ECA Watch Newsletter

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/


What's New September 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.

  • EXIM finances massive LNG project that will cause climate chaos
  • UK Tory donor gets UKEF backing despite major fraud investigation
  • Paltry Climate Finance Provided and Mobilised by ECAs in 2013-17
  • $1.5 trillion global trade finance gap affecting SDG targets
  • 2017 Report to the U.S. Congress on Global Export Credit Competition
  • Export-Import Bank eyes expanded role with LNG sector
  • Will ECAs and Asian banks join the movement to decarbonise shipping
  • OeKB readies debut SRI bond
  • Iridium lands seven-year, $738.5 million Defense Department contract
  • Austrade and Export Finance Australia help defence companies go global
  • Afreximbank okays $500m for Nigerian manufacturers
  • Abu Dhabi's ADFD launches ECA
  • Iran's ECA Covers $1b Exports in 5 Months
  • India, Russia identify new prospects for ECA led cooperation

EXIM finances massive LNG project that will cause climate chaos

(FOE USA, Washington, 27 September 2019) The U.S. Export-Import Bank’s (EXIM) Board of Directors voted late yesterday to provide $5 billion in financing for a liquid natural gas (LNG) project in Mozambique, making it the largest federal subsidy for a fossil fuel project in the bank’s history. This final vote by the board follows a preliminary vote last month and a 35-day Congressional review period. The board’s vote comes as U.S. Representative Rashida Tlaib (D-Mich.) and Senator Jeff Merkley (D-Ore.) led delegation letters opposing the project. Despite the opposition, EXIM charged forward with this massive fossil fuel project, which EXIM admits will directly emit at least 5.2 million tons of carbon dioxide per year. “EXIM’s irresponsible approval of $5 billion for LNG development in Mozambique, despite Congressional opposition, demonstrates how the bank  puts fossil fuel profits above the health of local communities and the planet,” said Kate DeAngelis, Senior International Policy Analyst at Friends of the Earth. “Congress now has the power to end EXIM’s support for fossil fuels if it chooses to reauthorize the agency.” Although natural gas is often touted as a cleaner fuel than coal, when you take into account the leaks involved in extraction, transportation, processing and burning of LNG it is not better for the climate than coal. Yet, the head of the EXIM board, Kimberly Reed, voiced her strong support for the industry. A 2016 Oxford study found that for the world to have a 50 percent chance of staying within internationally agreed limits for global warming, no new fossil fuel plants could be built after 2017.

https://foe.org/news/world-leaders-discuss-climate-action-u-s-government-finance...


UK Tory donor gets UKEF backing despite major fraud investigation

(The Independent, London, 27 September 2019) An oil company run by Ayman Asfari, the chief executive of Petrofac, a major Tory donor who met with Boris Johnson, has had a billion pound deal underwritten by UK Export Finance (UKEF) despite it being investigated by the Serious Fraud Office. Despite the company being embroiled in scandal, it has secured a £733.5m loan guarantee from  UKEF which is responsible for underwriting the loan which helped secure a £1.6bn contract to develop the Duqm refinery project in Oman. According to Electoral Commission figures, Mr Asfari and his wife have donated £860,450 in cash to the party since 2009. Petrofac’s former global head of sales, David Lufkin, pleaded guilty to 11 counts of bribery earlier this year after offering cash payments to middlemen to secure lucrative refinery contracts worth £4.2bn in Iraq and Saudi Arabia. In 2017 the UK Serious Fraud Office launched an investigation into Petrofac relating to suspected bribery, corruption and money laundering. UKEF is not the only ECA supporting this project. The Dutch company Boskalis Westminster Dredging BV received an export credit insurance from Atradius DSB on 15 January 2018 for the “Design, procurement and construction of marine infrastructure and dredging works. Duqm Liquid Bulk Berths project. Port of Duqm, Al Wusta region. The project entails a new liquid bulk terminal to handle the import and export of crude and other hydrocarbons.”

https://www.independent.co.uk/news/uk/politics/ayman-asfari-boris-johnson-tory-d...


Paltry Climate Finance Provided and Mobilised by ECAs in 2013-17

(OECD, Paris, 13 September 2019) This OECD report estimates annual volumes of climate finance provided and mobilised by developed countries for developing countries in 2013-17. These estimates include bilateral and multilateral public finance, official-supported export credits and mobilised private finance. It is consistent with the outcome of the UNFCCC COP24 on modalities for the accounting of financial resources provided and mobilised through public interventions. Of US$244 billion over 4 years, only 2.8% was provided by ECAs. By contrast, ECAs are one of the largest sources of public financing for fossil fuel projects worldwide, providing billions more for dirty energy than for renewable energy. In so doing, ECAs undercut international efforts to curb greenhouse gas emissions including those mentioned above. In 2009 developed countries committed to jointly mobilise USD 100 billion a year in climate finance by 2020 for climate action in developing countries. Insufficient progress in climate change mitigation is driving the climate system into unchartered territory with severe projected consequences.

https://www.oecd-ilibrary.org/environment/climate-finance-provided-and-mobilised...


$1.5 trillion global trade finance gap affecting SDG targets

(Down to Earth, New Delhi, 4 September 2019) A stubbornly high $1.5 trillion global trade finance gap is hampering efforts to achieve the United Nations-mandated sustainable development goals (SDG), especially those pertaining to women’s economic empowerment, job creation and inclusive growth, according to a report by the Asian Development Bank (ADB). The sixth-edition of the Trade Finance Gap, Growth, and Job Survey released on September 3, 2019, is based on responses from 112 banks from 47 countries, 53 export credit agencies from 17 countries and 336 firms from 68 countries. The large market gap for trade finance has affected women entrepreneurs more than men as they face the most rejection while applying for trade finance to expand their operations. The report showed that applications of 38 per cent male-owned firms were rejected, while for women entrepreneurs it was 44 per cent. Once rejected, 60 per cent women-owned firms were less likely to seek alternative finance.

https://www.downtoearth.org.in/news/economy/-1-5-trillion-global-trade-finance-g...


2017 Report to the U.S. Congress on Global Export Credit Competition

(EXIM, Washington, June 2018) This recently "discovered" 77 page report represents the second consecutive year in which the Competitiveness Report focuses on the changes other export credit agencies (ECAs) are making to enhance their competitiveness and the impact that EXIM’s absence from the LT market is having on the U.S. export community. To these points, the 2017 Competitiveness Report contains the following findings:

  1.  Outside of the United States, ECAs are no longer viewed predominately as transaction-oriented, reactive lenders of last resort. Instead, foreign ECAs are increasingly being “weaponized”—specifically organized and equipped to be maximally flexible and proactive in order to incentivize a shift in sourcing or support trade policy, particularly in key industries.
  2. The continued competitive pressure applied by the scale and flexibility of the Asian ECAs, particularly those from China, feeds the “sea change” in Europe among governments seeking to reinvent export credit support as their economies become more dependent on exports for growth
  3. ECAs are using new programs and flexibilities to compete. Prevalent tools include (a) “pump-priming” programs under which an ECA identifies a foreign company that could import more from the ECA’s country and offers these companies what is essentially a line of credit
  4. The change in stance among ECAs is taking place in a marketplace populated by ever-wider participation from other suppliers of commercial financing
  5. As reported by stakeholders, EXIM’s absence has disproportionately hurt smaller U.S. sub-suppliers along the supply chains of large exporters.
https://www.exim.gov/sites/default/files/reports/competitiveness_reports/2018/EX...


Export-Import Bank eyes expanded role with LNG sector

(S&P Global, Washington, 30 August 2019) The US Export-Import Bank could become a new source of support for US LNG export projects working to secure long-term contracts and financing, according to industry officials involved in recent discussions with the bank leadership. Ex-Im Bank Chairman Kimberly Reed met by teleconference with US LNG trade group officials August 21 to discuss ways the bank could help boost the volume of domestic LNG exports. Whether the bank can successfully expand its role hinges in part on getting attention from Congress to keep the bank fully operating past the end of September when its authorization runs out.

https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/08301...


Will ECAs and Asian banks join the movement to decarbonise shipping

(Eco-Business, Singapore, 25 September 2019) Three months ago, 11 international banks including Citi, Société Générale and ING signed a framework to promote responsible ship finance called the Poseidon Principles whose framework will tie shipping finance to climate targets that are in line with the International Maritime Organisation’s (IMO) goal to halve shipping’s greenhouse gas emissions by 2050. Two state-owned Chinese banks, the Bank of China and Export-Import Bank of China (China Exim), are the biggest lenders to shipping, according to Petrofin Research, which monitors the industry. Other major Asian players include the Export-Import Bank of Korea, China Development Bank and even Singapore’s DBS Bank.

https://www.eco-business.com/news/will-asias-banks-join-the-movement-to-decarbon...


OeKB readies debut SRI bond

(Global Capital, London, 5 September 2019) OeKB, Austria’s export credit agency, will go on roadshow next week to present its recently established sustainability bond framework to European investors. BNP Paribas, Danske Bank, HSBC and UniCredit won the mandate and will arrange a series of fixed income investor meetings across Europe, commencing on Friday, September 13. An inaugural bond in the format is expected to follow. A debut euro benchmark sustainability bond in an intermediate maturity may follow subject to market conditions, which will be OeKB’s first ever socially responsible investment (SRI) bond. Under its sustainability bond framework, OeKB can issue green, social and sustainability bonds. OekB has a long-term annual funding requirement of €5bn, comprising two to three benchmark issues, private placements, medium term notes, and issuance in other strategic markets such as sterling and Australian dollars. It has a focus on maturities of up to 10 years. Sustainability Bonds are bonds where the proceeds will be exclusively applied to finance or re-finance a combination of both Green and Social Projects as defined by the International Capital Market Association (ICMA) guidelines.

https://www.globalcapital.com/article/b1h0y596w17r6t/oekb-readies-debut-sri-bond


Iridium lands seven-year, $738.5 million Defense Department contract

(Space News, 16 September 2019) The U.S. government signed a seven-year $738.5 M agreement with Iridium Communications for unlimited use of the McLean, Virginia-based firm’s mobile communications constellation to ensures continuity for voice, data, broadcast and other services to Defense Department and associated users. Iridium borrowed $1.8 billion in 2010 from a syndicate of banks through a credit facility from BPIAE (formerly Coface), which it used to finance the purchase of 81 satellites from Franco-Italian manufacturer Thales Alenia Space. The company still owes $1.63 billion under the credit facility. Finalization of the EMSS contract would pave the way for Iridium to refinance the French export-credit loans it used to fund its $3 billion second-generation constellation, Iridium Next, that it finished deploying in January.

https://spacenews.com/iridium-lands-seven-year-738-5-million-defense-department-...


Austrade and Export Finance Australia help defence companies go global

(Mirage News, 6 September 2019) Government support for Australia’s defence industries is on the increase, as two government agencies extend collaboration. Under the Australian Government’s Defence Export Strategy , Austrade and Export Finance Australia – formerly Efic – are expanding support for Australian defence businesses. With additional co-ordination and resources from the Australian Defence Export Office, the two agencies are working more closely to help Australian defence companies grow overseas. From 1 July 2019, Efic’s trading name changed to Export Finance Australia.
https://www.miragenews.com/insight-austrade-and-export-finance-australia-help-de...


Afreximbank okays $500m for Nigerian manufacturers

(Business AM, Lagos, 4 September 2019) The African Export-Import Bank (Afreximbank) has approved a $500 million facility to enable Nigerian manufacturers take full advantage of the opportunities offered by the African Continental Free Trade Agreement (AfCFTA). Benedict Oramah, its president & chairman of board of directors of Afreximbank  said the $500 million facility was aimed at providing financing to Nigerian manufacturers and companies engaged in intra-African trade under the AfCFTA, which implementation begins in 2020. AfCFTA seeks to create a continental trade bloc of 1.2 billion people, with a combined gross domestic product (GDP) of about $3 trillion.

https://www.businessamlive.com/afcfta-afreximbank-okays-500m-for-nigerian-manufa...


Abu Dhabi's ADFD launches ECA

(The National, Abu Dhabi, 9 September 2019) Abu Dhabi has launched an export credit agency that will provide guarantees and finance to overseas buyers of UAE goods and services, as the emirate looks to diversify its economy and develop non-oil revenue lines. Abu Dhabi Fund for Development (ADFD), an autonomous national entity affiliated with the emirate’s government, will own and operate Abu Dhabi Exports Office (Adex), which was established through consultation with the Export–Import Bank of Korea. The UAE, which accounts for about 4.5 per cent of the global oil production, is transforming its economy by strengthening its non-oil exports to generate new revenue.

https://www.thenational.ae/business/economy/abu-dhabi-s-adfd-launches-export-cre...


Iran's ECA Covers $1b Exports in 5 Months

 (Financial Tribune, Tehran, 1 September 2019) The Export Guarantee Fund of Iran covered non-oil exports worth $1 billion in the first five months of the current fiscal year (started in mid-March), head of EGFI said.The figure shows 60% growth in the export credit agency insurance cover compared to the similar period last year, according to EGFI website.EGFI expects to increase coverage to $2.5 billion by the end of this fiscal year [March 2020), Afrouz Bahrami told a seminar on promoting exports during sanctions. According to media reports, EGFI is able to cover export risk to the tune of $2.3 billion or 5% of the Iran’s $40 billion non-oil export market. She ascribed the significant growth in the performance of EGFI to increase in the number of applications for covering risk emanated from US sanctions, diversification of guarantee services, customizing services to make them compatible with expert requirements and rising promotional activity of the fund.

https://financialtribune.com/articles/business-and-markets/99686/irans-eca-cover...


