  • Canada challenged to ensure EDC COVID-19 aid won't bail out 'high-polluting industries'
  • Canada: Stop EDC investing in environmental and human rights harm
  • Airbus, Boeing Make Production Decisions Amid COVID-19 Pandemic
  • Uganda rallies regional states to rethink expensive ECA debt
  • Why a Brazilian builder wants UKEF money for work in Africa

EU G20 and OECD Member Countries Announce Trillion$ in subsidies, including ECA $$

(ECA Watch, Ottawa, 30 March 2020) Our "export credit" online alerts this month are flooded with news of coronavirus pandemic generated government subsidies for business (and some for workers), including special export credit increases. Here are but a few links by country: Canada, China, Finland, Germany, India, Ireland, Japan, Luxembourg, New Zealand, Norway, Spain, Sweden, Trinidad, Turkey, UKEF, USA. The measures notified by EU Member States and the UK that have been approved by the EC are outlined at this link.




EU approves emergency state-aid ECA measures

(National Law Review, Western Springs IL, 26 March 2020) On 19 March 2020, the European Commission adopted a temporary framework for State aid to support the economy amidst the consequences of the Coronavirus (COVID-19) outbreak. The temporary framework provides for five types of aid, including aid in the form of short-term export credit insurance, as a temporary EU Treaty measure allowing for state aid “to remedy a serious disturbance in the economy of a Member State.” [This move highlights a possible tension within the European community wherein the European Commission is promoting a European Green Deal while the European Council Export Credits Group works with the OECD Export Credit Working Group to promote and protect European corporations, including support for substantial fossil fuel projects. Will short-term export credits for the energy sector be allocated on the basis of a green Europe or the existing fossil fuel dependency? Or will they be used just to shore-up national businesses distressed by the COVID-19 pandemic?]

https://www.natlawreview.com/article/european-commission-adopts-temporary-framew...


UK proposes UKEF loan fund to spur defence & post-Brexit exports

(Jane's, London, 11 March 2020) The UK government is proposing to create a GBP1 billion (USD1.3 billion) fund to support British defence and security exports. The “facility” would be overseen by UK Export Finance, the country’s export credit agency, which gives loans to help foreign countries, especially those with developing economies, buy British goods and services. The proposed fund is included in the 2020 budget that Chancellor of the Exchequer Rishi Sunak presented to Parliament on 11 March. The budget also proposes a GBP100 million (USD128 million) increase for defence research and development to “develop capabilities in response to threats facing the UK, including funding for cutting-edge technology in aviation and space propulsion.” In addition, The Chancellor is preparing to boost post-Brexit exports for UK businesses by making £5 billion of loans available to UKEF in his forthcoming Budget. The Treasury said the money would help UK exporters to increase their global sales as Britain prepares for life outside the European Union, with the Chancellor helping to top up the purchasing power of those abroad by providing a competitive loan rate through UKEF.

https://www.janes.com/article/94837/uk-proposes-loan-fund-to-spur-defence-export...


Global Banks Funneled $2.7 Trillion into Fossil Fuels Since Paris Climate Agreement

(Bank Track, Nijemgen, 20 March 2020) The latest version of the most comprehensive report on global banks' fossil fuel financing, Banking on Climate Change 2020, was released today, revealing that 35 global banks have not only been sustaining but expanding the fossil fuel sector with more than $2.7 trillion in the four years since the Paris Climate Agreement. The report finds that financial support for the fossil fuel industry has increased every year since the Paris Agreement was adopted in December 2015.

https://mailchi.mp/banktrack/new-report-reveals-global-banks-funneled-27-trillio...


ECAs Backing Coal as Some of the World's Biggest Banks Get Out

(Bloomberg, 8 March 2020) Moves by some of the world’s biggest banks to end coal financing for the sake of the planet was supposed to create major headaches for companies like Whitehaven Coal Ltd. Yet there was the Australian miner on a conference call last month announcing the refinancing and extension of a A$1 billion ($650 million) credit line, backed mostly by Chinese and Japanese lenders. The Export-Import Bank of China and the Japan Bank for International Cooperation lead firms that have committed $29 billion for new coal power projects in Vietnam and Indonesia alone.

https://finance.yahoo.com/news/death-coal-financing-exaggerated-china-163000714....


UK Export Finance accused of failing to consider climate risks

(Business Green, London, 17 March 2020) The UK's export credit agency was today accused of breaching OECD guidelines governing multinational organisations, with campaigners accusing the government of "rank hypocrisy". NGO Global Witness has lodged a complaint with the Paris-based OECD, which provides guidelines for how industrialised economies should respond to the climate crisis. The complaint alleges that UKEF has breached guidelines for multinational enterprises by failing to adequately consider climate-related risks and report on its greenhouse gas emissions. It also alleges that the agency has no targets to reduce emissions. The OECD cannot compel enterprises to develop a climate risk strategy, but it can publicly state that its guidelines have been broken. The complaint, which is the first of its kind to be levelled against an export credit agency, will see UKEF enter into an arbitration process mediated by the OECD.

https://www.businessgreen.com/news/4012565/climate-hypocrites-uk-export-finance-...


EU unveils industrial strategy to help meet climate goals

(ReNews, Winchester, 10 March 2020) The European Commission has presented a new Industrial Strategy to help Europe achieve its goal of climate neutrality by 2050, while maintaining European industry's global competitiveness. These include comprehensive measures to modernise and decarbonise energy-intensive industries, support sustainable and smart mobility, promote energy efficiency, strengthen current carbon leakage tools and secure a “sufficient and constant” supply of low-carbon energy at competitive prices. “This includes developing a European export strategy for renewables that looks not only at third country market access but also at how national export credit agencies can support the European industry in the face of State-financed Chinese competition.

https://renews.biz/59045/eu-unveils-industrial-strategy-to-meet-climate-goals/


India Seeks to Win Investment Amid Ongoing China-US Trade War, Coronavirus Outbreak

(Sputnik, Moscow/New Delhi 3 March 2020) The US and China are still engaged in a trade dispute, and the spread of the coronavirus makes a deal less likely, at least in the short-term. The Indian Finance Ministry has revealed that amid the US-China trade war, its exports to the two countries have not only increased but it is also looking forward to enlarging its China Plus-One Strategy. Claiming that trade tensions between China and the US contributed to the decline of world output and trade, the ministry said that India recorded $44.8 million in exports to the USA and $14.6 million to China in 2019. The US-China trade war began in 2018 after US President Donald Trump accused China of unfair trade practices and imposed tariffs on more than $360 billion of imports. China accused the US of trying to stop it from emerging as a global power and retaliated with tariffs of $110 billion on US products. Amid the tensions, the Indian government has granted relief measures to exporters including lower duties and taxes on exported products, a special scheme for higher export credit disbursement and a fast clearance window to boost trade. India has recorded an increase in exports with the US despite higher tariffs and the end to the Generalised System of Preferences, an import subsidy facility, which assisted Indian exports to the tune of $5.6 billion.

https://sputniknews.com/india/202003031078462229-india-seeks-to-win-investment-a...


Canada challenged to ensure EDC COVID-19 aid won't bail out 'high-polluting industries'

(National Observer, Ottawa, 25 March 2020) Environmental groups praised political parties for coming together to help Canadians battle the effects of the coronavirus. They also argued that the new law’s broadening of Export Development Canada (EDC)’s mandate will make it easier to direct more public money to oil and gas companies without sufficient oversight.

https://www.nationalobserver.com/2020/03/25/news/morneau-challenged-ensure-covid...


Canada: Stop EDC investing in environmental and human rights harm

(Amnesty International, Ottawa, 14 March 2020) In 2016, Export Development Canada - a crown corporation that claims its transactions are “environmentally and socially responsible” - approved millions of dollars in loans to Empresas Públicas de Medellin, the company building the HidroItuango dam. The Hidroituango dam cuts across the Cauca River in a region of Colombia hard hit by decades of armed conflict and grave human rights violations. The financing was approved despite warnings by experts, human rights organizations and local communities. Ríos Vivos, a grassroots movement of families dependent on the Cauca River for their food and livelihoods, has courageously denounced social and environmental impacts of the dam. They’ve also reported forced evictions, increased militarization and worsening violence, including the killing of six of their leaders.

https://takeaction.amnesty.ca/page/57662/action/1?utm_medium=email&utm_source=en...


Airbus, Boeing Make Production Decisions Amid COVID-19 Pandemic

(Aviation Today, Rockville MD, 24 March 2020) Airbus partially resumed assembly and production work in France and Spain on March 23, while Boeing will temporarily suspend the majority of its U.S.-based airplane production activity beginning March 25 as the two commercial aerospace giants continue working to keep their businesses running amid the COVID-19 coronavirus outbreak. “We’re advocating support of governments for the complete ecosystem across the industry, for our suppliers and customers, for example, through the use of export credit." Airbus CEO Guillaume Faury noted. [One wonders how the global spread of COVID-19 via many of their aircraft may affect their plans!]

https://www.aviationtoday.com/2020/03/24/airbus-boeing-make-production-decisions...