India, Russia identify new prospects for ECA led cooperation

(Elets Technomedia, Noida Uttar Pradesh, 4 September 2019) With bilateral trade between India and Russia showing a robust growth, growing by 17% to $ 11 billion in 2018 alone, Russian Export Centre (REC) is focusing on providing a wide range of financial and non-financial support in order to realize the full potential of the bilateral trade between the two countries by improving export conditions and leveling existing trade barriers. Russian Agency for Export Credit and Investment Insurance (EXIAR JSC) and ROSEXIMBANK JSC, are the shareholders in REC.

https://egov.eletsonline.com/2019/09/india-russia-identify-new-prospects-for-bil...


What's New August 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.

  • Export Development Canada: Out from the shadows
  • Civil society groups call for an accountability mechanism for the Equator Principles
  • US Exim: A decade-long renewal or axe it entirely?
  • US Export-Import Bank Hopes to Finance US$5 B Mozambique LNG project
  • South Africa: European governments ‘must pay back the arms deal money’
  • Tiny Timor-Leste Needs Gas and China's All Too Eager to Help
  • Russian Export Center to support Belarus' export to third countries
  • Bauxite exports from Guinea to UAE begin with ECA support
  • KfW IPEX-Bank arranges €2.6bn financing for Dream Cruises newbuilds
  • China Everbright invites TDB to co-manage $1bn energy fund
  • Etihad Credit Insurance inks MoU with South Africa’s export credit agency
  • Iran's Private Firms Want Stronger Export Credit Agency
  • African Trade Insurance Agency (ATI) signs MoUs with Japanese banks and NEXI

Export Development Canada: Out from the shadows

(Above Ground, Ottawa 29 August 2019) For decades, Export Development Canada (EDC) has been subject to minimal public scrutiny, with media and Parliament rarely asking questions about the social and environmental costs of the business it supports. But recently, with some of the agency’s highest-profile clients facing charges of wrongdoing, that’s started to change, prompting reporters and lawmakers to question EDC’s screening practices. EDC is one of the largest export credit agencies in the world, providing roughly $100 billion in loans, insurance and other financial services to Canadian and foreign companies every year. It facilitates business in nearly every sector, including those widely recognized as high-risk for corruption, human rights abuse and environmental harm. Last year over 40 percent of EDC’s support went to companies involved in oil and gas, mining, construction and infrastructure. EDC’s track record of questionable business deals goes back decades. Without strong oversight of EDC’s operations, the government runs the risk of facilitating harmful and illegal activities that are too often present in these industries. It also risks putting Canada in breach of its international obligations, such as its duty to avoid contributing to human rights abuse.

https://aboveground.ngo/eye-on-edc/


Civil society groups call for an accountability mechanism for the Equator Principles

(Bank Track, Nijmegen, 27 August 2019) 79 civil society organisations and partners have submitted a joint statement to the Equator Principles Association (EPA) and signatory banks expressing disappointment that the current review process of the Equator Principles does not go far enough to strengthen accountability and ensure access to remedy. With the EPA currently revising the fourth iteration of the Equator Principles, the “EP4” review should be a moment of ambition for advancing accountability in project finance. Other notable submissions to the Equator Principles review process have also been made by the Investor Alliance for Human Rights and First Peoples WorldwideSince a number of ECAs subscribe to the Equator Principles too, and ECAs also use the underlying IFC Performance Standards as a benchmark, this joint statement is relevant to ECA practices as well.

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


US Exim: A decade-long renewal or axe it entirely?

(Global Trade Review, London, 16 August 2019) Two US senators have proposed a bill to reauthorise the US Export-Import Bank (US Exim) for 10 years over the traditional four, as the bank’s expiry date of September 30 inches closer. The plan, which is gaining widespread support and attention across the US and comes after legislation negotiated by House Financial Services chairwoman Maxine Waters flopped, also increases US Exim’s exposure cap over seven years to US$175bn from US$135bn. After regaining its full lending powers in May to the delight of exporters across the US and the dismay of republicans in Congress who see EXIM as “corporate welfare” which only benefits large businesses looking to score overseas sales, the expiry date for US Exim is now creeping up as its charter must be renewed, or indeed axed, next month. “With 95% of our customers located overseas, competitive export financing is critical to maintaining a level playing field with our competitors. Boeing supports reauthorising the Export-Import Bank, which helps US manufacturers create jobs and compete in a global market,” a spokesperson for Boeing tells GTR in response to the approaching expiry date. Boeing intends to offer financial services to some of its international clients if Congress doesn’t give approval for further operations, the Wall Street Journal reported.

https://www.gtreview.com/news/americas/us-exim-a-decade-long-renewal-or-axe-it-e...


US Export-Import Bank Hopes to Finance US$5 B Mozambique LNG project

(AllAfrica, Maputo, 25 August 2019) The Board of Directors of the Export-Import Bank of the United States (EXIM US) has voted to notify the US Congress of its consideration of a five billion dollar loan to support the export of US goods and services for the development of the liquefied natural gas (LNG) project on the Afungi Peninsula, in Palma district, in the northern Mozambican province of Cabo Delgado. EXIM US estimates that the US$5 B loan "could support an estimated 16,400 American jobs over the five-year construction period. Through follow-on sales, thousands of additional jobs may be generated across the United States" and "through fees and interest earned, the transaction also could create more than 600 million dollars in revenue for U.S. taxpayers". The borrower would be the Mozambique LNG1 Financing Company, whose owners include the Anadarko Petroleum Company, which heads the consortium developing Area One of the Rovuma Basin, including the construction of the gas liquefaction factories on the Afungi Peninsula. Anadarko was recently purchased by another US company, the Occidental Petroleum Corporation. A 2016 Friends of the Earth report (pdf) noted that: "With their farmland and fishing grounds being taken by multinational corporations, entire communities will lose their homes, land, and livelihoods. Locals will receive very few jobs, and an influx of workers from other countries and other parts of Mozambique will likely bring an increase in diseases, including sexually transmitted infections, and place a strain on already limited health-care and education resources. Friends of the Earth further notes that “By approving $5 billion in fossil fuel financing, EXIM is accelerating the climate crisis while causing local environmental damage and propelling human rights violations in Mozambique,”

https://allafrica.com/stories/201908260219.html


South Africa: European governments ‘must pay back the arms deal money’

(The Citizen, Johannesburg, 22 August 2019) The North Gauteng High Court in Pretoria has set aside the findings of the Seriti commission on Wednesday, delivering a scathing judgment that it had failed in fulfilling its mandate. The High Court judgment on the findings of the commission lamented that the arms deal inquiry had never been set up to investigate the truth, but only to clear the names of those implicated. Long-time critic Terry Crawford-Browne said yesterday that South Africa should cancel all still-outstanding arms deal contracts, return all purchased goods – including the fighter aircraft – and recover the stolen money from the arms deal. This includes cancellation of still-outstanding arms deal commitments, such as the 20-year Barclays Bank loan agreements for the BAE Hawk and BAE/Saab Gripen fighter aircraft that are guaranteed by the British government’s Export Credit Guarantee Department (now known as UK Finance),” he said.

https://citizen.co.za/news/south-africa/crime/2169854/european-governments-must-...


Tiny Timor-Leste Needs Gas and China's All Too Eager to Help

(Bloomberg, Suai, 28 August 2019) Colonized by Portugal, invaded by Indonesia, suckered by Australia, Timor-Leste doesn’t need another abusive relationship. But the clock is now ticking for Timor-Leste to find international funding for a $12 billion energy project so work can start before its existing oil cash cow — a separate nearby gas field — becomes defunct as soon as 2021. Royal Dutch Shell Plc and ConocoPhillips have given up on the project after more than two decades, selling their stakes back to the government last year. Twenty years on from a referendum that brought independence from Indonesia after a brutal quarter-century conflict killed an estimated 100,000 people, Timor-Leste’s birthing pains are evident everywhere. With almost half its 1.2 million people living in poverty, the aging war heroes still in charge are now betting big on a risky energy project that could draw one of the world’s youngest nations into a wider geopolitical tussle between the West and China. Fitch Solutions estimates the project, which has been under negotiation for more than a decade, has enough reserves to yield $50 billion in revenue at today’s prices—more than 15 times the country’s gross domestic product. But there’s one big problem: President Gusmao, 73, has insisted the project is built onshore to create much-needed jobs. For energy giants, that’s unfeasible because it requires laying pipeline across a trough to depths of 3,300 meters. That’s making the U.S. nervous China will use debt as a way in to bolster its regional footprint. Timor Gap, which is responsible for developing the on-shore part of Tasi Mane, says it’s arranging $9 billion of the $12 billion needed to fund the Greater Sunrise project, and it’s agnostic about where the money will come from. It’s denied media reports that the funds would come from Export-Import Bank of China. See also Timor-Leste Should Beware China's Belt and Road.

https://www.bloomberg.com/news/features/2019-08-28/timor-leste-gas-development-i...


Russian Export Center to support Belarus' export to third countries

(Belarus News, Minsk, 21 August 2019) The Russian Export Center intends to support Belarus-Russia integration projects on advancing to the markets of third countries. Plans are in place to sign a cooperation agreement with Eximgarant of Belarus, which will help lower costs of financing thanks to reducing the number of intermediaries, and will facilitate development of trade and export operations. One of the promising cooperation areas is promoting export to Egypt. The Russian Export Center has been authorized to implement the project to establish a Russian industrial zone in Egypt. It provides for setting up an industrial facility of 525 hectares in the East Port Said Industrial Zone located in the Suez Canal Special Economic Zone. The project will enable Russian exporters and suppliers to localize production in Egypt. The Russian Export Center is ready to support Belarusian enterprises which eye the African market. The Russian Export Center is a state institute established to support non-commodity export. Last year, the center provided around $19 billion to promote Russian export, and $1.33 billion to finance joint trade operations with Belarus.

https://eng.belta.by/economics/view/russian-export-center-to-support-belarus-exp...


Bauxite exports from Guinea to UAE begin with ECA support

(Emirates News Agency, Abu Dhabi, 5 August 2019) The UAE's Emirates Global Aluminium (EGA) today announced the first exports of bauxite ore from Guinea Alumina Corporation (GAC), its mining project in Guinea in West Africa, marking the completion of EGA’s strategic expansion upstream in the aluminium value chain to create an integrated global aluminium giant. The GAC project, and UAE's Abu Dhabi Al Taweelah alumina refinery, where production began April, create new revenue streams and secure raw materials that the UAE’s aluminium industry needs. The GAC project cost some US$1.4 billion to develop with a $750 million loan taken from development finance institutions, export credit agencies, and international commercial banks. EGA invested some $3.3 billion to develop the Al Taweelah refinery, the first in the UAE and  only the second in the Middle East. GAC’s operations include a mine, railway infrastructure, and port facilities. It is expected to produce some 12 million tonnes of bauxite ore per year at full design capacity, equivalent to the weight of two Great Pyramids of Giza. Guinea is the world’s largest exporter of bauxite.

https://www.wam.ae/en/details/1395302778838


KfW IPEX-Bank arranges €2.6bn financing for Dream Cruises newbuilds

(Seatrade Cruise News, Colchester, 16 August 2019) KfW IPEX-Bank is leading a consortium to structure the financing for Genting Hong Kong’s two newbuilds for Dream Cruises at the MV Werften shipyard. The multi-ECA financing package comprises around €2.6bn toward the total cost of €3.1bn for the first two Global-class ships. Their deliveries are now scheduled for early 2021 and early 2022, instead of late 2020. The financing will be backed by export credit guarantees from Germany, the Finnish export credit agency Finnvera and the state of Mecklenburg-Western Pomerania, home to MV Werften. It also benefits from the commercial interest reference rate for ships in accordance with the OECD consensus.

https://www.seatrade-cruise.com/news/news-headlines/kfw-ipex-bank-arranges-e2-6b...


China Everbright invites TDB to co-manage $1bn energy fund

(The Mast, Livingstone, 28 August 2019) Zambia's Trade Development Bank has been invited by a Chinese investment group, China Everbright,  as co-managers of a US$1 billion Green Fund which will focus on green energy projects in Africa. The TDB, an Eastern and Southern African developmental bank founded in Zambia 35 years ago, has also signed a $350 million 10-to-20-year export credit line with Japan Bank for International Corporation (JBIC). Admassu Tadesse, the bank’s president and chief executive officer, said with this the TDA, would be glad to join in the development of the Batoka Gorge Hydro-Power Dam Project in Mukuni’s chiefdom. Part of the credit line will be covered by Nippon Export and Investment Insurance (NEXI), one of Japan’s two official export credit agencies, with JBIC.

https://www.themastonline.com/2019/08/28/china-everbright-invites-tdb-to-co-mana...


Etihad Credit Insurance inks MoU with South Africa’s export credit agency

(Thomson Reuters Middle East, Dubai, 28 June 2019) UAE – Etihad Credit Insurance (ECI) has signed a memorandum of understanding with South Africa’s Export Credit Insurance Corporation (ECIC) to explore, strengthen, and enhance the bilateral trade and economic relations between the UAE and South Africa.

https://www.zawya.com/mena/en/economy/story/Etihad_Credit_Insurance_inks_MoU_wit...


Iran's Private Firms Want Stronger Export Credit Agency

(Financial Tribune, Tehran, 17 August 2019) In a letter to President Hassan Rouhani, private sector representatives have called on government to give more authority to the Export Guarantee Fund of Iran with regard to issuing export guarantees, according to the EGFI chief. The export credit agency says it can provide export guarantees to non-oil exporters to substitute banks’ letters of credit at a time when the economy is saddled with mounting economic and banking restrictions imposed by the United States.

https://financialtribune.com/articles/business-and-markets/99467/irans-private-f...


African Trade Insurance Agency (ATI) signs MoUs with Japanese banks and NEXI

On the side lines of the Tokyo International Conference of Africa’s Development (TICAD7), ATI signed MoUs with Japan’s three largest banks and Nippon Export and Investment Insurance (NEXI), Japan’s export credit agency; ATI and NEXI announced at TICAD7 the launch of a Japan Desk to be based in ATI’s Nairobi headquarters in order to provide tailored risk-mitigation support to Japanese companies and investors; ATI has a current pipeline of over US$1 Bn worth of transactions from Japanese banks.

https://www.africanews.com/2019/08/30/african-trade-insurance-agency-ati-nippon-...


What's New July 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!

£7.8bn of UK foreign aid and export credit spent on fossil fuel projects

 (Guardian, London, 23 July 2019) The British government has spent £680m of its foreign aid budget on fossil fuel projects since 2010, according to analysis that highlights the UK’s failure to align diplomatic, trade and aid policies with the goals of the Paris climate agreement. Britain allocated more overseas development cash to oil and gas in the two years after signing the 2015 agreement than it had in the previous five, according to the study commissioned by the Catholic development agency Cafod and carried out by the Overseas Development Institute. From 2010-17 the UK provided £7.8bn in financial support to foreign energy projects through a mixture of overseas development assistance, export credit guarantees and other official funding flows. The report says 60% of this total went on fossil fuels. Most of this came in the form of export credit guarantees by UK Export Finance. An earlier analysis by DeSmog UK, an investigative environmental journalism outlet, found an elevenfold increase in UK Export Finance support for overseas fossil fuel projects last year, including oil and gas operations in Oman, Kuwait and Brazil.

https://www.theguardian.com/environment/2019/jul/23/680m-of-uk-foreign-aid-spent...


Chinese ECA underwrites US$46 bln Chinese firms' businesses in Africa

(Xinhua, Beijing 2 JJuuly 2019) China Export & Credit Insurance Corporation has underwritten 46.08 billion U.S. dollars worth of insured businesses made by Chinese enterprises in Africa from 2018 to the end May of this year, China Securities Journal reported. Of the total, the insurer offered 26.27 billion U.S. dollars of short-term exports credit insurance and 10.11 billion U.S. dollars of medium-and long-term export credit insurance for exporters, said the paper quoting the latest data from the corporation. The company's insurance for overseas investment totaled 9.7 billion U.S. dollars in the period. During the period, the insurer paid compensation worth of 260 million U.S. dollars for companies in multiple sectors, including railways, roads, power, medicare and education.

http://www.xinhuanet.com/english/2019-07/02/c_138192475.htm


UAE ECA and Italy partner with Chinese financial institutions to boost trade

(Islamic Business and Finance, Dubai, 25 July 2019) UAE ECA Etihad Credit Insurance (ECI) has signed partnership agreements with China Export and Credit Insurance Corporation (SINOSURE), Industrial and Commercial Bank of China (ICBC) and Bank of China to boost trade, investments and bilateral exports between the UAE and China. Under the agreement between ECI and SINOSURE, both countries agreed to collaborate in the areas of insurance and co-insurance, commercial information and credit opinion sharing as well as Shari’ah-compliant solutions, trade promotions and SME programmes. According to the Ministry of Economy, China is the UAE’s main non-oil commodities trade partner accounting for 9.7 per cent of the non-oil bilateral trade in 2018, estimated at over $43 billion. China and Italy have also agreed to enhance financial market cooperation and promote two-way financial market access with support for a cooperation mechanism between their export credit agencies, leading enterprises and financial institutions to provide tailored financing-insurance solutions for cooperation.

https://www.islamicbusinessandfinance.net/en/home/articles/eci-partners-with-thr...


'Hidden debts’ reveal risks of China’s lending spree

(Asia Times, Hong Kong, 23 July 2019) China's US$1 trillion Belt and Road Initiative, along with other foreign funding, has become a magical mystery tour, baffling the World Bank and the International Monetary Fund. Or, according to critics, a diplomatic car crash waiting to happen. “Compared with China’s dominance in world trade, its expanding role in global finance is poorly documented and understood,” a report released last week by the Kiel Institute for the World Economy, noting that "Over the past decades, China has exported record amounts of capital to the rest of the world". Many of these financial flows are not reported to the IMF, the BIS [the Bank for International Settlements] or the World Bank.” China is now the world’s largest creditor. A breakdown of the numbers showed that lending soared to around US$5 trillion by 2018 from roughly $500 billion in 2000, which dwarfs World Bank and IMF credit lines. China is not part of the OECD Export Credit Group, which provides data on long- and short-term trade credit flows. In the past 18 months, the venture has been mired in controversy after being branded a “debt trap” by the US and its key Western allies. The ruling Communist Party has announced plans to expand its anti-corruption campaign to BRI projects. The Central Commission for Discipline Inspection (CCDI) had limited involvement in the program but that is starting to change and its Director General for international cooperation has stated “[We aim to] create a network of law enforcement of all these Belt and Road countries”. Asia Times askes "Will this long and winding road finally have flashing warning signs of “debt” and “corruption?” Or will this continue to be a highway to economic hell? BRI nations might want to buckle up for a bumpy ride."

https://www.asiatimes.com/2019/07/article/hidden-debts-reveal-risks-of-chinas-le...


Behind Russia’s growing influence in Africa

(The Independent, Kampala, 8 July 2019) Russia hosted the Annual General Meeting for the African Export Import Bank (Afreximbank) on June 20-22, the second AGM to be held out of Africa since 2012 in China. The Russian Export Center (REC), purchased shares in Afreximbank in 2017 at an undisclosed amount, becoming the bank’s third-largest non-African financial institution. As Russia’s President, Vladimir Putin, hosts more than 50 African presidents for the first-ever Russia-Africa Summit in Sochi on Oct. 24, top on the agenda will be how to sustain the economic and political ties between the two trading blocs in the wake of declining oil prices and increasing isolation of the transcontinental nation. Whereas Russia’s presence in Africa had weakened in the 1990s, the country had since then done a great deal of groundwork on joint projects in geology and mining, energy, industry, agriculture, fishing and telecommunications, with total investments now standing at US$20bn. Russia’s economy has been on a standstill for a while, with statistics showing that from 2014 to 2018, its GDP grew at an average of 0.4% per annum, with real disposable incomes declining by 10.7% leaving 19 million of the 145 million Russian population in poverty during the same period. On the other hand, Africa’s GDP has been growing at an average of more than 3%, making it one of the fastest growing regions in the world. Moscow, which had a strong influence in Africa alongside US and China, had frozen its relations with the continent following the collapse of the USSR in 1991. It however remains to be seen how far Russia’s reconnection with the continent will go given that China, India, and especially the United States have intensified their involvement in Africa over the last three decades. Russia’s export values to Africa have nearly doubled over the last five years from US$9.3bn in 2014 to US$17.5bn in 2018 while Russian imports from Africa have stagnated, increasing from merely US$2.8bn to US$2.9bn during the same period. Most of Russia's exports to Africa are medicine, food, forestry products, automotive and mixed fertilizer. Since 2015, according to the Swedish Defence Research Agency, Russia has signed over 20 bilateral military cooperation agreements with African states including; Rwanda, Tanzania, Burkina Faso, Burundi, Guinea. Between 2012 and 2016, Russia had become the largest supplier of arms to Africa, accounting for 35% of arms exports to the region, followed by China (17 %), the United States (9.6%), and France (6.9 %).  Some of Russia’s companies that have made inroads in Africa include; Gazprom, Lukoil, Rostec and Rosatom, with most of their operations in Uganda, Algeria, Angola, Egypt and Nigeria. Egypt has also finalised negotiations with Moscow to build the country’s first nuclear plant, while in Namibia, Moscow is developing one of the world’s largest deposits of platinum group metals.

https://www.independent.co.ug/behind-russias-growing-influence-in-africa/


Federal review of EDC finds inadequate disclosure practices

(Globe and Mail, Toronto, 2 July 2019) A federal review of Export Development Canada has exposed serious shortcomings at the Crown corporation, noting its disclosure practices fall far short of other financial institutions, and that the agency is not legally obligated to consider the environmental or human-rights impact of the financial support it provides to exporters. The findings underscore concerns uncovered in a recent Globe and Mail investigation. The Globe reported that the EDC’s client roster includes companies that have faced allegations concerning corruption, human-rights violations and environmental abuses; the federal agency has demonstrated a tendency to continue supporting such companies after other financial institutions have sanctioned them or cut them loose. Critics have also raised concerns about transparency and federal oversight of the Crown corporation. “Ottawa must impose rules on this Crown corporation to make it transparent and accountable,” Lori Waller, spokesperson for Ottawa-based human rights group Above Ground, said in a statement. “Without strong oversight of its export credit agency, the government risks profiting from harmful and illegal business activities. The law should prohibit EDC from supporting companies involved in corruption, human rights abuse or environmental harm.”

https://www.theglobeandmail.com/canada/article-federal-review-slams-export-devel...


EDC lifts "closed" status on Saudi Arabia-related business

(Reuters, Toronto, 3 July 2019) Canada's export credit agency has lifted a "closed" status on Saudi Arabia-related activity after almost a year of frosty relations between the two countries, citing improved business conditions in the Middle Eastern kingdom. The move by Export Development Canada (EDC) on Tuesday paves the way for the state-owned enterprise to resume support for exporters and investors in Saudi Arabia. Saudi Arabia in August suspended new trade and investment with Canada after it urged Riyadh to release arrested civil rights activists, leading to a trade freeze and expulsion of diplomats. "After monitoring for several months we made the decision that business conditions have improved," Amy Minsky, a senior advisor at EDC, said on Wednesday. She noted that risk remains and there was not necessarily more business in the Saudi Arabian market. The EDC said its position on a country is determined among other things, by the Canadian government's assessment of "political, human rights and corruption risks."

https://www.nasdaq.com/article/canada-export-agency-lifts-closed-status-on-saudi...


EDC claims review clears them of SNC-Lavelin transaction wrongdoing

(iPolitics, Ottawa 25 July 2019) Canada’s export credit agency says a third-party investigation has cleared the organization of any wrongdoing in providing a political risk insurance policy to SNC-Lavalin in 2011 for a dam project in Angola. EDC said Thursday a review by international law firm Fasken failed to find evidence to support allegations that the corporation turned a blind eye to illegal payments allegedly made by SNC-Lavalin to someone it had retained to help secure a $250-million project repairing the hydroelectric Matala Dam. The allegations were first reported by the CBC earlier this year, citing an unnamed SNC-Lavalin insider. They came as the engineering and construction firm faced intense scrutiny for lobbying the upper-echelons of the Trudeau government to broker a deal that would allow it to avoid a criminal trial for bribery charges relating to its work in Libya.

https://ipolitics.ca/2019/07/25/third-party-review-clears-edc-of-wrongdoing-in-s...


As Brexit Looms, UK Doubles ECA Credit To Nigeria

(Sahara Reporters, New York, 24 July 2019) With Boris Johnson, who promised to take the United Kingdom out of the European Union without a deal if necessary now the country's prime minister, the United Kingdom Export Finance (UKEF), has increased the export credit finance agreement it signed with Nigeria in February 2018 by £500 million. In a statement made available to SaharaReporters, UKEF said it had also signed a Memorandum of Understanding with the Nigeria Export-Import Bank (NEXIM) that will "foster greater cooperation in trade through co-financing in the form of guarantees and insurance". In the last ten years, UKEF has enabled companies in Britain to export goods worth £76.5 billion to emerging markets like Nigeria. In 2018 alone, the agency provided guarantees worth £6.8 billion to 181 companies in 72 countries— its best result in 28 years.

http://saharareporters.com/2019/07/24/brexit-looms-uk-doubles-export-finance-cre...


The Poseidon Princples: Will They Affect ECAs?