Uganda rallies regional states to rethink expensive ECA debt

(Daily Monitor, Kampala, 24 February 2020) Maris Wanyera, the Ministry of Finance acting director for debt and cash policy management, said on Friday the conference, to be attended by delegates from 16 countries, under the theme “sustainable public debt management and a strengthened economic growth” is long overdue in light of the ongoing borrowing frenzy by African countries to finance their development agenda. Some of the conditions, she says, are high insurance premiums tied to especially loans by export credit agencies, tying of loans to particular suppliers usually from the source countries which constrain local capacity, and in others waiving sovereign immunity over all assets of the borrowing states.

https://www.monitor.co.ug/Business/Finance/Uganda-rallies-regional-states-to-ret...


Why a Brazilian builder wants UKEF money for work in Africa

(Construction News, London, 3 March 2020) UK financing of foreign projects designed to boost British supply chain involvement is booming. Ghana’s Kejetia open-air market is the largest in West Africa and is also a health and safety nightmare. Ghana decided to create a more modern facility and approached a Brazilian builder established in the region to design and build a multi-storey covered market to replace Kejetia. The second phase of the programme – a 160,000 m2 building – is guaranteed to feature work from British subcontractors. It could, for example, include Scottish steel and be illuminated by lights created in London. Why? Because UK Export Finance, the government’s export credit agency, has provided a £70m loan to help the Ghanaian government finance the project, costing up to $700m (£543m). UKEF funding decisions are not without criticism. Their financing of projects led by companies with minimal presence in the UK has raised questions about whether British businesses are benefiting as much as they are supposed to and last year a select committee of MPs began scrutinising some of the deals by UKEF as part of an inquiry into the organisation’s financing of fossil-fuel projects.

https://www.constructionnews.co.uk/international/why-a-brazilian-builder-wants-u...


What's New February 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

  • EDC considering support for controversial pipeline project
  • German gov't provides US$23 billion in export credit guarantees in 2019
  • ICIEC Insured $10.86bn Worth of Businesses In OIC Countries In 2019
  • EKN: On exporting Sweden’s fossil free energy future
  • G20 ECAs fund $30 bn a year in fossil fuels $30 bn under the radar
  • World Bank: Some development banks and ECAs contributing to debt problems
  • Quarantined Cruise Liners Pose Hidden Risk to Finnish ECA and Economy
  • Italy earmarks 350 mn euros for SACE fund to help coronavirus-hit firms
  • EDC review of Bombardier bribery compliance policies nears completion
  • Airbus bribery scandal triggers new probes worldwide
  • Bpifrance launchs multi-billion euro fund to support French firms
  • Tanzania Railway gets US$1.46b ECA backed financing
  • Euler Hermes supports attractive investment opportunities in Egypt

EDC considering support for controversial pipeline project

(350.org, New York, 24 February 2020) As thousands across Canada take to the streets in solidarity with indigenous Wet’suwet’en land defenders and hereditary chiefs, Export Development Canada (EDC) is considering handing over millions of dollars in public money to the very pipeline project that sparked this resistance. EDC has a track record of financing projects that violate Indigenous rights and disregard climate science. In 2018, they were essential to the federal government’s controversial buy-out of the TMX pipeline. Now, they could be committing an undisclosed amount of money to the Coastal GasLink Pipeline as early as February 26th.

https://350.org/no-public-money-for-the-coastal-gaslink-pipeline/?akid=114458.97...


German gov't provides US$23 billion in export credit guarantees in 2019

(Xinhua, Berlin, 17 February 2020) The German government provided some 21 billion euros (US$23 billion) in export credit guarantees for German exporters and banks in 2019, the Ministry for Economic Affairs and Energy (BMWi) announced on Monday. The figure marked an increase of 6 percent over the previous year, according to the ministry. Because of "continuing political and economic uncertainties in important international markets, demand for federal export credit guarantees remains high," the BMWi noted. In addition to numerous transactions by small and medium-sized enterprises last year, the German government continued to "cover large-volume transactions, especially in the shipping sector." The government also offered 3.3 billion euros of investment guarantees for German companies' projects overseas last year, according to the BMWi. Compared to the previous year, the investment guarantees had almost tripled, according to the BMWi.

http://www.xinhuanet.com/english/2020-02/18/c_138792862.htm


ICIEC Insured $10.86bn Worth of Businesses In OIC Countries In 2019

(ProShare, Lagos, 17 February 2020) The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) insured businesses globally to the tune of $10.86bn in 2019. The coverage was part of the report of the ICIEC reviewing its performance and activities for 2019. It translated to a 20.31% increase from 2018, which gulped total business insurance of $9.03bn. The majority of businesses insured in 2019 concentrated on two core regions: The Middle East and North Africa and also Sub-Saharan Africa and Europe. In terms of the impact made in 2019, the distribution by region showed that the Middleast and North Africa, MENA emerged the highest with 54.39%, while Sub-Saharan Africa came second with 42.34% and Asia with 3.28%. ICIEC Businesses Insured by Region in 2019 include Asia 3.28%, Middle East and North Africa: 54.39% and Sub-Saharan Africa 42.34%. Across all 3 regions, energy and manufacturing led the areas supported by ICIEC. Business insured in the energy sector totalled $5.5bn million, while in the manufacturing sector, the figure stood at $2.7bn. Organization of Islamic Cooperation country distributions were: Turkey-14.94%, Algeria -10.53%, UAE-10.18%, Jordan-8.9%, Kingdom of Saudi Arabia-6.18%, Egypt-3.38% and Lebanon-2.88%. ICIEC took part in the 2019 London Sukuk Summit, engaging with leading industry experts and institutions from across the world.

https://www.proshareng.com/news/Islamic%20Finance/ICIEC-Insured-$10.86bn-Worth-o...


EKN: On exporting Sweden’s fossil free energy future

(TFX, London, 12 February 2020) EKN's director general Anna-Karin Jatko set the tone for the Swedish export credit agency’s seminar in Stockholm on 9 February noting Swedish industry’s impressive ability to transform itself. Two companies, Siemens Industrial Turbomachinery and state-owned mining and mineral group LKAB, are among those doing transformative things in Sweden such as fossil-free steel products. Their exports have been covered by EKN for more than 80 years. The goal set by the Swedish government to be the “first fossil-free welfare society in the world” is an ambitious one, but Ibrahim Baylan, Sweden’s Minister for Business, Industry and Innovation is bullish. “It’s a huge challenge, but there are opportunities if it’s done in the right way,” he told the domestic and international banks and exporters, pointing out that the transition won’t be financed and delivered by the government of the country, whose population is only around 10 million, on its own.

https://www.txfnews.com/News/Article/6923/EKN-On-exporting-Swedens-fossil-free-e...


G20 ECAs fund $30 bn a year in fossil fuels $30 bn under the radar

(Space Daily / AFP, Paris, 30 January 2020) Rich nations are funnelling cash through government-backed financial institutions to provide $30 billion to fossil fuel projects each year that "run counter to the Paris Agreement", a new analysis showed Thursday. The export credit agencies (ECAs) of G20 countries currently provide more than 10 times more state-backed finance to oil, gas and coal projects abroad than they do to renewable energy schemes, the analysis said. That translates to $7.1 billion annually in the years since the signing of the landmark accord that enjoins nations to slash carbon emissions. The analysis singled out China, Japan, South Korea and Canada as among the worst offenders, accounting for 78 percent of G20 fossil fuel support from 2016-2018. UK ECA Export Finance, has not funded a coal-fired power plant since 2002, but a separate analysis showed it is financing millions of tonnes worth of overseas emissions through continued oil and gas funding.

https://www.spacedaily.com/afp/200130040116.014rcutz.html


World Bank: Some development banks and ECAs contributing to debt problems

(Reuters, Washington, 11 February 2020) World Bank President David Malpass on Monday chided other development banks for lending too quickly to heavily indebted countries, saying that some of them were helping worsen already-challenging debt situations. Malpass said at a World Bank-IMF debt forum in Washington that the Asian Development Bank, the African Development Bank, and the European Bank for Reconstruction and Development were contributing to debt problems. “We have a situation where other international financial institutions and to some extent development finance institutions as a whole, certainly the official export credit agencies, have a tendency to lend too quickly and to add to the debt problem of the countries,” Malpass said. In an interview, Malpass cited liens against Angola's oil revenues associated with Chinese debt that were hidden by non-disclosure agreements, convenient for politicians and contractors.

https://www.thehindubusinessline.com/news/world/world-bank-chief-some-developmen...


Quarantined Cruise Liners Pose Hidden Risk to Finnish ECA and Economy

(Bloomberg, Helsinki, 12 February 2020) The damage wrought by the coronavirus on the luxury cruise-liner business may hurt the economy of Finland more than most other countries’. The Finnish government has granted an “exceptionally high” number of export guarantees to cruise lines that have ordered luxury vessels from the Nordic country’s shipyards. So it’s more vulnerable than most to a slump in demand. The bulk of the guarantees involves just one industry and, because they exist outside the government budget, they’re largely excluded when calculating the state’s liabilities. But Finnish taxpayers are ultimately on the hook for as much as 11 billion euros ($12 billion) of credit risk stemming from these guarantees. Finnvera Oyj, the country’s export credit company, has guaranteed loans for Royal Caribbean Cruises Ltd. and Carnival Corp.

https://www.bloombergquint.com/onweb/quarantined-cruise-liners-pose-hidden-risk-...


Italy earmarks 350 mn euros for SACE fund to help coronavirus-hit firms

(IANS/AKI, Rome, 26 February 2020) The Italian government is making a total 650 million euros available to help Italian companies weather the coronavirus emergency, Foreign Minister Luigi Di Maio said on Wednesday. "Italy''s foreign trade institute (Ice) is making available 300 million euros for our companies and we will hold joint discussions on the best way to tackle this moment," Di Maio wrote on Facebook. A further 350 million euros will be set aside for Sace-Simest, Di Maio added, referring to a company that belongs to state lender Cassa depositi e prestiti and which is 76 per cent controlled by Italy''s export credit agency Sace. Economists have warned the disruption caused by the coronavirus outbreak whose epicentre is in the wealthy, industrial north of the country may tip Italy back into another recession - its fourth since 2008.

https://www.outlookindia.com/newsscroll/italy-earmarks-650-mn-euros-to-help-coro...


EDC review of Bombardier bribery compliance policies nears completion

(Compliance Week, Boston, 18 February 2020) Export Development Canada (EDC) announced it has completed its independent review of Bombardier’s compliance policies and procedures, concluding there is progress in its ethics and compliance program. EDC initiated the review of Bombardier in 2019 following leaked findings from the World Bank’s investigations into Bombardier’s 2013 contract with Azerbaijan Railways. As Compliance Week previously reported, a March 2017 report by investigative centers and media outlets around the globe alleged Bombardier paid “millions of dollars in bribes to unidentified Azerbaijani officials through a shadowy company registered in the United Kingdom.

https://www.complianceweek.com/ethics-and-codes/bombardiers-compliance-program-p...


Airbus bribery scandal triggers new probes worldwide

(Reuters, Paris, 3 February 2020) Fallout from the Airbus bribery scandal reverberated around the world on Monday as the head of one of its top buyers temporarily stood down and investigations were launched in countries aggrieved at being dragged into the increasingly political row. Prosecution documents agreed by Airbus detailed a global network of agents or middlemen in transactions across the group's business and run from a cell in Paris where the group had part of its headquarters, split between France and Germany. Outlines of the operation and its annual budget of 250 million to 300 million euros had been reported by Reuters. fter Britain's Special Fraud Office reported that Airbus had hired the wife of a Sri Lankan Airlines executive as its intermediary in connection with aircraft negotiations, Airbus misled UK export credit agency UKEF over her name and gender, while paying her company $2 million the SFO said. Payments to "agents" in Nigeria, Korea, Taiwan, Colombia, Sri Lanka, Ghana and Malasia are being investigated.

https://finance.yahoo.com/news/airbus-bribery-scandal-triggers-probes-205521977....


Bpifrance launchs multi-billion euro fund to support French firms

(Reuters, Paris, 30 January 2020) French public investment bank Bpifrance has raised several billion euros from private and sovereign investors for a new fund that can be used to fend off activist investors targeting French companies. The new fund would give extra financial firepower to Bpifrance, which already manages a 15 billion euro portfolio of state shareholdings. In addition to managing French state shareholdings, Bpifrance's main business lines also include offering guarantees for banks' business loans and export credit insurance. In addition, Bpifrance has signed up to the Poseidon Principles to become the 17th signatory with a collective aim to limit carbon emissions from ships.

https://wkzo.com/news/articles/2020/jan/30/french-state-lender-to-launch-multi-b...


Tanzania Railway gets US$1.46b ECA backed financing

(East Africa Business Week, Kampala, 14 February 2020) Tanzania's Ministry of Finance has signed a facility agreement with Standard Chartered (SC.com) Tanzania for a US$ 1.46 billion loan to fund the construction of the Standard Gauge Railway (SGR) project from Dar es Salaam to Makutupora. According to the Tanzania Railways Corporation, it is expected that the railway will address current congestion challenges and decrease freight service charges by 40%, as the railway will be able to haul up to 10,000 tons of freight, equivalent to 500 lorries, per trip. It will also connect Tanzania to Burundi, Rwanda and The Democratic Republic of Congo, DRC, thereby playing a key role in enhancing regional trade. Standard Chartered Tanzania acted as Global Coordinator, Bookrunner and Mandated Lead Arranger on the facility agreement that is the largest foreign currency financing raised by the Ministry of Finance to date. The biggest component of financing comes from the Export Credit Agency Covered Facility(‘s) from the Export Credit Agencies of Denmark and Sweden.

https://www.busiweek.com/tanzania-gauge-railway-project-kicks-off-with-stanchart...


Euler Hermes supports attractive investment opportunities in Egypt

(MENAFN, Cairo, 8 February 2020) According to the Head of Deutsche Bank's representative office in Cairo, a higher economic growth rate, improved credit conditions, privatisation of public companies and listings in the local exchange will help Egypt to move towards a more private-sector-lead economic model. Deutsche Bank helped the government of Egypt arrange its first euro dominated bond ever, raising €2bn in the international debt capital markets. Another transaction is Deutsche Bank's participation in the financing of three power plants for €3.5bn for the Egyptian Electricity Holding Company (EEHC). Supported by German export credit agency Euler Hermes, these deals represent part of the single largest order ever for our partner, Siemens, the largest-ever STEF export finance transaction and the largest-ever export financing in the Egyptian market.

https://menafn.com/1099673685/Egypt-provides-attractive-investment-opportunity-t...


What's New January 2020

"What's New!" is a periodic update to keep you informed of the latest on the ECA Watch website. What's New! features a wide range of materials related to the reform of Export Credit Agencies (ECAs) including NGO publications and releases, news articles, commentaries and announcements about the policies and practices of ECAs and ECA-financed projects world-wide.

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

Email info-at-eca-watch.org

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

  • Luanda leaks show Dutch Export credit insurer Atradius involved in serious Angola human rights violations
  • UKEF to cease coal project support but current oil and gas projects will emit equivalent of 17 coal plants or 69m tonnes
  • Airbus faces record $4 billion fine after UKEF bribery probe
  • Davos: Financing fossil fuels risks a repeat of the 2008 crash
  • EDC writes off $200 million - won't say what for or why!
  • 2019 Review of Developments In Islamic Finance
  • Nigerian LNG expansion to include ECA financing
  • Saudi ECA offers support for TAPI pipeline
  • India asks DGFT to check fake export credit refund claims

Luanda leaks show Dutch Export credit insurer Atradius involved in serious Angola human rights violations

(Guardian, Luanda, 20 January 2020) Until the summer of 2013, Areia Branca, a fishing village just outside Luanda, the capital of Angola, was home to a thriving fishing community of 3,000 families. Now there is no trace of their houses, only sand, a pile of gravel, egrets, a bulldozer and a police post, bulldozed to make way for the Marginal da Corimba project, a multibillion-dollar real estate and highway development along Luanda’s coastline led by Isabel dos Santos, the daughter of Angola’s former president José Eduardo dos Santos. The Luanda Leaks investigation based on a huge cache of financial records belonging to dos Santos, Africa's richest woman, suggest her company stood to benefit from redevelopment of the vacated land. Many of Areia Branca’s former residents have moved to the other side of the lagoon, packed on to a tiny patch of land, known as Povoado. Previously a waste dump through which two sewage channels flowed, it has become home to 500 families sharing tiny shacks made of corrugated tin. Children play among piles of rotting rubbish. Infectious diseases – malaria, tuberculosis, meningitis – are rife. Documents released by the International Consortium of Investigative Journalists suggest dos Santos’ Urbinveste received at least $12 million from the Angolan government for work on the project. British architects Broadway Malyan and Dutch dredging company Van Oord claim not to have been aware of the forced evictions on behalf of the dos Santos real estate and construction company Urbinveste. Following revelations in the Dutch business press, a Both ENDS opinion piece in the Dutch business newspaper FD notes that the official export credit insurer Atradius DSB has not complied with OECD Guidelines for Multinational Enterprises. It appears that the Dutch ECA failed to do sufficient due diligence on environmental and human rights impacts and bribery risks before issuing an insurance to facilitate Van Oord and the Dutch ING bank's involvement in this project.

https://www.theguardian.com/world/2020/jan/20/fishing-community-bulldozed-isabel...