(Hellenic Shipping News, Cyprus, 2 July 2019) The Poseidon Principles launched on the 18 June 2019, with founding signatories including Citi, DNB, Societe Generale, ABN Amro, Amsterdam Trade Bank, Credit Agricole CIB, Danish Ship Finance, Danske Bank, DVB, ING and Nordea. Together they have a combined shipping loan portfolio of c. US$100bn – roughly 20% of the global total. Additional banks are expected to join them in the near future and it is hoped that ship lessors and financial guarantors including export credit agencies will also become signatories to the Poseidon Principles. The Poseidon Principles establish a global framework for assessing and disclosing whether ship finance portfolios align with the International Maritime Organisation‘s (“IMO”) goal of reducing shipping’s total annual greenhouse gas emissions by at least 50% by 2050.

https://www.hellenicshippingnews.com/the-poseidon-princples-will-they-affect-me/


U.S. Senate targets Ex-Im support for Saudi nuclear technology

(Foreign Policy, Washington, 30 July 2019) A bipartisan group of lawmakers is introducing new legislation aimed at restricting the transfer of nuclear technology to Saudi Arabia, the latest sign of growing congressional backlash to the Trump administration’s close relationship with the wealthy Gulf nation. The bill, put forward by Democratic Sen. Chris Van Hollen and Republican Sen. Lindsey Graham, would bar the U.S. Export-Import Bank from financing the transfer of nuclear technology and equipment to Saudi Arabia, absent nuclear cooperation agreements, and adopting restrictive international standards to safeguard against nuclear proliferation. The Export-Import Bank plays a key role in funding the export of U.S. nuclear energy equipment and technology abroad.

https://foreignpolicy.com/2019/07/30/us-senate-targets-saudi-nuclear-technology-...


Foreign beer lovers get tanked with EXIM assistance

(Craft Brewing Business, Akron, 10 July 2019) Craft breweries are promoting Maine beers in international markets via the world’s largest mobile kegerator a 40-foot refrigerated shipping container which packs in 78 on tap beer tanks and carries local Maine beers to far-away destinations. Its maiden voyage was a trip to Iceland 3 years ago and traveled to Leeds, England last fall. All 4 participating breweries ended up with significant orders for their beer overseas. Traveling as one of many breweries on the Beer Box is one thing, but exporting tens of thousands dollars of beer overseas as an individual brewer can be challenging and exposes the company to risk and financing challenges. EXIM insurance policies allowed peace of mind to these small Maine companies regarding their greatest fear – not getting paid."

https://www.craftbrewingbusiness.com/featured/how-maine-craft-breweries-grew-the...


What's New June 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.

  • MPs make unprecedented call for end to UKEF overseas fossil fuel support
  • Despite climate pledges, G20 coal subsidies rise
  • See no evil: How EDC is bankrolling companies accused of bid-rigging, graft and human-rights violation
  • Chinese Banks and ECAs Court African Governments
  • Europe’s German-speaking ECAs ink collaboration pact
  • Japanese, US & Australian ECAs begin own 'Belt and Road' in South Pacific
  • Waters backs down in Ex-Im fight after internal struggle
  • U.S. lags in export financing arms race fueled by China: EXIM report
  • Kenyan court blocks Chinese ECA backed power plant on environment grounds
  • Norwegan ECA blacklists shipbuilders over human rights abuses
  • Banks with a combined $100bn shipping portfolio stimulate green change
  • Public and targeted consultations on EU short-term ECA rules

MPs make unprecedented call for end to UKEF overseas fossil fuel support

(EU Today, London, 9 June 2019) For the first time, a Parliamentary committee has called for an end to taxpayer support for overseas fossil fuel projects. The Government must move immediately to end UKEF’s fossil fuel support, or all its talk of a ‘climate emergency’ will be seen as hollow words. The UK Government must act on today’s report by parliament’s Environmental Audit Committee about UK Export Finance, which calls for an end to UK taxpayer support for overseas fossil fuel projects by 2021. UK Export Finance (UKEF), the UK’s export credit agency, underwrites loans and insurance for export deals as part of efforts to help British business overseas. Global Witness was instrumental in calling for Parliament’s Environmental Audit Committee to set up the inquiry into UKEF. (26 June 2019, edie newsroom) Thousands of campaigners across the UK are marching today towards Parliament in a bid to urge MPs and the Government to strengthen commitments to tackling climate change, just days after the House of Commons approved draft recommendations for a national net-zero target.

https://eutoday.net/news/environment/2019/mps-make-unprecedented-call-for-end-to...


Despite climate pledges, G20 coal subsidies rise

(Reuters, London, 24 June 2019) Despite promising a decade ago to phase out fossil fuel subsidies, the world’s leading economies more than doubled subsidies to coal-fired power plants over three years, putting climate goals at risk, energy researchers said Tuesday. Between 2014 and 2017, G20 governments more than halved direct support for coal mining, from $22 billion to about $10 billion on average each year, according to a report by the London-based Overseas Development Institute (ODI), a think tank. But over the same period they boosted backing for coal-fired power plants - particularly supporting construction of the plants in other, often poorer nations - from $17 billion to $47 billion a year. While spending from national budgets on coal fell, as did tax breaks for it, other forms of support - from development finance institutions, export-credit agencies and state-owned enterprises - soared. Four countries alone, the UK, France, Canada and Ireland have all formally recognised a climate crisis but analysis shows they give $27.5bn annually in support for coal, oil and gas, much of it via ECAs.

https://www.reuters.com/article/us-climate-change-coal-subsidies/despite-climate...


See no evil: How EDC is bankrolling companies accused of bid-rigging, graft and human-rights violation

(Globe and Mail, Toronto, 4 June 2019) Export Development Canada once described itself as the country’s ‘secret trade weapon.’ But The Globe’s review of thousands of transactions reveals a pattern of secrecy and lax supervision. In Latin America, billions of dollars in Canadian government-backed loans have been funnelled to two of the region’s most notorious oil companies: the state-owned petroleum corporations of Mexico and Brazil, each riddled with frequent reports of bribery, bid-rigging and inflated contracts. In Africa, hundreds of millions of dollars in financing has been channelled to companies at the heart of South Africa’s worst postapartheid corruption scandal: the state-owned freight rail monopoly and the business empire of the infamous Gupta brothers, whose relationship with ex-president Jacob Zuma triggered a public inquiry into state corruption. And in Canada, billions of dollars in federal export loans have gone to support transactions that benefit Bombardier Inc. and SNC-Lavalin Group Inc., two companies that have been cited in corruption investigations in Asia, Africa and Europe. SNC-Lavalin’s head of compliance says the firm is still hoping to reach an out-of-court settlement on bribery, fraud charges.  EDC has declared itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed.

https://www.theglobeandmail.com/canada/article-export-development-canada-investi...


Chinese Banks and ECAs Court African Governments

(Peace FM Online, Accra, 25 June 2019) African Foreign Ministers attending the Forum for China-Africa Cooperation (FOCAC) Coordinators’ meeting in Beijing yesterday met Chinese financial institutions who introduced them to their array of financial products. This is in line with Chinese President Xi Jinping’s [2015 and then 2018] $60 billion pledge in financial support to African countries. The breakdown showed that $5 billion was free aid and interest-free loans, while $35 billion was for preferential loans and export credit on more favourable terms, and five billion dollars for additional capital for the China Africa development fund. Five billion dollars was also up for initial capital of special loans for the development of African small to medium enterprises each, and $10 billion for China-Africa production capacity cooperation fund.

http://www.peacefmonline.com/pages/business/economy/201906/385516.php


Europe’s German-speaking ECAs ink collaboration pact

(Global Trade Review, London, 19 June 2019) Hermes, OeKB and Serv – the export credit agencies (ECAs) of Germany, Austria and Switzerland respectively – have agreed to join forces to improve opportunities for their exporters in the face of increased competition from Asia. While the statement doesn’t call out China by name, Chinese export credits have long been seen as a competitive threat by Europe’s ECAs. China is not a member of the OECD and is therefore not obliged to comply with the OECD guidelines that stipulate the financial terms and conditions that its members may offer, leaving scope for an unfair advantage for Chinese exporters.

https://www.gtreview.com/news/europe/europes-german-speaking-ecas-ink-collaborat...


Japanese, US & Australian ECAs begin own 'Belt and Road' in South Pacific

(Kikkei Asian Review, Tokyo, 25 June 2019) Japan, the U.S. and Australia have picked a liquefied natural gas project in Papua New Guinea as their first case for joint financing in the Indo-Pacific region, planning to lend over $1 billion, Nikkei has learned. Three government-backed lenders -- Japan Bank for International Cooperation, the U.S. Overseas Private Investment Corp. and Australia's Export Finance and Insurance Corp. -- plan to issue a statement on Tuesday regarding their joint infrastructure efforts. The three countries agreed in November to join hands in financing infrastructure projects in the Indo-Pacific to offer an alternative to China's Belt and Road initiative. The LNG project in Papua New Guinea marks the first project in this three-way cooperation.

https://asia.nikkei.com/Politics/International-relations/Japan-US-and-Australia-...


Waters backs down in Ex-Im fight after internal struggle

(Politico, Washington, 26 June 2019) House Financial Services Chairwoman Maxine Waters (D-CA) on Wednesday shelved a bipartisan Export-Import Bank bill that sparked a fierce backlash from her own caucus. The original compromise she drafted with Patrick McHenry (R-N.C.) ignited criticism from a wide swath of the Democrats on the committee — centrists and progressives alike, from the most senior members to newly elected freshmen, including Rep. Alexandria Ocasio-Cortez (D-N.Y.), who objected to new restrictions that would be imposed on the bank and big manufacturers such as Boeing, that benefit from its loan guarantees, as well as the lack of tougher environmental safeguards for energy projects financed abroad. Reps. Ocasio-Cortez and Rashida Tlaib (D-Mich.) were preparing to offer amendments that would impose new limits on the agency's financing of fossil fuel power plants abroad with the political backing of dozens of environmental groups. Limits on sales to China were a must-have for McHenry, who argued that it was a way to curb what he saw as a subsidy for an economic competitor. The bank is only now returning to full operation after years of being hobbled by conservative Republican lawmakers who criticized the agency as engaging in "crony capitalism" and posing a risk to taxpayers, even though it returns money to the Treasury. McHenry had predicted a strong Republican vote in favor of the bill thanks to the compromises Waters agreed to, while disgruntled Democrats were frustrated that Waters negotiated the bill with the Republicans and expected Democrats to fall in line without more of their input.

https://www.politico.com/story/2019/06/26/maxine-waters-emport-import-bank-13837...


U.S. lags in export financing arms race fueled by China: EXIM report

(Reuters, Washington, 28 June 2019) China provided as much as $130 billion in government export financing support in 2018, dwarfing every other country and fueling a new export lending arms race, the U.S. Export-Import Bank said in a report on Friday. In the last full year that EXIM had complete lending powers, fiscal 2014, the agency provided $20.5 billion in financing support for $27.5 billion worth of U.S. exports. During the fiscal year ended Sept. 30, 2018, EXIM authorized only $3.3 billion in financing, supporting $6.8 billion worth of U.S. exports, according to EXIM’s most recent annual report. EXIM has been a popular target for conservatives, who have branded it as a provider of “corporate welfare” and “crony capitalism.” The reinstatement of its lending powers is a boon for large U.S. manufacturers such as Boeing Co (BA.N), General Electric (GE.N) and Caterpillar Inc (CAT.N), which can once again offer U.S.-government-backed financing for overseas customers.

https://www.reuters.com/article/us-usa-trade-china-finance/u-s-lags-in-export-fi...


Kenyan court blocks Chinese ECA backed power plant on environment grounds

(Financial Times, London, 27 June 2019) A Kenyan court has halted construction of the country’s first coal-fired power station on environmental grounds in a blow for the $2bn project’s Chinese backers and the green credentials of China’s Belt and Road Initiative. Owned by the Kenya-based Amu Power and funded with export credit from the Industrial and Commercial Bank of China, the contentious project has sparked a heated debate in Kenya about the potential impact of coal-based power on the country’s ecosystem. Located on Kenya’s Indian Ocean coast approximately 14 miles north of Lamu town, a tourist destination and Unesco World Heritage site, environmentalists say the plant will pollute the air and destroy mangroves and the breeding grounds of endangered species.

https://www.ft.com/content/9313068e-98dc-11e9-8cfb-30c211dcd229


Norwegan ECA blacklists shipbuilders over human rights abuses

(Asia Shipping Media, Singapore, 5 June 2019)  Norway is pushing to create a shipbuilding regulation akin to the ship recycling sector’s Hong Kong Convention whereby yards will be blacklisted for financing if they are found to have deficient labour and human rights standards. The initiative is being led by the Norwegian Export Credit Guarantee Agency (GIEK), the giant Norwegian state-run financing institution. Speaking at a human rights in shipping seminar yesterday on the sidelines of the Nor-Shipping exhibition just outside Oslo, Sigrid Brynestad, GIEK’s senior sustainability expert, revealed her organisation has already blacklisted two yards for their human rights abuses. GIEK will not help finance any Norwegian ships at the two yards.

https://splash247.com/norway-blacklists-shipbuilders-over-human-rights-abuses/


Banks with a combined $100bn shipping portfolio stimulate green change

(Asia Shipping Media, Singapore, 18 June 2019) Eleven major shipping banks have joined a global framework called the Poseidon Principles to integrate climate considerations into lending decisions in line with IMO’s greenhouse gas (GHG) strategy to slash the industry’s carbon footprint by 50% by 2050. The Poseidon Principles are applicable to lenders, relevant lessors, and financial guarantors including export credit agencies. Around 90% of global trade by volume is carried by ships - making the maritime industry a vital player in economic growth, but at a cost. If it were a country, shipping would equal Germany for greenhouse gas (GHG) emissions. Together they represent a bank loan portfolio to global shipping of approximately $100 billion – around 20% of the global ship finance portfolio.

https://splash247.com/eleven-shipping-banks-join-framework-to-promote-green-ship...