UKEF to cease coal project support but current oil and gas projects will emit equivalent of 17 coal plants or 69m tonnes

(Energy Live News, London, 24 January 2020) UKEF is financing fossil fuel projects overseas that are estimated to emit around 69 million tonnes of greenhouse gases every year, according to a new investigation by BBC Newsnight and Greenpeace. Prime Minister Boris Johnson recently announced the government will put an immediate end to using taxpayers’ money to support coal mining and coal-fired power stations in developing countries. The investigation found that no coal plants have been financed since 2012 but all the fossil fuel projects supported by UKEF which are oil and gas-related will emit the equivalent greenhouse gas emissions from 17 coal plants. A report from the Environmental Audit Committee (EAC) last year found 96% of UKEF’s energy investment between 2013 and 2017 went to fossil fuel projects – a fifth of all its investments. The Catholic charity CAFOD pointed to the fact that Johnson said the UK was still going to help countries with oil and gas production, not phase out all forms of public support for fossil fuels overseas

https://www.energylivenews.com/2020/01/24/uk-financing-fossil-fuel-projects-over...


Airbus faces record $4 billion fine after UKEF bribery probe

(Reuters, London, 28 January 2020) Airbus faces a record $4 billion fine and lower 2019 profits after unveiling a preliminary deal with French, British and U.S. authorities following a crippling three-year probe into allegations of bribery and corruption over jetliner sales. The European planemaker has been investigated by French and British authorities for suspected corruption over jet sales dating back over a decade. It has also faced U.S. investigations over suspected violations of export controls. British and French investigations began after Airbus alerted regulators to misleading and incomplete declarations it had made to Britain’s export credit agency over payments to sales agents. “To my knowledge, an approximate $4 billion global settlement amount would be the largest global bribery settlement amount in history,” said bribery law expert Mike Koehler, a professor at Southern Illinois University School of Law. Airbus has fired more than 100 people over ethics and compliance issues as a result of its own probe into the allegations, which widened to other divisions. But the internal probe led to anger within the Franco-German firm and its jet sales teams who denied any influence over the tightly controlled agent system, which political sources have described as part of a wider French influence network abroad. It also threatened to reopen Franco-German tensions over Airbus as French sources complained the row diverted attention from a separate probe into fighter jet dealings with Austria, partially overseen by German-born Tom Enders who later served as chief executive. Enders has denied any wrongdoing. A further German probe into potential misuse of client documents is ongoing.

https://www.reuters.com/article/us-airbus-probe/airbus-agrees-to-settle-corrupti...


Davos: Financing fossil fuels risks a repeat of the 2008 crash

(World Economic Forum, Geneva, 3 January 2020) To continue financing fossil fuel expansion is today’s equivalent of betting the bank - and the global economy - on subprime mortgage-backed securities over a decade ago; it is fuelling a crisis that, even if it generates short-term profit, will inevitably cause economic catastrophe alongside the climate emergency. Since the Paris Agreement was signed, 33 major global banks have collectively poured $1.9 trillion into fossil fuels. To avoid any misinterpretation, governments should provide central banks with an explicit mandate to extend their horizon on financial stability to fully encompass climate risk and to be a force for decarbonization. Reporting under the Task Force for Climate Related Financial Disclosure should be mandatory. Governments should end supply-side subsidies and export credit financing for fossil fuels and incentivise investment in renewable energy.

https://www.weforum.org/agenda/2020/01/financing-fossil-fuels-repeat-2008-crash-...


EDC writes off $200 million - won't say what for or why!

(iPolitics, Ottawa, 22 January 2020) A report from Public Accounts of Canada for the 2018-19 fiscal year contains a line item for $196,010,248 that was written off from Export Development Canada’s (EDC) Canada Account, which offers financing for higher-risk projects and sales that the international trade minister deems is in best interest of the country. Guillaume Bérubé, a spokesperson for Global Affairs Canada refused to disclose to iPolitics what the item was, but said the decision to write-off the amount was made on recommendation that it was in the “best interests of Canada and Canadians.” In an April 2018 report he federal auditor general said Export Development Canada has significant problems when it comes to risk management because it hasn’t kept up with evolving industry practices.

https://ipolitics.ca/2020/01/22/federal-ministers-write-off-200m-loan-but-depart...


2019 Review of Developments In Islamic Finance

(ProShare, Lagos, 5 January 2020) According to the Islamic Financial Industry Stability Report, the current global size of the market is $2.19trn,  which attests to a remarkable growth post-2008 financial crisis. Malaysia is currently the leading hub for Islamic Finance globally. At the end of 2017, it continued to be the main driver for both Sukuk outstanding and issuance for the year, with a global market share of 51% and 36.2% respectively, according to the Malaysian Reserve Bank report. Africa's market size for Islamic Finance as of 2011 was $18bn, while the potential for Nigeria since then is over $17bn. Nigeria and Africa are the new frontiers for the growth of Islamic Finance globally. The apex regulator of Nigeria's capital market, the Securities and Exchange Commission (SEC) restated its commitment in 2019 to provide the regulatory framework that will support the growth and development of the non-interest finance market.

https://www.proshareng.com/news/Islamic-Finance/2019-Review-of-Developments-In-I...


Nigerian LNG expansion to include ECA financing

(The Nation, Lagos, 20 January 2020) The Nigeria Liquefied Natural Gas Limited (NLNG) has appointed one of Japan’s leading banks and the core unit of Sumitomo Mitsui Financial Group – Sumitomo Mitsui Banking Corporation (SMBC) and one of Nigeria’s leading banks – Guaranty Trust Bank Plc, as financial advisers for the Train 7 LNG processing project estimated to cost between $10 billion and $12 billion. The Train 7 project will be financed partly from NLNG balance sheet and partly through third party corporate loans from Export Credit Agencies and a number of key International and local banks. Discussions on these financial deals are ongoing. Barring unforeseen circumstances, Train 7 is expected to be completed within five years from start of construction. On completion, it will increase the company’s production capacity at its plant on Bonny Island, Finima, Rivers State from 22 million metric tonnes to 30 million metric tonnes per annum. Nigeria LNG is owned by four shareholders – the Federal Government represented by NNPC (49 per cent); Shell (25.6 per cent); Total Gaz Electricite Holdings France (15 per cent) and Eni International N.A. N.V. S.àr.l (10.4 per cent).

https://thenationonlineng.net/nlng-appoints-japans-smbc-gtbank-train-7-financial...


Saudi ECA offers support for TAPI pipeline

(EurasiaNet, New York, 14 January 2020) Turkmenistan's state media reported that the president had signed a decree authorizing the State Bank for Foreign Economic Affairs to conclude a loan with the Saudi Development Fund for the Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline. This is only the latest offer of assistance from Riyadh. Documents seen by Eurasianet reveal that the Saudi-backed Islamic Corporation for the Insurance of Investment and Export Credit, or ICIEC, has committed to $500 million in financing for the project. The ICIEC is a member of the Saudi-led investment fund, the Islamic Development Bank, or IDB, which has offered as much as $1 billion in financing for TAPI. Even all this Saudi money may not be sufficient to cover the ultimate cost of TAPI, which has been estimated at anywhere between $7.5 billion and $10 billion. The security situation along TAPI’s route is not the only thing spooking lenders. Turkmenistan’s endemic nepotism and corruption is also a disincentive.

https://eurasianet.org/turkmenistan-more-cotton-less-water-little-sense


India asks DGFT to check fake export credit refund claims

(New Kerala, New Delhi, 5 January 2020) After unearthing firms that made fake export credit claims, India's Department of Revenue has asked the Directorate General of Foreign Trade (DGFT) to seek regular compliance and verification reports from regulators. India refunds Integrated Goods and Services Tax paid by "star exporters" (exports of more than $3 million per year) as a form of export subsidy. Ongoing investigations have thrown up at least 9 star export houses as 'non-traceable' at their premises declared on record. All these star export houses have availed IGST refunds, which are now being questioned by tax officers. There are instances where an exporter with over Rs 50 crore of exports of readymade garments has taken refund of Rs 3.90 crore while the entity's total GST payment in cash was a mere Rs 1,650. The Revenue Department has identified several star-rated export houses that are bogus or shell export houses claiming fake refunds. Alarmed at the misuse of IGST refunds, the CBIC has requested to DGFT to install a more robust accreditation process. Meanwhile,  India's Commerce and Industry Minister recently announced that the scheme for providing export credit at low interest rates announced in September last year are being firmed up and would be implemented soon.

https://www.newkerala.com/news/2020/2210.htm


What's New December 2019

"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.