Public and targeted consultations on EU short-term ECA rules

(Lexology, Brussels, 24 June 2019) In January 2019, the European Commission announced its intention to extend, for a period of two years, 7 sets of State aid rules, which were due to expire in 2020, [including the Communication on Short-Term Export Credit Insurance]. In this respect, the European Commission launched public and targeted consultations to assess the relevance, effectiveness and coherence of these sets of rules and to check whether they are still appropriate for the objective pursued. The Commission, as the guardian of competition under the Treaty, has always strongly condemned export aid for intra-Union trade and for exports outside the Union... to prevent Member States’ support for export-credit insurance from distorting competition

https://www.lexology.com/library/detail.aspx?g=720453c5-17bb-4335-9914-678646b8c...


What's New May 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.

  • Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing
  • Pity the Export-Import Bank, caught between warring Republican factions
  • Liberals caught again in SNC Lavalin EDC Scandal
  • Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative
  • Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs
  • China’s export insurance giant is taking a risk on coal
  • Legal challenge mounted against Kosovo coal project
  • China, Japan and South Korea, while vowing to go green at home, promote coal abroad
  • European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia
  • EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt
  • New EDC human-rights policy lacks power, say workers and watchdogs

Senate Confirmation of Export-Import Bank Directors Means Billions More Dollars in Federal Fossil Fuel Financing

(Friends of the Earth, Washington, 8 May 2019) The U.S. Senate today voted to confirm 3 nominees to the Board of Directors of the U.S. Export-Import Bank. The confirmation allows Ex-Im to establish a board quorum, clearing the way for the bank to revive its financing of billions of dollars in fossil fuel projects abroad. After nearly four years without full authority to operate, today’s Senate vote paves the way for 12 fossil fuel projects in the agency’s queue to progress forward to a board vote — with many more applications for financing likely to come. These dirty projects will result in tens of millions of tons of carbon dioxide emitted into the atmosphere annually. “By approving these new directors, the Senate is letting the Export-Import Bank fuel the crisis of climate change,” said Doug Norlen, economic policy program director at Friends of the Earth. “The bank will return to its past practice of supporting projects that damage the global climate, harm community health, violate human rights and hasten corruption. Rather than addressing the threat of climate change proactively, this is a vote to make the Export-Import Bank Trump’s billion-dollar fossil fuel slush fund.” Two Presidential Candidates have now said they want Ex-Im Bank's fossil fuel financing halted.  Sen. Bernie Sanders voted against Trump's nominees and is quoted in this article saying Ex-Im “should not be providing low-interest loans and loan guarantees to big fossil fuel companies that are endangering the planet.”  And, Washington State Governor and Presidential Candidate Jay Inslee just released his Evergreen Economy for America Plan which pledges "to cease all support for new fossil energy projects" by Ex-Im Bank and OPIC. Ex-Im's Congressional authorization expires Sept. 30, so the fight is brewing again!

https://foe.org/news/senate-confirmation-export-import-bank-directors-means-bill...


Pity the Export-Import Bank, caught between warring Republican factions

(ctpost, Norwalk, 8 May 019) No federal agency has lived such a bizarre state of suspended animation as has the Export-Import Bank, a long-obscure bureau that provides loan guarantees to U.S. companies doing business abroad. Rather than heralding it as a force for job creation, free-market conservatives turned Ex-Im into an ideological rallying cry that led to some of the most bitter disputes in Republican circles this decade. GOP senators called each other liars. House conservatives threatened to oust the speaker. Rank-and-file Republicans rebelled against the rebellion to save the bank. That changed Wednesday, when Senate Majority Leader Mitch McConnell, R-Ky., allowed confirmation votes on three board members, each of whom passed with near-unanimous Democratic support and sizeable Republican opposition. Once again, Ex-Im is back in business, able to support loans larger than $10 million for some of the largest U.S. exporters. But the fight is far from over. Just as it is finally getting a board, the Ex-Im Bank faces another fight over its very existence, as the 2015 legislation reauthorizing the agency is set to expire in the fall, setting up a debate that never seems to end and has left the bank's supporters continually puzzled.

https://www.ctpost.com/news/article/Pity-the-Export-Import-Bank-caught-between-1...


Liberals caught again in SNC Lavalin EDC Scandal

(Yorkton This Week, Yorkton SK, 15 May 2019) Export Development Canada (EDC), Canada's export credit agency, was created in 1944 to promote Canadian business overseas. It has 12 offices across Canada and 19 regional offices around the world. According to CBC reports SNC Lavelin have borrowed billions of dollars since the mid 1990’s from EDC. SNC Lavalin resulted from a merger of Surveyor, Nenniger, Chenevert and Lavalin all based in Quebec in 1991 instantly becoming one of the five largest engineering/construction companies in the world. They have been doing work in countries where bribery and corruption are common practice. They conform to the culture of the country and perform with their own questionable behavior. SNC Lavalin have been working on a slippery and shady slope. Even when applying for loans, they insert unsupported contingencies which seem to infer bribery money. Their worsening reputation worldwide was highlighted in 2011 and 2012 with high profile executives being arrested and jailed in Switzerland, the corporate head office of their construction division. Corruption had been uncovered for work being done in Mexico, Libya and Bangledesh. A result of this incident was the World Bank suspending a 1.2 billion dollar loan application for a proposed project in Bangledesh. In April, 2012 the World Bank suspended SNC Lavalin from bidding on any other bank projects. It would be interesting to see a complete list of their ongoing allegations!

https://www.yorktonthisweek.com/opinion/letters/liberals-caught-again-in-snc-lav...


Canada strikes alliance with U.S. counterweight to China’s Belt and Road Initiative

(Globe and Mail, Toronto, 14 May 2019) Canada’s overseas development finance arm is joining forces with a U.S. government agency that is being set up to act as a counterweight to China’s Belt and Road Initiative, a state-sponsored foreign-investment scheme by Beijing. The U.S. government’s Overseas Private Investment Corp. (OPIC) says in a statement the agreement it signed with both Canada’s FinDev and the European Union last month creates an alliance of development finance institutions that will enhance co-operation and underscore their collective commitment to "providing a robust alternative to unsustainable state-led models.” The Canadian government’s development finance arm is being funded with $300-million from the retained earnings of Export Development Canada, the federal government’s export credit agency.

https://www.theglobeandmail.com/politics/article-canada-strikes-alliance-with-us...


Aid and UKEF funding must be coherent & recognise climate change emergency, say MPs

(Guardian, London, 8 May 2019) The British government’s aid spending is failing to recognise the “scale and urgency” of the climate change challenge facing the world, MPs warn. Climate change must be placed at the centre of aid strategy and funding, if it is to address the seriousness of threats facing developing countries, the committee said. It urged a minimum spend of £1.76bn annually and a halt to funding fossil fuel projects in developing countries, unless they can demonstrate they support transition to zero emissions by 2050. The report highlighted “incoherent policy” by, showing the government spent £4.8bn on support for fossil fuel projects in 2010-16 via UK Export Finance, almost matching the £4.9bn spent on its International Climate Fund in a similar period, 2011-17. It has created a situation where “the UK government is providing climate aid with one hand and exporting the UK’s fossil fuel pollution with the other”, the report found. Ban Ki-moon, the former UN secretary general, urged Britain to stop funding fossil fuels overseas earlier this year.

https://www.theguardian.com/global-development/2019/may/08/aid-funding-must-reco...


China’s export insurance giant is taking a risk on coal

(Resource China, New York, 25 April 2019) Worldwide, a growing list of insurers now refuse to cover coal projects, citing risks from climate change and overcapacity. But Sinosure, the sole underwriter of coal-fired power plants along China’s Belt and Road Initiative (BRI), has yet to show any indicator of leaving coal behind. China’s foreign direct investment has more than doubled over the past three years, with much of it funneled into energy development. Coal has dominated these investments, combining coal-rich resources in many Belt and Road countries and China’s coal tech. Observers tend to focus on the role of financiers and power companies in overseas coal projects, but the importance of insurers should not be overlooked. Because insurance is a prerequisite for obtaining a loan on an overseas investment project, support from an insurer is needed for a project to move forward. State-owned China Export & Credit Insurance Corporation, known as Sinosure, acts as gatekeeper of energy investments along the BRI. Sinosure is China’s only policy insurer to cover overseas coal-fired power projects, meaning that overseas coal power projects require a green light from Sinosure to go ahead. By the end of 2018, Sinosure had underwritten 28 gigawatts of coal power capacity worldwide, exceeding the entire coal capacity of Australia.

https://medium.com/resource-china/chinas-export-insurance-giant-is-taking-a-risk...


Legal challenge mounted against Kosovo coal project

(Bank Watch, Prishtina 13 May 2019) Kosovar and international non-governmental organisations have today submitted an official complaint to the Energy Community dispute settlement mechanism challenging the legality of the power purchase agreement for the planned Kosova e Re coal power project, which is currently awaiting ratification by the Kosovo parliament. The complaint alleges that the 20-year power purchase agreement, signed by the Kosovar government with ContourGlobal in December 2017 fails to comply with the Energy Community Treaty rules on state  aid because it provides ContourGlobal a range of benefits that give it an unfair advantage over other energy producers. The contract would also put an unbearable strain on the state budget and Kosovar electricity consumers as it guarantees that a state-owned company will buy all the electricity generated by ContourGlobal at a “target price” of EUR 80/MWh – much higher than current electricity prices in the region. The World Bank and the European Bank for Reconstruction and Development (EBRD) have refused to provide support for the 500 MW New Kosovo coal power plant. Kosovo and London-listed power firm ContourGlobal said on Friday May 10 they had chosen a consortium of General Electric subsidiaries to build and equip a new 500 megawatt (MW) coal-fired power plant in the Balkan country. Kosovo has turned to the Trump administration for help to build a coal-fired power plant after losing the backing of the World Bank and the EBRD.

https://bankwatch.org/press_release/legal-challenge-mounted-against-kosovo-coal-...


China, Japan and South Korea, while vowing to go green at home, promote coal abroad

(Los Angeles Times, Suralaya, 13 May 2019) In the last-ditch global battle against climate change, China, Japan and South Korea have joined other industrialized nations in promising to reduce their use of fossil fuels. Yet even as they take steps to promote renewable energy at home, these three countries are facing growing scrutiny for financing dozens of new coal-fired power plants in foreign countries, primarily underwritten by their export credit agencies. Most of the plants are being built in Southeast Asia and Africa, in emerging economies where the growing demand for cheap, reliable electricity is most easily met by coal, the single largest source of the greenhouse gas emissions blamed for warming the planet. Environmental groups accuse the three Asian giants of climate hypocrisy.

https://www.latimes.com/world/asia/la-fg-indonesia-south-korea-coal-energy-finan...


European ECAs may loose out to Russian and/or Chinese sales of fighter jets to Malaysia

(Deutsche Welle, Bonn, 29 May 2019) Financial troubles may force Malaysia to drop its plans to buy highly capable multirole combat aircraft (MRCA) and settle for cheaper, less capable fighter jets to replace its current fleet of Russian MiG 29s that are mostly grounded. Europe's MRCA makers Eurofighter and Dassault Aviation have been wooing Malaysia for almost a decade for a deal. Kuala Lumpur has threatened to boycott EU goods, if the 28-nation bloc goes ahead with its plan to phase out palm oil from transport fuel after the European Commission concluded that palm oil cultivation, with some exceptions, caused deforestation and that its use in transport fuels could not be counted toward its renewable energy goals. Malaysia has said China, Russia and Pakistan have expressed their willingness to be partly paid in palm oil for their fighter jets. This is likely to complicate matters for the RMAF, which has traditionally preferred using Western equipment, including on its Russian Sukhoi jets. Malaysia's latest attempt at barter trade could be beneficial for Russia, which has seen China walk away with many defense deals in the region and undercut Moscow's arm supplies. Russia has a long track record of swapping weapons for commodities in the region, including as part of its fighter jet deals with Indonesia and Vietnam.

https://www.dw.com/en/setback-for-eu-fighter-jets-as-malaysia-bets-on-palm-oil-b...