  • Controversy over Chinese subsidies for Huawei
  •  US Ex-Im Bank gets seven-year extension
  •  European Parliament asks Member states to end ECA support for fossil fuel projects
  •  Sweden proposes climate and export strategy which includes ban on ECA support for fossil fuel exploration and extraction
  •  Insurers drop coal in droves to “avoid climate breakdown”
  •  Korean ECA to Extend $375 Mil. to Daewoo E&C’s LNG Plant Project in Nigeria
  •  Gaslog LNG carrier announces $1.05 billion ECA backed debt
  •  Saudi Arabia looks for ECA finance to reduce deficits
  • UAE, Egypt to strengthen trade relations via ECA MoU
  •  Central Bank of Egypt launches ECA
  •  JBIC joins $1.3 billion financing for Bangladesh urea industries
  •  Chubb takes stake in ATI to boost African trade

Controversy over Chinese subsidies for Huawei

(Zdnet, York PA, 26 December 2019) Huawei Technologies has lashed out at a Wall Street Journal report that suggests the tech giant's success is fuelled by billions of dollars in financial support from the Chinese government, arguing that its ties are no different from any other "private company" that operates in China. The WSJ article noted that besides subsidies, Huawei since 1998 has received an estimated $16 billion in loans, export credits, and other forms of financing from Chinese banks for itself or its customers. But the WSJ also notes that Huawei’s largest American competitor, Cisco Systems, received $44.5 billion in state and federal subsidies, loans, guarantees, grants and other U.S. assistance since 2000. Further, it notes that Swedish export authorities provided some $10 billion in credit assistance for Sweden’s tech-and-telecom sector as of 2018 and that Finland authorized $30 billion in annual export credit guarantees economywide from 2017. A 2005 study by the UK Secretary of State for Trade and Industry showed that the "opportunity cost" of UK export credits, i.e. government "subsidies", was around US$271 million per annum. This dispute highlights the well known fact that Chinese and official OECD member export credit agency budgets are subsidies which violate the WTO's Agreement on Subsidies and Countervailing Measures. The OECD ECA Arrangement creates a WTO loop-hole for OECD ECA subsidies if they meet the OECD's poorly monitored and largely secretive OECD ECA self-monitoring. The Arrangement is a self-professed "Gentlemen's Agreement" designed to restrict a race to the bottom in export subsidies, but is flawed by a lack of transparency. So yes, the Chinese subsidize Huawei just as OECD ECAs subsidize their own exporters. The difference is the US claim of internet security concerns wrt Huawei in their efforts to retain economic superiority in global markets. Google and Facebook's violations of internet privacy and security don't seem to rate the same US concerns.

https://www.zdnet.com/article/huawei-refutes-suggestions-state-support-drove-its...


US Ex-Im Bank gets seven-year extension

(Space News, Washington, 21 December 2019) The year-end spending package President Trump signed into law late December 20 includes a 7 year re-authorization for EXIM, a lending agency that has been largely sidelined as a source of cheap financing for U.S. satellite deals since Congress let Ex-Im’s charter lapse in 2015. The $1.37 trillion omnibus bill, which funds the U.S. government through Sept. 30, 2020, provides Ex-Im its longest authorization period ever, though still shorter than what some lawmakers had sought. The enacted legislation also enables the bank to keep lending in the absence of a full board of directors by allowing other government officials to temporarily fill vacancies in order to maintain a quorum. New rules for Ex-Im Bank state that if the bank lacks a quorum for 120 consecutive days during a president’s term, a temporary board will form consisting of the treasury and commerce secretaries, the U.S. trade representative and the bank’s confirmed board members. That temporary board would remain until at least three board members are confirmed or until the U.S. president’s term expires... Proponents of Ex-Im Bank have in recent years sought to use the export-credit agency as a soft power tool to counter Chinese export credit and, by extension, Chinese influence globally. The legislation directs the bank “to focus on the important economic and national security challenges posed by China,” Kimberly Reed, Ex-Im’s president and chairman, said in a statement on Dec. 20. The board of directors of the Export-Import Bank of the United States (EXIM), included Nicaragua in its Country Limitation Schedule (CLS) Program, which, as of December 23, will stop working with Nicaragua. With this decision, Nicaragua joins the “undesirables club of the EXIM,” which also includes Afghanistan, Bolivia, North Korea, Cuba, Eritrea, Haiti, Iran, Libya, Nauru, Central African Republic, Somalia, Sudan, South Sudan, Syria, Tajikistan, Venezuela and Yemen.

https://spacenews.com/ex-im-bank-gets-seven-year-extension/


European Parliament asks Member states to end ECA support for fossil fuel projects

(European Parliament, Brussels, 28 November 2019) The European Parliament resolution of 28 November 2019 on the 2019 UN Climate Change Conference in Madrid stresses that the EU’s budget should be consistent with its international commitments on sustainable development and its mid- and long-term climate and energy targets. Article 54 welcomes the decision taken by the EIB to end financing for most fossil fuel energy projects from the end of 2021 and specifically asks "the Member States to apply the same principle when it comes to export credit guarantees."

https://www.europarl.europa.eu/doceo/document/TA-9-2019-0079_EN.html


Sweden proposes climate and export strategy which includes ban on ECA support for fossil fuel exploration and extraction

(ECA Watch, Ottawa, 30 December 2019) The Swedish government has presented a climate policy action plan with 132 measures to the Riksdag "taking a holistic approach to how emissions will be reduced throughout Swedish society." We have been unable to find an outline of these measures but have been informed that the also recently updated trade and investment strategy includes a ban on export credits for fossil fuel exploration and extraction by 2022 (at latest) including for example, mining and construction machinery, trucks, dump trucks and wheel loaders, drilling equipment, excavators, where the purpose is to use these for the extraction of coal and oil or gas. It also includes fire protection equipment for oil drilling platforms. We hope to be able to provide further information in our next issue.

https://www.government.se/press-releases/2019/12/presentation-of-the-new-updated...


Insurers drop coal in droves to “avoid climate breakdown”

(Unfriend Coal, London, 2 December 2019) The number of insurers withdrawing cover for coal has more than doubled in 2019 as the industry’s retreat from the sector accelerates and spreads beyond Europe, the Unfriend Coal campaign reveals today in its third annual scorecard on insurance, coal and climate change. Coal exit policies have been announced by 17 of the world’s biggest insurers controlling 46% of the reinsurance market and 9.5% of the primary insurance market. Most refuse to insure new mines and power plants, while industry leaders have ended cover for existing coal projects and the companies that operate them, and adopted similar policies for tar sands. Action has escalated since international NGOs launched the Unfriend Coal campaign in 2017. Insurers have also divested coal from roughly $8.9 trillion of investments – over one-third (37%) of the industry’s global assets. Insuring Coal No More: The 2019 Scorecard on Insurance, Coal and Climate Change is published by 13 civil society organisations from 10 countries. It was launched to an industry audience at the Insurance and Climate Risk conference in London, as the UN Climate Summit commences in Madrid. As of November 2019, at least 111 globally significant financial institutions – including commercial banks, development financiers, insurers, export credit agencies and central banks – had divested from coal or reduced their exposure to the sector in other ways. Yet in July 2019, 2,459 coal plants with a combined capacity of 2,027 gigawatts were in operation, and another 980 with a combined capacity of 925 gigawatts were planned or under construction.

https://unfriendcoal.com/2019scorecardnews/


Korean ECA to Extend $375 Mil. to Daewoo E&C’s LNG Plant Project in Nigeria

(Business Korea, Seoul, 23 December 2019) The Korea Export-Import Bank announced on Dec. 22 that it will provide US$375 million in loans to Daewoo Engineering & Construction’s LNG plant project in Nigeria. For the first time as a Korean company, Daewoo E&C won the LNG plant as a prime contractor in September. It will carry out the project on an engineering, procurement and construction (EPC) basis. The LNG plant market had been dominated by five or six builders from developed countries including the United States, Japan, and Italy. The project involves building an LNG plant with an annual production capacity of 7.6 million tons and additional facilities for the plant on Bonny Island of southern Nigeria. When the plant is completed, the nation’s LNG production will soar from 22 million tons to 30 million tons annually. Apart from the Korea Export-Import Bank, the Korea Trade Insurance Corp. is considering extending a loan of a similar size. Korean export credit agencies (ECAs) are expected to provide around US$750 million to the project. This project is also the first to be supported through a special account set up by the Korean government to help Korean companies land more overseas orders.

http://www.businesskorea.co.kr/news/articleView.html?idxno=39469


Gaslog LNG carrier announces $1.05 billion ECA backed debt

(Hellenic Shipping News, Cyprus, 17 December 2019) LNG carrier GasLog Ltd. announced that it has signed an Export Credit Agency-backed debt financing of $1.05 billion with twelve international banks for its current newbuilding programme (the “Newbuild Facility”). The Newbuild Facility covers the balance due to the shipyard on delivery and consequently the final instalments of the seven newbuildings are fully funded. Five of these seven newbuildings are scheduled to deliver from the yards into firm multi-year charters in 2020 and the remaining two into firm multi-year charters in 2021. GasLog’s owned fleet consists of 32 vessels, with 25 liquefied natural gas carriers on the water and seven LNG carriers on order. This includes 13 LNG carriers in operation that are owned by its New York-listed unit GasLog Partners.The deal is backed by the Export Import Bank of Korea (“KEXIM”) and the Korea Trade Insurance Corporation (“K-Sure”), who are either directly lending or providing cover for over 60% of the facility. Gaslog's latest tanker acquisition was recently launched at the South Korean Samsung Heavy Industries shipyard.

https://www.hellenicshippingnews.com/gaslog-ltd-announces-newbuild-financing-fac...