EXIM Should Explore Using Available Data to Identify Applicants with Delinquent Federal Debt

(US General Accounting Office, Washington, 23 May 2019) The Export-Import Bank (EXIM) of the United States provides financing to support U.S. jobs and companies selling U.S. goods and services abroad. EXIM requires companies applying for certain financing to self-certify that they do not have delinquent federal debt. Financial pressures that stem from such debt can tempt companies to fraudulently apply for financing. However, after analyzing federal data, we identified billions of dollars in authorized EXIM transactions associated with dozens of companies that potentially had such debt. We recommended EXIM explore opportunities to use federal data when verifying companies' program eligibility.

https://www.gao.gov/products/GAO-19-337


New EDC human-rights policy lacks power, say workers and watchdogs

(National Post, Ottawa,  May 2019) OTTAWA — Export Development Canada is declaring itself a leading defender of human rights, but workers groups and advocates say the Crown agency’s long-awaited new policy falls well short of what’s needed. The United Steel Workers of Canada declared it a missed chance to show leadership in global finance, business and human rights. The arrival of the new policy comes as Canadian businesses and human-rights advocates await a legal review by International Trade Minister Jim Carr that will determine the powers of the government’s new “ombudsperson for responsible enterprise.” Karen Hamilton, the spokeswoman for Above Ground, a non-governmental agency that specializes in tracking human rights infractions involving businesses, said the group hopes Carr’s legal review leads to a change in EDC’s legislation to make stronger human rights obligations mandatory. “If we really want to see change, it has to be legislated,” Hamilton said.

https://nationalpost.com/pmn/news-pmn/canada-news-pmn/new-edc-human-rights-polic...


What's New April 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.

  • European Commission consultation on short-term export credit rules
  • SNC-Lavalin insider's bribery allegations spark EDC probe
  • German parliament approves ECA supported sale of 6 heavy frigates to Egypt
  • EFIC Reform Puts Pacific ‘Step-Up' at Risk
  • India's Jet Airways delays payments to global lenders guaranteed by ExIm
  • Riyadh aims to counter Tehran’s influence with Iraq ECA credits
  • Iran's ECA Reassures Foreign Trade Partners
  • China gives Naftogaz $1 billion ECA guarantee
  • Eskom’s black hole of debt keeps on getting bigger
  • How Gujarat fishermen won US top court ruling against global funding
  • UAE ECA ECI voted as observer member of Berne Union
  • Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

European Commission consultation on short-term export credit rules

(UKIF, London, 30 Aprill 209) The European Commission is inviting relevant stakeholders to participate in a consultation on the short-term export-credit insurance Communication that is expiring at the end of 2020. The consultation is a backward-looking evaluation, to identify whether those rules should be prolonged in their current form or possibly updated. The deadline to submit contributions is 24 May 2019.

Respond to the survey.

Read the Commission communication to member states

https://www.gov.uk/government/news/european-commission-consultation-on-short-ter...


SNC-Lavalin insider's bribery allegations spark EDC probe

(CBC, Toronto, 3 April 2019) Export Development Canada has hired outside legal counsel to review some of its dealings with SNC-Lavalin. The review comes after a company insider told CBC News the engineering giant secured billions in loans from the Crown agency over the years, some of which he alleges was intended to pay bribes. EDC has denied knowledge of any improper payments, but last Friday said it is taking a closer look at a 2011 deal with SNC-Lavalin involving a $250-million project to refurbish the Matala hydroelectric dam in Angola. EDC has backed SNC-Lavalin projects in 19 countries since 1995. In 2012 the head of SNC-Lavalin's construction division was arrested in Switzerland for bribery in Libya. The sheer size of "technical fees" which could total as much as 10% of a project's overall budget should have raised flags. In 2013 the CBC and the Globe and Mail exposed secret payments for projects in Africa, India, Cambodia and Kazakhstan.

https://www.cbc.ca/news/canada/snc-lavalin-export-development-canada-loans-1.507...


German parliament approves ECA supported sale of 6 heavy frigates to Egypt

(Middle East Monitor, London , 5 April 2019) The German Parliament Budget Committee has approved export credit guarantees to secure the sale of six heavy frigates worth €2.3 billion (US$2 billion) to Egypt from ThyssenKrupp Marine Systems. The ships can be supplied with weapons including guided missiles and torpedoes. Green Party Budget expert, Tobias Lindner, criticised the deal and highlighted Egypt’s human rights record. “The government’s arms export policy is becoming increasingly contradictory,” Lindner told Bild, adding that “people have been fighting for weeks against weapons deliveries to Saudi Arabia, while at the same time wanting to deliver frigates to the military dictatorship in Egypt.”

https://www.middleeastmonitor.com/20190405-german-parliament-approves-sale-of-6-...


EFIC Reform Puts Pacific ‘Step-Up' at Risk

(Australian Council for International Development, Canberra, 14 Feb, 2019) ACFID has raised concerns about reform to Australia’s export credit agency - EFIC - as part of the Australian Government’s Pacific ‘step-up’ and is calling for the legislation to be referred to a parliamentary committee for scrutiny. The Export Finance and Insurance Corporation Amendment (Support for Infrastructure Financing) Bill 2019 introduced to the House of Representatives proposes reform to EFIC so it can administer $1.2bn in callable capital to finance Australian businesses to build infrastructure overseas. The increase for EFIC from $200m to $1.2bn in callable capital and the Minister’s statement that EFIC will assist in administering loans for the Australian Infrastructure Financing Facility (AIFFP) is cause for concern. ACFID stressed that it is untenable to have $1.2bn of taxpayers’ funding being used for Australian businesses without transparency in its delivery and reporting. A financial scale-up without the relevant capabilities and expertise within EFIC, and the lack of transparency over how EFIC will interact with other Government departments, raises very serious concerns in the aid sector over the suitability of EFIC in holding such a central role in administering new loan-finance. DFAT reassured the Senate that there was no need for any such requirement since Efic has signed up to various OECD export credit guidelines, and will “carefully assess” any number of things to ensure that only good projects are selected, in particular the country’s capacity to repay the loan. [ECA Watch note: The OECD Arrangement's "gentlemans' agreement" and peer review process has not proven much of a deterrent to bad practice, as show by the many flaws and concerns raised here on the ECA Watch web site.]

https://acfid.asn.au/media-releases/efic-reform-puts-pacific-%E2%80%98step-risk-...


India's Jet Airways delays payments to global lenders guaranteed by ExIm

(Money Control, Mumbai, 8 April 2019) India's' cash-strapped Jet Airways has delayed repayments to global lenders, including Citibank, that funded the purchase of its Boeing 777 planes the Economic Times reported. The repayments, worth over $18 billion, were due at the end of March. The banks loaned funds to the carrier based on guarantees from the Export-Import (EXIM) Bank of the US, which can be invoked in case of a default. If a default occurs, it would be bad news for Jet as the US ECA would deregister and take back the planes. Almost two-thirds of Jet's fleet have been grounded due to non-payment of its dues.

https://www.moneycontrol.com/news/business/jet-airways-delays-payments-to-global...


Riyadh aims to counter Tehran’s influence with Iraq ECA credits

(Financial Times, Riyadh, 4 April 2019) Saudi Arabia is intensifying diplomatic efforts to boost ties with Iraq, as the kingdom aims to strengthen its influence on regional rival Iran’s doorstep. The kingdom’s harsh treatment of Shia clerics sparked demonstrations in Iraq, and many Iraqis blamed Saudi Arabia for fuelling hardline Sunni Islamist ideology that gave rise to the Isis extremist group. However, since 2016, Riyadh has taken a more nuanced view of Iraqi politics that aims at chipping away at Iranian influence by denying Tehran the sectarian card. Saudi officials arrived in the Iraqi capital this week, wielding a $1bn grant for a sports stadium. Last year the Saudis pledged a $1bn loan for reconstruction in Iraq, plus $500m in export credit.

https://www.ft.com/content/4e2a8558-56ef-11e9-91f9-b6515a54c5b1


Iran's ECA Reassures Foreign Trade Partners

(Financial Tribune, Tehran, 30 April 2019) CEO of the Export Guarantee Fund of Iran says the fund has taken special measures to shield exports from the negative impact of US sanctions. “In light of the new US sanctions and the fact that foreign traders do not receive Iranian bank [export] guarantees, the fund is willing and able to cover the commercial risks for exporters,” she noted. The EGFI said earlier that it wants to expand risk cover for export insurance by $2.5 billion in the current fiscal (started March 21) and increase the penetration rate of export guarantees.

https://financialtribune.com/articles/business-and-markets/97660/irans-eca-reass...


China gives Naftogaz $1 billion ECA guarantee

(Kyiv Post, Kyiv, 2 April 2019) China has been eyeing strategic investments and acquisitions across Ukraine for at least a year now – but a Chinese state-owned credit firm, Sinosure, appeared to up the stakes on April 2 as it inked a deal to provide $1 billion in insurance coverage to Ukrainian energy conglomerate Naftogaz. Naftogaz has said that the new Chinese insurance is essentially a financial guarantee on the company being able to attract debt financing and further direct investment from China. Naftogaz is the state-owned Ukrainian oil and gas monopoly that handles the extraction, refinement and transportation of natural gas and oil. Data shows that China might replace Russia as Ukraine’s largest single-nation trading partner if growth rates in bilateral commerce between the two countries remain steady or increase. Ukraine’s Western and NATO allies, especially Japan, the United States and the United Kingdom have expressed strong concerns about China’s interest in Ukraine – they warn that investments are largely driven by Chinese self-interest and could pose a security threat to the alliance and Ukraine.

https://www.kyivpost.com/business/china-gives-naftogaz-1-billion-guarantee-on-de...


Eskom’s black hole of debt keeps on getting bigger

(The Citizen, Johannesburg, 3 April 2019) Moody’s credit opinion issued yesterday on the heels of its recent decision to keep South Africa’s credit rating one level above junk, said elevated government debt and contingent liabilities risks from state-owned enterprises (SOEs), limited government’s ability to absorb shocks. The note came after Eskom’s announcement of a R2.5 billion loan from the New Development Bank in China on top of the R420 billion (US$29 billion) debt it’s already carrying, and there’s no say when the 670 MW of renewable energy it’s meant for, will come on line. Export credit agency finance is one of the sources Eskom is tapping as part of its R300 billion (US$21 billion) funding plan for the new build programme. More than three quarters of that funding has now been secured. On May 30, 2011, the Export Import Bank of the United States had loaned about R5.7 billion, adding at the time to “the R31 billion (US$2.2 billion) in export credit agency backed finance Eskom had already raised.

https://citizen.co.za/business/business-news/2110845/eskoms-black-hole-of-debt-k...


How Gujarat fishermen won US top court ruling against global funding

(Indian Express, Ahmedabad, 10 April 2019) On February 27, the US Supreme Court ruled in favour of a group of fishermen and a Gujarat village panchayat in a suit against the US-headquartered International Finance Corporation (IFC). The case, which now goes back to a US district court, relates to alleged pollution caused by a Gujarat-based power plant partly funded by IFC and Korean ECA KEXIM. Of the estimated project cost of $4.14 billion, $450 million was funded in 2008 by IFC, the Asian Development Bank advanced $450 million as loan, the Export Credit Agency of Korea extended another $800 million as loan, and CGPL raised around Rs 1.5 billion from Indian banks through debt. According to National Fish Worker’s Forum, a nationwide federation of fishermen organisations, the plant operates a cooling technology that requires much more water than the system it got clearance for. The water is eventually discharged into the sea, and the complainants have alleged that it has affected marine life. Budha Jam, leader of the fishermen community of Tragadi-Nal, says: “With marine life near the coast affected, we are forced to sail farther in search of fish. They also dredged the coast and seafloor for their outfall channel and deposited sand near a well, which was a source of drinking water. Water in the well has turned saline since.” Complainants add that coal dust and fly-ash from the plant are damaging date palms and chikoo trees in Navinal. [One wonders how KEXIM's adherence to the OECD's Common Approaches could have allowed this.]

https://indianexpress.com/article/explained/how-gujarat-fishermen-won-us-top-cou...


UAE ECA ECI voted as observer member of Berne Union

(Times of Oman, Muscat, 28 April 2019) Etihad Credit Insurance (ECI), the UAE Federal credit insurance company, was voted in as an observer member of the Berne Union, a renowned global association that represents the global export credit and investment insurance industry. In 2018,Berne Union members delivered US$2.5 trillion of payment risk protection to banking institutions, exporters and investors which is equivalent to 13 per cent of total cross-border merchandise trade.

https://timesofoman.com/article/1208694/Business/Economy/ECI-voted-as-observer-m...


Australian cattle exported to Sri Lanka under EFIC project dying and malnourished

(ABC, Sydney, 4 April 2019) Hundreds of Australian and New Zealand cattle have died in a Federal Government-backed export deal with Sri Lanka, which local farmers say has left them broke, and in some cases, suicidal. Farmers and animal rights groups, as well as Sri Lanka's own auditor-general, want the export project stopped because they say it is poorly planned and inhumane. Angry Sri Lankan farmers have told the ABC the "high-yielding, pregnant dairy cows" they were promised were overpriced, unhealthy and infertile. Sri Lankan business consultant Mohammed Mausook Riyal, adding that the cows were the wrong breed for the climate, making them susceptible to disease, and farmers could not make a profit because of poor milk yield and low conception rates. Under the terms of the $100 million project, underwritten by the Australian Government's export credit agency, EFIC, the exporter, Wellard, was required to provide Sri Lankan farmers with facilities, training and veterinary support.

https://www.abc.net.au/news/2019-04-04/australian-dairy-cattle-sent-to-sri-lanka...


What's New March 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.

  • The smart money is jumping the sinking coal ship
  • New OECD Bribery and Export Credits Recommendation
  • NAM Urges Senate to Get Ex-Im Bank Back Up and Running
  • Levelling the playing field: UK exporters want more
  • WTO says U.S. failed to halt state tax subsidy for Boeing
  • Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers
  • Kenya 'inflated' SACE loans insurance cost by Sh10 billion
  • Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects
  • EU exemption on export credits: is everyone a winner?
  • East Africa: China to Host Second Belt and Road Forum
  • EX-IM Hosts 2019 Annual Conference in Washington, D.C.