Saudi Arabia looks for ECA finance to reduce deficits

(Bloomberg, Riyadh, 11 December 2019) Saudi Arabia may tap international debt markets as early as next month as it seeks funding to help bridge its widening budget deficit. In addition to selling bonds the debt office is also looking at alternative options including export credit agency financing. Fahad Al-Saif, head of the Finance Ministry’s debt management office, said “We are now engaged in ECA financing that actually makes sense to be plugged into the portfolio. Also infrastructure finance, project finance -- it depends. There are certain governmental projects that we could finance away from the debt capital markets.”

https://finance.yahoo.com/news/saudi-arabia-may-tap-debt-133531786.html


UAE, Egypt to strengthen trade relations via ECA MoU

(Gulf Today, Dubai, 16 December 2019) UAE and Egypt have agreed to strengthen trade relations and boost bilateral exports between the two countries through a Memorandum of Understanding (MoU) signed between Etihad Credit Insurance (ECI), the UAE Federal Export Credit company and the Export Credit Guarantee Company of Egypt (ECGE). UAE-Egypt non-oil trade in 2018 amounted to Dhs20.1 billion (US$5.44 B), a 14.6 per cent growth compared to Dhs17.6 billion (US$4.8 B) in 2017 indicating a strong overall strategic partnership between the two countries, according to data released by the UAE Ministry of Economy. Furthermore, the UAE ranks first globally in terms of investments in Egypt with total FDI amounting to Dhs24.3 billion (US$6.6 B) reflecting the activity of 990 Emirati companies that invested in Egypt at the end of 2018. Egypt, on the other hand, ranks 28th globally in terms of investing in the UAE with total FDI valued at Dhs3.3 billion (US$899 M) during the same period.

https://www.gulftoday.ae/business/2019/12/16/uae-egypt-to-strengthen-trade-relat...


Central Bank of Egypt launches ECA

(Global Trade Review, London, 11 December 2019) The Central Bank of Egypt (CBE) has signed off on a new US$600mn export credit risk company in a bid to bolster Egypt’s intra-Africa trade links. The new company, which will be based out of Cairo, will seek to help Egyptian companies win contracts for major projects with African governments, which the African Export-Import Bank (Afreximbank) claims are [could be?] worth US$60bn annually. Trade between Egypt and other African countries is only around 2% of total Egyptian exports.

https://www.gtreview.com/news/africa/central-bank-of-egypt-launches-export-credi...


JBIC joins $1.3 billion financing for Bangladesh urea industries

(The Daily Star, Dhaka, 2 December 2019) The Hongkong and Shanghai Banking Corporation (HSBC) has arranged USD1.3 billion financing for Bangladesh Chemical Industries Corporation (BCIC) to set up its Ghorasal Potash Urea Fertilizer Project (GPUFP). This is the largest financing backed by an Export Credit Agency ever completed in Bangladesh. BCIC has signed loan agreement for $1.3 billion with Japan Bank for International Cooperation (JBIC), Bank of Tokyo-Mitsubishi UFJ Ltd (MUFG) and HSBC. Of the total credit HSBC will provide $300 million and rest $1 billion will be arranged by JBIC and MUFG.

https://www.thedailystar.net/business/bangladesh-chemical-industries-hsbc-financ...


Chubb takes stake in ATI to boost African trade

(Global Trade Review, London, 11 December 2019) Global insurer Chubb has made a US$10mn equity investment in the African Trade Insurance Agency (ATI), becoming the first global property and casualty insurer to invest in the multilateral political risk and credit insurance agency. ATI supports trade and investment in African member state nations by offering complete risk solutions, including credit insurance and political risk products. It currently has 16 African nations and 10 institutional members as shareholders, and claims to support trade and investment in the countries it represents equivalent to between 1 and 2% of their GDP.

https://www.gtreview.com/news/africa/chubb-takes-stake-in-ati-to-boost-african-t...


What's New November 2019

"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.

  • France targets fracking & flaring with ECA guarantee overhaul
  • UAE running secret prison in French ECA supported LNG facility in Yemen
  • The ECA fossil elephant in the Dutch room
  • 20% of Dominican Republic territory at risk from fossil fuel auction
  • AfDB approves $400m loan for Mozambique LNG facility
  • EU Council to host business and human rights conference
  • Dutch Ship Firm Kept Fees Secret
  • Nigeria's Ajaokuta Steel completion to receive Russian ECA support
  • World Bank warns of Kenyan [ECA] debt distress
  • EU takes Greece off short-term export credit ‘blacklist’
  • UK export credit agency to provide US$303m in support of Formosa II
  • EX-IM signs new co-financing pact with Japanese rival NEXI
  • UK judge rules EDC can proceed with sale of Gupta jet

France targets fracking & flaring with ECA guarantee overhaul

(Reuters, Paris, 5 November 2019)  France is considering halting funding guarantees for energy projects abroad that involve fracking or flaring, according to a finance ministry report. The government aims to make its program of state guarantees for export financing more environmentally friendly and is dropping support for coal projects as a first step. Next year it will also look into stopping export guarantees for oil and gas activities that are banned in France, including fracking and gas flaring, the report submitted to lawmakers states. In the medium term, a ban on state guarantees for developing new foreign oil fields might also be considered.

https://www.reuters.com/article/us-france-exports/france-targets-fracking-and-fl...


UAE running secret prison in French ECA supported LNG facility in Yemen

(Sum Of Us, Paris, 7 November 2019) - A report published today by L'Observatoire des armements and SumOfUs in collaboration with Les Amis de la Terre France, documents the militarisation of Total's activities in Yemen since the 1980s. Open sources and witness testimony reveal that Total’s gas liquefaction site at Balhaf has been set up as a military base (since 2009) and a secret prison (2017-2018). The report also questions the role of the French government, which was involved in the militarisation of the site, and is the guarantor of Total’s Yemen LNG gas liquefaction project. French export subsidies are currently being discussed in the Assemblée nationale as part of the 2020 Finance Bill. Le Monde reports that Total has received official French export credit guarantees totaling 216 million Euros. Le Monde has drawn information from testimonies collected by Amnesty International, as well as a group of UN experts on Yemen, as well as non-governmental organizations and Yemeni activists who confirmed the existence of the prison inside a military base set up by the UAE in the same place. These reports draw on several accounts of arbitrary detention and inhuman and degrading treatment – such as torture and denial of medical care – by Emirati soldiers.

https://www.sumofus.org/media/military-base-checkpoints-secret-prison-report-rev...


The ECA fossil elephant in the Dutch room

(Both Ends, Amsterdam, 17 November 2019) This report shows that the Dutch Export Credit Agency ADSB insured fossil fuel-related projects with a total insured value of € 10.8 billion in the period 2012-2018. This is more than 60% of its total insured value for that period and € 1.5 billion a year on average. The policy incoherence  thus created by the Dutch government nullifies the Dutch contributions to international climate ambitions. The Dutch government indicates that it will end all financial support to coal projects and exploration and development of new oil and gas fields abroad from its foreign trade and development cooperation instruments as of 2020. Unfortunately, this commitment is not applied to the export credit facility, which supports the by far largest volume of fossil fuel related business transactions abroad. By not applying the same principles to its public export credit support, the Dutch government undermines its own foreign climate ambitions. This report calls upon the Dutch government to align the policies of its Export Credit Agency  with the Paris climate goals. Furhtermore, it provides suggestions for possible ways to go about it.

https://www.bothends.org/en/Whats-new/Publicaties/The-fossil-elephant-in-the-roo...


20% of Dominican Republic territory at risk from fossil fuel auction

(Bank Track, Nijmegen, 26 November 26, 2019) Ahead of the November 27 auctioning of exploration licenses for 14 onshore and offshore oil and gas blocks in the Dominican Republic, environmental groups warned financiers not to back companies which may end up being awarded licenses. Dominican NGO CNLCC, Italy's Re:Common and BankTrack have raised concerns over the major climate risks and adverse environmental and social impacts which would result from the opening up of fossil fuel blocks in the country’s Cibao, Enriquillo, Azua, and San Pedro basins which together cover more than 20 percent of Dominican territory. A major corruption scandal has plagued the Dominican Republic involving the Brazilian construction company Odebrecht, which received the Punta Catalina coal-fired power plant contract due to an opaque, allegedly criminal tendering process. European banks were compelled in 2018 to freeze their project finance disbursements.

https://mailchi.mp/banktrack/20-of-dominican-republic-territory-at-risk-from-fos...


AfDB approves $400m loan for Mozambique LNG facility

(Hydrocarbons Technology, London, 27 November 2019) The African Development Bank (AfDB) has approved a $400m loan to support construction of the integrated liquefied natural gas (LNG) plant and liquefaction facility in Mozambique. The Mozambique LNG Area 1 Project is led by the French corporation Total. Other partners in the project are Mitsui, Oil India, ONGC Videsh, Bharat Petroleum, PTT Exploration, and Mozambique’s national oil and gas company ENH. NGOs have provided overwhelming evidence that Mozambique's LNG projects will emit at least 5.2 million tons of carbon dioxide per year, causing climate chaos,

https://www.hydrocarbons-technology.com/news/afdb-400m-loan-mozambique-lng/


EU Council to host business and human rights conference

(European Council, Brussels, 28 November 2019) The Finnish Presidency of the European Council is hosting a conference on 2 December on business and human rights. The agenda includes a panel on "Promoting Human Rights Due Diligence through State Financing", noting that "A critical way for states to incentivise businesses to respect human rights is through the provision of public financing for private sector investments abroad through development finance, export credit and other forms of support. This discussion will explore the importance of leadership by individual state-based financial institutions and by government in this area.

https://eu2019.fi/documents/11707387/13552730/Final+Agenda.pdf/e3b018f0-a65b-d4b...