The smart money is jumping the sinking coal ship

(Thomson Reuters Foundation, London, 1 March 2019) A torrent of banks and other financiers are shifting their money out of coal as investment risks in it grow. We have only 12 years left to save the planet from devastating climate change, the Intergovernmental Panel on Climate Change warned last October. With important governments missing in action, financial institutions have now emerged as unlikely allies of climate activists. In recent months banks and other financiers have pulled out of the coal and other fossil fuel sectors. The World Bank was the first major financial institution to end lending for most coal projects in 2013. Six year later the trickle is turning into a torrent. According to a new report by the Institute for Energy Economics and Financial Analysis (IEEFA), more than 100 banks, pension funds, insurance companies, asset managers, development banks and export credit agencies with assets of at least $10 billion each have by now adopted some kind of coal restrictions.

http://news.trust.org//item/20190301103215-pgnh7/


New OECD Bribery and Export Credits Recommendation

(OECD, Paris, 27 March 2019) With the adoption of the revised Recommendation of the Council on Bribery and Officially Supported Export Credits (OECD/LEGAL/0447) in 2019, ECG Members and other non-Members that have adhered to the Recommendation (hereafter, the “Adherents”) are demonstrating their continued commitment to take appropriate measures to deter bribery in the export transactions that they support. Implementation of the revised Recommendation will be monitored via surveys of the measures that Export Credit Agencies have put in place to combat bribery and will be supported by regular workshops to consider best practices, relevant international developments and evolving business practices. [The OECD Recommendations are not legally binding and rely only on moral force. OECD reporting on surveys and internal "monitoring" have fallen short of expectiations by international NGO corruption monitors.]

http://www.oecd.org/trade/topics/export-credits/bribery-and-export-credits/


NAM Urges Senate to Get Ex-Im Bank Back Up and Running

(National Association of Manufacturers, Washington, 8 March 2019) Securing a level playing field internationally [i.e. matching corporate subsidies] is vital to manufacturers in the United States, which already export about half their production, supporting millions of workers across the country. While there’s been a lot of focus on foreign barriers that impede U.S. exports, one of the most concerning problems is of our own making: the Senate’s failure to confirm nominees to the Board of Directors of the U.S. Export-Import Bank. Without these nominees, the Ex-Im Bank cannot even consider major deals over $10 million or even act on the reforms that Congress set out it when it last reauthorized the bank in 2015. With the Ex-Im Bank severely weakened, manufacturers in the United States are losing sales to foreign competitors who are backed up by nearly 100 other export credit agencies around the world. For example, China’s two Export Credit Agencies routinely help their companies out-muscle their U.S. rivals. Last year, China provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. According to the National Association of Manufacturer’s estimates, manufacturers lost at least $119 billion in manufacturing output, translating into 80,000 fewer manufacturing jobs in 2016 and 2017 as a result of an inactive Bank.

https://www.shopfloor.org/2019/03/senate-ex-im-bank/


Levelling the playing field: UK exporters want more

(Global Trade Review, London, 13 March 2019) Excluded from many projects in countries under IMF bailout programmes, UK exporters are calling for a trade and aid link in African infrastructure and a rewrite of OECD guidelines that bind export credit agencies. The support is good but UK exporters want more. Some of the most lucrative public sector projects in Africa are out of their reach because of IMF rules on borrowing for Africa’s 30 heavily indebted, poor countries. If a country has reached its borrowing limit, it can’t borrow anymore unless 35% of that debt is concessional or has a grant element. Infrastructure groups say they could win much more business if the UK’s department for international development (DfID) was prepared to link some of its annual £13bn foreign aid budget with export credit. For UK exporters it is never enough. UKEF financing, albeit with long tenors and flexible terms, isn’t concessional. It’s never been part of the ECA’s remit to provide concessional export credit finance and the grant element of a loan can only come from the UK’s development agency. Unlike other OECD countries such as Japan, South Korea, Italy and France where their ECAs combine loans with a grant or aid element, DfID doesn’t want its budget or support linked to UK companies bidding for infrastructure projects.

https://www.gtreview.com/supplements/gtr-uk-2019/levelling-playing-field-uk-expo...


WTO says U.S. failed to halt state tax subsidy for Boeing

Reuters, Geneva/Paris, 28 March 2019) The World Trade Organization said on Thursday the United States had ignored its request to halt a subsidized tax break for Boeing Co in its main plane-making state of Washington as a 15-year-old transatlantic trade row edges towards tit-for-tat sanctions. The European Union said the WTO appeal ruling had vindicated its claims that Boeing continued to receive illegal subsidies, but the United States said only one measure, a Washington state tax break worth around $100 million annually, had been found still to violate the rules. A 2018 ruling by the WTO already found that the EU was also failing to stop its own illegal subsidies for Europe's Airbus. Washington has since claimed an unspecified amount in damages and a WTO mediator is still examining this claim. The "Bank of Boeing" is what critics sneeringly call the Export-Import Bank of the United States, a federal agency that provides low-cost loan guarantees that help companies, including Boeing, expand and compete internationally.

https://www.reuters.com/article/us-eu-usa-aircraft-wto/wto-says-u-s-failed-to-ha...


Canadian officials tried to warn EDC of ‘significant reputational risk’ in South African deal with Gupta brothers

(Globe & Mail, Toronto, 26 March 2019) Senior federal officials sought to warn Canada’s export agency that it had suffered “significant” risk to its reputation because of its US$41-million loan to the controversial Gupta brothers who were at the heart of a South African corruption scandal, internal documents show. The documents, obtained by The Globe and Mail under federal access laws, show that Global Affairs Canada wanted an explanation of the risky loan from the federal agency, Export Development Canada, during a planned meeting in March, 2018, where the Gupta deal was scheduled to be a top agenda item. Canada's export agency was aware of allegations against South Africa's controversial Gupta family for the past five years, yet it went ahead with a US$41-million loan to the Guptas anyway, a lawyer for the family says. After a year of legal battles, Canada’s export agency has won the right to sell a notorious Canadian-funded airplane that played a highly visible role in the corruption scandal that toppled South Africa’s former president, Jacob Zuma.

https://www.theglobeandmail.com/world/article-senior-federal-officials-tried-to-...


Kenya 'inflated' SACE loans insurance cost by Sh10 billion

(Standard Media, Nairobi, 7 March 2019) The Government of Kenya paid Sh10 billion to insure the loans taken for construction of the controversial Arror and Kimwarer dams, but industry experts argue the cost should not have exceeded Sh1 billion. Italian insurer SACE was paid Sh11.1 billion [94.2 million Euros] as premium for the loan, but a reputable firm that offers products on sovereign loans argues the much it would have charged was Sh750 million. In essence, going by arguments by local industry experts, Kenya paid 15 times over the fair rate to the Italian government-owned credit insurer for insuring the loans procured from a consortium of banks led by Intesa San Paolo. It would be a subject of interest for investigators to determine why SACE charged 17.5 per cent of the loan amount as premium, against industry rates averaging 1.5 per cent.

https://www.standardmedia.co.ke/article/2001315555/state-inflated-loan-insurance...


Foreign energy giant wants Australia's EFIC to foot bill for fossil fuel projects

(Sydney Morning Herald, Sydney, 5 March 2019) A major oil and gas company wants Australian taxpayer money spent on overseas energy projects, stoking fears that a Morrison government plan to boost development in the Pacific is a smokescreen for fossil fuel investment. A government amendment to the operation of its export credit agency, the Export Finance and Insurance Corporation, quietly passed Parliament's lower house with support from Labor last month. It is now being considered by a Senate committee. A submission to the Senate inquiry by Papua New Guinean oil and gas company Oil Search suggests fossil fuel projects may be lining up for funding under the proposed laws. The government bill would add $1 billion to the finance corporation's existing $200 million calling capital and broaden the national interest test for investment decisions. The Coalition and Labor combined to defeat an amendment to the bill proposed by Greens MP Adam Bandt that would have barred the corporation from facilitating thermal coal exports. Mr Bandt, the party’s climate change and energy spokesman, said the bill would “expand Australia’s fossil fuel exports at taxpayer expense”.

https://www.smh.com.au/politics/federal/foreign-energy-giant-wants-australia-to-...


EU exemption on export credits: is everyone a winner?

(Global Trade Review, London, 13 March 2019) Europe to exempt export credits from banks’ leverage ratios have been received positively, but is this good news for all export finance banks? Last month, EU ambassadors endorsed the capital requirements regulation adjustment package, including an exemption for export credits from the leverage ratio. On the face of it, this should resolve a long-standing headache for export finance banks, who would suffer under Basel III due to a lack of an exemption from the leverage ratio calculation from the export credit agency (ECA)-backed portion of any transaction, despite the near-zero credit risk of an ECA. After years of advocacy by the European Banking Federation (EBF) export credit working group, the ICC global export finance committee and the ICC regulatory advocacy committee, along with support from the Berne Union, various European ECAs and national banking associations, the export finance community can now claim a victory. In practice, this will mean the traditionally low-risk business of export finance should become more attractive for banks, bringing much-needed liquidity to the market. Former EBF export credit working group chair, Henri d’Ambrières, tells GTR that a reluctance on the part of EU regulators to go further with this regulation could mean some exporters may be put at a disadvantage. This could lead to Spanish exporters losing competitiveness against their German counterparts in markets such as Latin America. The two countries jointly account for 40% of all EU exports to the region, and compete in areas such as capital goods for Latin America’s booming renewable power sector – usually purchased in dollars.

https://www.gtreview.com/news/europe/eu-exemption-on-export-credits-is-everyone-...


East Africa: China to Host Second Belt and Road Forum

(The East African, Nairobi, 6 March 2019) China will host its second Belt and Road Initiative (BRI) forum later this year, in its push to link the country by sea and land through an infrastructure network with Asia, the Middle East, Africa and Europe. The initiative launched by President Xi in 2013 seeks to strengthen Chinese global dominance through more than $1 trillion investment in infrastructure. In Africa, China invests majorly on transport and energy with Nigeria, Angola, Ethiopia, Kenya and Zambia among the largest partners in the BRI. In 2018, President Xi, during the Beijing Summit of the Forum on China Africa Cooperation (FOCAC), pledged $60 billion in financial support to Africa as part of the country's engagement with the continent in the next three years.

https://www.theeastafrican.co.ke/business/China-to-host-second-Belt-and-Road-for...


EX-IM Hosts 2019 Annual Conference in Washington, D.C.

Business Wire, Washington, 28 March 2019) Leaders of government, business, and academia will address the 2019 Annual Conference of the Export-Import Bank of the United States (EXIM) that held on Thursday and Friday, March 28-29, 2019, at the Omni Shoreham Hotel in Washington, D.C. The conference agenda as of March 27th is outlined here.

https://www.exim.gov/events/annual-conferences/2019/agenda


What's New February 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.

  • SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans
  • Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries
  • Are ECAs liable for funding of slavery tainted enterprises?
  • With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark
  • German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk
  • EDC insured Suncor’s Middle East misadventures
  • Australia’s ECA eyes overseas investment with potential new mandate
  • Jaguar Land Rover seeking ECA funding after huge write-down
  • Japanese and French ECAs to finance Turkey's second nuclear plant
  • Kuwait Conference pledges billions for Iraqi reconstruction
  • Bahrain talking to U.S. oil companies about tight oil deal
  • Finnvera Group’s Board Report and Financial Statements for 2018

SNC-Lavalin case brings public scrutiny to hundreds of millions in EDC loans

(Above Ground, Ottawa, 22 February 2019) Following reports that engineering giant SNC-Lavalin lobbied federal officials intensively in the lead-up to its criminal prosecution on corruption charges, public attention has been brought to the hundreds of millions in government loans the company has received in recent years. The Globe and Mail reported last week that Export Development Canada (EDC) has provided at least $800-million and as much as $1.7-billion in loans to SNC-Lavalin since 2011, when news broke that the firm was under investigation by the RCMP. Some of those loans were approved after the World Bank announced in 2013 that SNC-Lavalin was barred from bidding on its projects until 2023 due to corruption, and after criminal charges were laid in Canada. As we noted in our recent submission to the government urging stricter oversight of Export Development Canada, SNC-Lavalin is just one of several EDC clients to face corruption investigations, charges or sanctions in recent years. (Others include Bombardier, Kinross Gold and Brookfield.)

https://aboveground.ngo/news-media/media-coverage/


Ban Ki-moon says UKEF must stop investing in fossil fuels in developing countries

(Guardian, London, 24 February 2019) Former UN Secretary General Ban Ki-moon has urged Britain to stop funding fossil fuel projects overseas, in what he said would mark a test of Theresa May’s commitment to act on climate change. The former UN secretary general said he was deeply concerned that the UK’s export credit agency had provided billions of pounds in recent years to support businesses involved in oil and gas schemes around the world. “These figures and policies are hard to reconcile with the UK’s commitments under the Paris agreement,” said Ban, referring to the international climate deal he forged in 2015 as UN Chief. “The time has come for the UK to change course, in the interests of the whole world,” he wrote in a comment for the Guardian. The UK Environmental Audit Committee is currently investigating the scale and impact of UK Export Finance’s financing of fossil fuels in developing countries.

https://www.theguardian.com/environment/2019/feb/24/ban-ki-moon-britain-stop-inv...