Dutch Ship Firm Kept Fees Secret

(Bahamas Tribune, Nassau, 12 November 2019) The Dutch company that supplied nine Royal Bahamas Defence Force vessels, Damen Shipyard Group, misrepresented to the Dutch government how much it paid a foreign intermediary that worked on the project. The World Bank disbarred Damen for 18 months in 2016 for failing to disclose an agent and the amount of commissions due to the agent. The Dutch government then temporarily suspended Damen from accessing its export credit insurance. Dutch Secretary of Finance Wopke Hoekstra said ADSB subsequently conducted an investigation and found 14 cases where Damen gave “insufficient or incorrect information in respect of paid agency commissions.” Damen’s project with The Bahamas was one of these cases. Dutch investigators believe Damen paid 12 percent of its contract with the Bahamian government to NSG Management & Technical Services Ltd as commissions. It is not clear what NSG’s work on the project involved. Dutch investigators are said to be examining whether Damen allegedly bribed foreign officials in multiple jurisdictions through their foreign agents. NSG is said to be at the centre of its inquiry.

http://www.tribune242.com/news/2019/nov/13/dutch-ship-firm-kept-fees-secret/


Nigeria's Ajaokuta Steel completion to receive Russian ECA support

(Nairametrisc, Lagos, 2 November 2019) Recent reports are that the completion of Nigeria's long-abandoned Ajaokuta Steel Complex would be funded by the Russia's MetProm Group with funding from the Russian Export Centre.  Nairametrics understands that although massive plants and other gigantic equipment in the complex were idle and most had been overgrown with weeds, most of the facilities were still functional, and as such over the years, the problems facing the company had not prevented the workers from receiving salaries. The Ajaokuta Steel Complex was originally built by another Russian firm, TyazhPromExport (TPE), but in 2016 the Federal Government decided to jettison TPE because the company did not want to complete the steel mill. A rail line and functional seaport are still needed to ease the operation of the steel mill.

https://nairametrics.com/2019/11/02/ajaokutas-completion-to-kick-off-as-russia-p...


World Bank warns of Kenyan [ECA] debt distress

(Daily Nation, Nairobi, 31 October 2019) In its Kenya Economic Update for October 2019, to be released today, the World Bank notes that, “with 43% of domestic debt expected to mature within a year, the government could face challenges in rolling over such bonds in an environment of no interest rate caps, low subscription rates and over-exposure of commercial banks to these assets”. Signs of distress in paying debt came to the surface last month after it emerged that Kenya had defaulted on a Sh500 million (US$4.9m) debt owed to a Belgian export credit company for the construction of a water supply system in Mavoko. Credendo Export Credit Agency, an export credit agency of the Kingdom of Belgium, had written to the Treasury demanding the payment by November 1, accusing the government of failing to pay despite repeated reminders. As at 30th September 2019, the Star reported that most of Kenya’s bilateral debt is on concessional terms with no interest chargeable on Sh4.2 billion and an interest rate of just 2.08 per cent on Sh660.5 billion from Exim Bank of China (which constituted 74 per cent of total bilateral debt and got the relic like railway trains chugging along).

https://www.nation.co.ke/news/Economy-in-crisis-World-Bank-warns-of-debt-distres...


EU takes Greece off short-term export credit ‘blacklist’

(Greek City Times, Sydney, 27 November 2019) The European Commission on Tuesday announced its decision to return Greece to the list of “marketable risk” countries for short-term export credit insurance, following the successful completion of its fiscal adjustment program in August 2018 and the continuing implementation of reforms. The European Commission said its decision will be activated on January 1, 2020, and will mean that “short-term export credit risks towards Greece will be considered as marketable to be covered by private insurers.”

https://greekcitytimes.com/2019/11/27/eu-takes-greece-off-the-credit-blacklist/


UK export credit agency to provide US$303m in support of Formosa II

(Renewables Now, Fresno, 5 November 2019) The UK’s export credit agency, UK Export Finance (UKEF), will provide a TWD-9.2-billion (US$303m/EUR 272m) project finance guarantee to support the construction of the 376-MW Formosa II offshore wind project in Taiwanese waters. UK companies will be involved in constucting the Formosa 2 offshore windfarm, helping to unlock the export potential of this growing sector of the UK economy.

https://renewablesnow.com/news/uk-export-credit-agency-to-provide-usd-303m-in-su...


EX-IM signs new co-financing pact with Japanese rival NEXI

Politico, Washington, 5 November 2019) EXIM has signed an agreement with Japan’s export credit agency, NEXI, that allows either agency to act as the lead on co-financing projects. Under the previous co-financing agreement, only Ex-Im could act as the lead. The expanded scope is expected to facilitate greater business opportunities for exporters of both nations, Ex-Im said. The new arrangement makes it “possible for Japanese companies to collaborate with American companies in infrastructure projects” in the Indo-Pacific region, NEXI Chairman and CEO Atsuo Kuroda said in a statement.

https://www.politico.com/newsletters/morning-trade/2019/11/05/trumps-china-deal-...


UK judge rules EDC can proceed with sale of Gupta jet

(Corporate Jet Investor, London, 21 November 2019) A judge in the UK courts has ruled that the sale of Global 6000 ZS-OAK can now go ahead, after Export Development Canada (EDC) settled its litigation with Westdawn Investments. Westdawn Investments is a South African company that is owned by the Gupta family, the wealthy Indian-born South African family with interests in computing, media, and mining and whose members who are under investigation for misappropriation of large amounts of state assets have fled the country. They have refused to return to face court hearings and to participate in criminal investigations. According to EDC, it ended its business relationship with Westdawn Investments in December 2017, after Westdawn Investments defaulted on its loan in October 2017. EDC’s statement notes that in the months and years following its decision to provide Westdawn Investments with the loan, allegations that the Gupta family had been involved in corruption and political interference in South Africa arose.

https://corporatejetinvestor.com/articles/judge-rules-that-edc-can-proceed-with-...


What's New October 2019

"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.

  • Climate activists spray UKEF with fake blood
  • Newt Gingrich: EXIM as a political tool against China
  • Putin is resetting Russia’s Africa agenda to counter the US and China
  • SINOSURE reports steady business growth
  • Irish businesses 'will need €1.5bn' to prevent job losses if there is a no-deal Brexit
  • Australia drops in defence export rankings
  • Korea should stop funding coal power in Indonesia
  • What is the remit of the ICC Global Export Finance Committee
  • EXIM provides loan for natural gas project in Mozambique
  • EXIM signs MoU with Iraq
  • Why finance and insurance is a key barrier to SMEs that want to export

Climate activists spray UKEF with fake blood

(Fox43 / CNN, Harrisburg, 4 October 2019) Environmental activist group Extinction Rebellion used a fire engine to spray 1,800 liters of fake blood at Britain’s finance ministry in London on Thursday, in protest over what it says is the UK’s contradictory stance on tackling climate change. “The protest is being held to highlight the inconsistency between the UK Government’s insistence that the UK is a world leader in tackling climate breakdown, while pouring vast sums of money into fossil exploration and carbon-intensive projects.”  Among the activists was 83-year-old grandfather Phil Kingston who said he came to the Treasury “to demand radical change,” in particular to the proposal that the UK Export Finance (UKEF), a government body that helps British businesses trade globally, works towards zero emissions by 2050, which he says is “far too late.” A report published by the UK Parliament’s Environmental Audit Committee  in June found UK Export Finance (UKEF) – a government body that underwrites loans and insurance to help British firms secure business abroad – had spent £2.6bn in the last five years supporting global energy exports. Of this, £2.5bn went on fossil fuel projects, with the vast majority in low- and middle-income countries.

https://fox43.com/2019/10/04/climate-activists-spray-uk-finance-ministry-with-fa...


Newt Gingrich: EXIM as a political tool against China

(Newsweek, Washington, 21 October 2019) Newt Gingrich - Opinion (How the Republican right sees EXIM): In the age of Huawei, the Belt and Road Initiative, and China's state-sponsored companies, we need the U.S. Export-Import (EXIM) Bank more than ever. The EXIM Bank, an independent agency, provides government-backed financing for those looking to export goods and services from the United States. Since the 1930s, it has helped grow the U.S. economy and foil unfairly aggressive foreign competitors. However, due mostly to recent politics, it hasn't been fully functioning since 2014. This needs to change - for many reasons. First, according to Chinese Defense Minister Wei Fenghe, the country's Belt and Road Initiative (BRI) is absolutely a part of its military plans... This is a big deal. According to EXIM Bank reports, the BRI system includes about 30 percent of the world's gross domestic product and impacts more than 66 percent of the world's population.

https://www.newsweek.com/newt-gingrich-export-import-bank-crucial-americas-abili...


Putin is resetting Russia’s Africa agenda to counter the US and China

(Quartz Africa, New York, 22 October 2019) The first-ever Russia-Africa summit will be held from Oct. 23-24 in Sochi, Russia, marking the culminating point of the return of Russia to Africa, with more than 50 African leaders and 3,000 delegates invited. This convening is only another illustration of the recent increase in  economic, security, and political-diplomatic engagements to foster Russia-Africa relations. Over the last decade there has been a proliferation of Russia-Africa bilateral committees, economic forums, and conferences for economic coordination. In 2011, the Russian Agency on Insurance of Export Credit Investments (EXIAR) was created in order to facilitate Russian companies’ activities and the protection of investments. Russia has boosted its initiative to strengthen ties with the African continent, signing a number of agreements and memorandum of understandings (MoUs) to collaborate on various rail projects during the Russia-Africa economic forum in Sochi on October 23-24. In other news, the CEO of the Russian Agency for Export Credit and Investment Insurance (EXIAR), Nikita Gusakov, said that Russia was seeking to benefit from the African Continental Free Trade Agreement, noting that the main challenge was to attract Russian companies to Africa. The AfCFTA hopes to encourage a movement from commodity exports to exportation of finished goods.

https://qz.com/africa/1732316/putin-resets-russias-africa-agenda-to-counter-chin...


SINOSURE reports steady business growth

(Xinhua, Beijing, 27 October 2019) China's only policy-oriented insurer specializing in export credit insurance reported steady business growth in the first three quarters of this year. China Export & Credit Insurance Corporation, also known as SINOSURE, had served over 110,000 clients, increasing 13.8% year on year, and underwritten over US$450 billion worth of business from Jan. to Sept. In that period, over US$99.2 billion was insured for business in countries participating in the Belt and Road Initiative (BRI). Meanwhile, the company's insurance for business in emerging markets and exports from small and micro enterprises respectively stood at US$179.6 billion and US$49.9 billion U.S. dollars. An assessment report released by the Development Research Center of the State Council and SINOSURE showed that over US$150 billion of China's exports and investment in Belt and Road countries were insured by the company in 2018, surging 15.8% from the previous year. It was estimated that over US$640 billion of China's exports last year were underwritten by SINOSURE, accounting for 25.9% of the total exports.

http://www.xinhuanet.com/english/2019-10/27/c_138506413.htm


Irish businesses 'will need €1.5bn' to prevent job losses if there is a no-deal Brexit

(The Journal,Dublin, 7 October 2019) State aid worth €1.5 billion over the next three years will be needed to stabilise the economy and protect jobs if the UK crashes out of the European Union without a deal at the end of the month, the Irish Business and Employers Confederation (IBEC) has warned. The organisation said that, to help companies diversify, a new scheme for export credit insurance aimed at companies impacted by Brexit who want to diversify away from the UK, should also be introduced.

https://www.thejournal.ie/irish-business-no-deal-brexit-4839961-Oct2019/


Australia drops in defence export rankings

(Australian Defense Magazine, Canberra, 3 October 2019) New figures from the Stockholm International Peace Research Institute (SIPRI), the world’s leading authority on global military spending, show that Australia has become the world’s second largest weapons importer but has dropped to 25th in the export rankings. Australia previously ranked as the fourth-largest importer and 18th largest exporter. It now imports more military equipment than any other country bar Saudi Arabia and exports less than Belarus, the Czech Republic and Norway. The export drop comes in spite of the government’s push to make Australia one of the world’s top ten largest military exporters. The news of the export drop comes in spite of the government’s push to make Australia one of the world’s top ten largest military exporters. The Defence Export Strategy, announced in early 2018, includes a $3.8 billion Defence Export Facility administered by Australia’s export credit agency and a $20 million per annum re-allocation of funds within Defence.

http://www.australiandefence.com.au/defence/budget-policy/australia-drops-in-def...


Korea should stop funding coal power in Indonesia

(Korea Herald, Seoul, 7 October 2019) While South Korea has vowed to phase out fossil fuels and turn to clean energy to combat climate change and air pollution, it is supporting coal-fired power plants elsewhere - like in Indonesia. The government is virtually contributing to environmental damage as well as corruption in Indonesia by financially supporting Korean companies that are building coal-fired power plants there, according to an environmental activist. “The land has been contaminated so much that we cannot plant fruits anymore. The seawater is also severely contaminated, so the number of fish in the sea has plummeted. We have to go a long distance to catch fish,” said Meiki Wemly Paendong, executive director of West Java at WALHI, an environmental organization in Indonesia. “The pollution levels have worsened, with many locals contracting respiratory diseases,” he said. “Local residents (living near the coal-fired power plant) feel that the plant is ruining everything.” Building of the 1,000-MW Cirebon 2 coal-fired power plant in West Java, Indonesia, began in 2016, with Export-Import Bank of Korea providing a 600 billion won (US$515 million) loan for the project. The construction is set to be completed in 2022. Indonesia’s Corruption Eradication Commission has already questioned some 140 people linked to the corruption allegations as part of a sweeping investigation of the Cirebon project. Over the last decade, Korea has invested a combined 11.6 trillion won (US$10 billion) in 24 coal plant-building projects in seven countries through state-run banks, including the Export-Import Bank of Korea, the Korea Development Bank and Korea Trade Insurance Corp. While the Indonesian government is considering suspending at least half of the plants in the wake of worsening environmental pollution, Korea plans to fund the construction of two more 2,000-MW coal power plants -- Jawa-9 and Jawa-10 -- in Suralaya, Indonesia.

http://www.koreaherald.com/view.php?ud=20191007000792


What is the remit of the ICC Global Export Finance Committee

(Global Trade Review, London, 29 October 2019) The International Chamber of Commerce Global Export Finance Committee is part of the ICC Banking Commission and was set up in 2015 with the remit of serving as a globally representative body for banks active in export finance. We believe it’s the only industry body representing banks active in export finance on a global basis. Currently there are 16 member banks and we are keen to grow membership further. In terms of market representation, members currently include eight of the top 10 global banks in export finance and over 60% of market volume (based on the Dealogic 2018 league tables). The committee was formed as a reaction to the perceived need for a common approach for banks active in the export finance on regulatory matters and broad market changes. It had its origins in the efforts to add export finance to the ICC Trade Register (the global industry database of default and recovery rates for trade and export finance). As the Trade Register discussions for export finance evolved, it became clear that there was space in the market for a broad, global platform for banks active in export credit agency (ECA) finance to engage in discussion, advocacy and stakeholder engagement.

https://www.gtreview.com/magazine/volume-17-issue-4/spotlight-icc-global-export-...


EXIM provides loan for natural gas project in Mozambique

(MACAUHUB, Macau, 30 September 2019) Despite overwhelming evidence that the proect will emit at least 5.2 million tons of carbon dioxide per year, causing climate chaos, the US Export and Import Bank has approved a US$5 billion loan to support the export of domestic goods and services for the various phases of construction and development of the integrated liquefied natural gas project in northern Mozambique. Outlining the economic benefits to the USA, the EXIM statement issued in Washington said that this loan will support an estimated 16,400 jobs over the five-year period of the construction of the two natural gas processing plants and additional supplier facilities in the states of Texas, New York. York, Pennsylvania, Georgia, Tennessee, Florida, and the District of Columbia. The bank added that granting this loan would represent US$600 million in revenue to the US Treasury, including fees and interest charged to the borrower, the Mozambique LNG1 Financing Company Ltd. This company, which is owned by a group of sponsors, previously included the Anadarko Petroleum Corporation group, acquired in August by US group Occidental Petroleum Corporation.

https://macauhub.com.mo/2019/09/30/pt-banco-federal-dos-eua-concede-emprestimo-p...


EXIM signs MoU with Iraq

(MENAFN, Amman, 19 October 2019) The Export-Import Bank of the United States (EXIM) has entered into a memorandum of understanding (MOU) with the Ministry of Finance of the government of Iraq aimed at rebuilding Iraq and enhancing trade and economic cooperation between the two countries. The MOU replaces the previous agreement signed in Kuwait in February 2018 and increases the total amount of EXIM financing potentially available under the MOU from $3 billion up to a total of $5 billion.

https://menafn.com/1099151231/EXIM-signs-MoU-with-Iraq


Why finance and insurance is a key barrier to SMEs that want to export

(Telegraph, London, 23 October 2019) New research shows that many SMEs in the UK want to explore opportunities overseas, but are put off by the potential payment issues. More UK small businesses would happily export across the globe if they had the correct finance in place, and felt protected against late payments. This is the key takeaway from research by Capital Economics for UK Export Finance (UKEF), the government’s export credit agency set up to support companies that want to sell their products and services overseas.

https://www.telegraph.co.uk/business/business-club/business/sme-exports/


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