Are ECAs liable for funding of slavery tainted enterprises?

(20 Essex Street, London, 2 February 2019) A recent UN report with recommendations to advance efforts to eradicate modern slavery has mentioned, amongst other examples, the direct or indirect involvement of a state in the commission of offences via ECA funding of slavery-tainted enterprises. For example, the Guardian has reported that the US Export Import Bank provided $315m in taxpayer-supported financing over the past decade to a company that has supplied equipment to African mines accused of slave labor, human rights violations and environmental destruction. The Eritrean mine is being investigated by a Canadian court.

https://www.20essexst.com/news/dr-philippa-webb-releases-report-modern-slavery-u...


With new limits on coal but none on oil and gas, EDC’s climate policy misses the mark

(Above Ground, Ottawa, 12 February 2019) In January Export Development Canada (EDC) released a new climate change policy. The policy commits EDC to further limit its coal-related investments and increase its support for clean technologies. It does not, however, put in place a clear path to reducing – let alone phasing out – the billions of dollars of support that EDC provides to the oil and gas sector each year. EDC’s support for fossil fuel companies is fundamentally at odds with Canada’s international obligations on climate change. To address this contradiction, last year more than a dozen civil society groups including Above Ground recommended that EDC phase out its support for coal, oil and gas projects; companies significantly reliant on coal; and companies whose primary business is in coal, oil or gas. We also recommended that EDC commit to achieving a sharp reduction in GHG emissions across its business portfolio. Instead, EDC has renewed its commitment to support carbon-intense sectors, including the oil and gas industry.

https://aboveground.ngo/edc-new-climate-change-policy-falls-short/


German banks & ECAs manoeuvre in Washington to temper US Russia sanction risk

(Reuters, Frankfurt, 8 February 2019) German banks are seeking to blunt any fresh U.S. sanctions against Russia so they can continue existing business with Russian clients, according to an internal briefing paper prepared by a financial industry lobby group. The risk of new restrictions on doing business with Russia has risen since the Democratic Party won control of the U.S. House of Representatives. New anti-Moscow measures could jeopardise funding for a 9.5 billion euro gas pipeline which seeks to channel gas from Russia directly to Germany under the Baltic Sea. "Nord Stream is the elephant in the room," said one person with direct knowledge of the matter. Russian news agency TASS quoted Nord Stream 2’s finance chief Paul Corcoran saying it was in discussions with export credit agencies and wanted to raise around 6 billion euros. Last month, the U.S. Ambassador to Germany sent a letter to companies involved in Nord Stream warning that they could face sanctions if they stick with it.

https://www.euronews.com/2019/02/08/german-banks-manoeuvre-in-washington-to-temp...


EDC insured Suncor’s Middle East misadventures

(Globe & Mail, Toronto, 7 February 2019) The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011. On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims. Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. EDC declined to answer most of The Globe’s questions about the Suncor policy.

https://www.theglobeandmail.com/canada/article-federal-government-insured-suncor...


Australia’s ECA eyes overseas investment with potential new mandate

(Global Trade Review, London, 20 February 2019) Australia’s export credit agency, Export Finance and Insurance Corporation (Efic), could receive an A$1bn cash injection of callable capital, a mandate to finance larger overseas projects and a new name as part of a bill expected to pass in the house of representatives this week. The bill’s initial text highlights opportunities to invest in overseas infrastructure, such as telecommunications, energy, transport and water, throughout the Pacific region and further afield. The bill also includes a new name for the agency — Export Finance Australia. More specifically, the bill notes that the additional capital would allow the agency to continue to finance infrastructure projects in Papua New Guinea, which it described as “one of our most important neighbours”. Efic is currently involved in the PNG LNG project, a US$19bn investment scheme for the commercial development of the gas resources of Papua New Guinea. However, on its current budget, Efic is re-approaching its country lending limit for the southwestern Pacific island nation and it is only able to finance one additional project.

https://www.gtreview.com/news/asia/australias-eca-eyes-overseas-investment-with-...


Jaguar Land Rover seeking ECA funding after huge write-down

(Car Advice, Sydney, 11 February 2019) Jaguar Land Rover is seeking US$1 billion in funding after a disastrous fourth quarter of 2018, huge-write downs on the value of its investments, and continued sales struggles in China. According to a report from Automotive News Europe, the Indian-owned carmaker needs to raise US$1 billion ($1.4 billion) within the next 14 months to replace "maturing bonds" and fund the brand's expensive electric vehicle development program. Rather than borrowing from the bond market, the company is looking at bank financing, leasing its assets or tapping into export credit. Tata Motors announcing sales in China were down 35% in the final 3 quarters of 2018.

https://www.caradvice.com.au/725363/jaguar-land-rover-seeking-funding-after-huge...


Japanese and French ECAs to finance Turkey's second nuclear plant

(Daily Sabah, Istanbul, 25 February 2019) Turkey's second nuclear power plant to be built in Sinop under a Japanese-French partnership, will make a breakthrough by obtaining a ground license this year. The plant, which will have an installed capacity of 4,480 megawatts (MW) and consist of four reactors with a 1,120-MW capacity each, will cost $20 billion. The Japanese and Turkish governments agreed in 2013 on the project to be built with a Japanese-French consortium in the Black Sea province of Sinop. The bulk of the project would be financed by Nippon Export and Investment Insurance (NEXI), Japan's export credit agency, and French credit insurer Coface.

https://www.dailysabah.com/energy/2019/02/25/ground-license-to-be-granted-to-sin...


Kuwait Conference pledges billions for Iraqi reconstruction

(Daily Sabah, Istanbul, 4 February 2019) Turkey, the top contributor for Iraq's reconstruction with a $5 billion loan, has launched a coordination process to allocate the funds pledged for rebuilding Iraq. During the Kuwait International Conference for the Reconstruction of Iraq, the host country pledged $1 billion in loans and $1 billion in direct investments. Saudi Arabia said it would allocate $1 billion for investment projects in Iraq and $500 million to support Iraqi exports. Qatar said it would allocate $1 billion in loans and investments, while the United Arab Emirates pledged $500 million in investment. The European Union and Australia each promised $450 million and $100 million, respectively. While the U.S. - who invaded Iraq in 2003 - said it could provide more than $3 billion to help American firms invest in the war-torn country. Britain had said it would grant Iraq export credit of up to $1 billion per year for a decade. Iraqi government published a list of 157 projects, for which it sought private investments during the conference last year.

https://www.dailysabah.com/business/2019/02/04/turkey-initiates-coordination-act...


Bahrain talking to U.S. oil companies about tight oil deal

(Reuters, Manama, 26 February 2019) Bahrain is talking to U.S. oil companies with shale oil expertise about developing a huge oil and gas field discovered last year, and hopes to have an interested company by the end of the year. Oil Minister Al Khalifa also said state-run Bahrain Petroleum Company (Bapco) is “a few weeks away” from financial close on funding for the capacity expansion of its existing Sitra oil refinery. Five export credit agencies from Korea, Spain, Italy and Britain, alongside international and Bahraini banks will provide more than $4 billion in financing.

https://in.reuters.com/article/bahrain-oil/bahrain-talking-to-u-s-oil-companies-...


Finnvera Group’s Board Report and Financial Statements for 2018

(Global News Wire, Helsinki, 26 February 2019) Demand for export credits has increased in recent years. At the same time, our need for funding has increased and, in 2018, a total of EUR 2.4 billion was acquired from the capital market. To balance funding and asset management, Finnvera prepaid loans associated with the temporary export credit system of 2009–2012 to the State, amounting to EUR 1.5 billion. Finnvera’s total exposure at the end of 2018 was EUR 25.6 billion, of which drawn guarantees and credits accounted for EUR 12.2 billion. Approximately half of the exposure relates to binding financing offers or agreements that are related to future deliveries by export companies, and thus they do not create credit risks for Finnvera yet. These arrangements typically consist of buyer financing for cruise ships, the delivery times of which are long. In the long term, the drawn exposure will remain clearly below our total exposure. For potential future losses, we have so far accumulated EUR 1.8 billion reserves as the result of our operations.

https://globenewswire.com/news-release/2019/02/26/1742169/0/en/Finnvera-Group-s-...


What's New January 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.

  • Parliamentary inquiry into UKEF Procedures and Submissions Available online    
  • Japan edges in on Belt and Road with $643m for Angolan port
  • Trans-Adriatic Pipeline completes successful €3.9 billion project financing
  • Afreximbank Lends $170 Million to Orascom for Pan-African Expansion
  • PNG leads wave of jumbo ECA project loans
  • Saudi Aramco Hiring Funding Advisers for a $5 Billion Project
  • Mozambique looks for LNG ECA financing despite market scepticism
  • Remember the Export-Import Bank
  • Extension of interest subsidy scheme to boost Indian export credits
  • NEXI insures UKEF credit for Boeing export to Colombia's Avianca
  • US Export-Import Bank reopens programs for Ukraine
  • Indonesia looks to ECA funding for aerial refuelling tanker-transports
  • Nord Stream 2 negotiating ECA loans worth 6 bln euros

Parliamentary inquiry into UKEF Procedures and Submissions Available online

(UK Parliament, London, January 2019) The Terms of Reference, membership, witness submissions, witness guidelines and the calendar of the UK Parliament's Environmental Audit Committee inquiry into UK Export Finance are now available online.

https://www.parliament.uk/business/committees/committees-a-z/commons-select/envi...


Japan edges in on Belt and Road with $643m for Angolan port

(Nikkei Asia Review, Tokyo, 9 January 2019) Trading company Toyota Tsusho and the Japan Bank for International Cooperation are joining forces on a port project in Angola that will be the largest of its kind for Japanese businesses. The plan is to raise 70 billion yen ($643 million) from both public and private lenders in Japan to help the African country fund the endeavor. The move comes as China steps up infrastructure development in Africa amid concerns that it is saddling developing countries with excessive debt.  Toyota plans to use Japanese equipment and materials to construct the port facility through a contract with the Angolan government, which will receive loans from export credit agency JBIC and other entities. To encourage private lenders to participate, Nippon Export and Investment Insurance is to insure the amounts they offer. The Japanese move is being seen as an attempt to challenge China’s dominant position in Angola.

https://asia.nikkei.com/Economy/Japan-edges-in-on-Belt-and-Road-with-643m-for-An...


Trans-Adriatic Pipeline completes successful €3.9 billion project financing

(AzerNews, Baku, 11 January 2019) A consortium for the Trans-Adriatic Pipeline (TAP) construction has successfully completed the financial closure of the project in 2018, receiving 3.9 billion euros. “The European Investment Bank (EIB), recognizing the important contribution of TAP to improving the security of energy supply in Europe, allocated 700 million euros for the implementation of this project. Reportedly, 17 commercial banks provide financing along with the EBRD and the European Investment Bank (EIB). Part of the financing is covered by export credit agencies - Bpifrance (450M Euros), Euler Hermes (280M Euros) and Sace (700M Euros), merchant banks (635M Euros) and EBRD (1 billion Euros). Costs have previously been funded by TAP’s shareholders: BP (20%), SOCAR (20%), Snam (20%), Fluxys (19%), Enagás (16%) and Axpo (5%). There have been incidents of protests by both local citizens and government officials against the Trans Adriatic Pipeline.

https://www.azernews.az/oil_and_gas/143883.html


Afreximbank Lends $170 Million to Orascom for Pan-African Expansion

(Afreximbank, Cairo, 17 January 2019) The African Export-Import Bank (Afreximbank) has signed a facility agreement lending $170 million to Egypt-based conglomerate Orascom Investment Holding (OIH) to assist the company expand its pan-African activities in pursuit of its short and medium-term expansion strategy. the transaction was a significant opportunity for OIH’s targeted investments in companies across Africa to support their transformation, increase their production capacity and produce higher quality exports through better value addition, especially in the agro-processing sector. Afreximbank has approved more than $67 billion in credit facilities for African businesses since 1994. Orascom Investment will explore business and investment opportunities referred to it by Afreximbank in such countries as Rwanda, Togo, Eretria, Nigeria and Sao Tome.

https://afreximbank.com/afreximbank-lends-170-million-to-orascom-for-pan-african...


PNG leads wave of jumbo ECA project loans

(Reuters, Sydney, 18 January 2019) The expansion of Papua New Guinea’s giant gas project is turning up the heat in the Asia Pacific project finance arena, with a slew of jumbo financings set to emerge from Oceania in the next 18 months. Stakeholders in the Papua New Guinea Liquefied Natural Gas project are in discussions with export credit agencies and commercial banks for up to US$9.8bn of debt to fund the next phase of the project, in what will be the region’s biggest project financing since 2010. Another major deal is also in the works as Australia Pacific LNG prepares to refinance US$3bn of project debt. JP Morgan has been named financial adviser. The long-awaited expansion of the PNG LNG project is estimated to cost around US$12bn-$14bn and involves construction of three new gas processing units, called trains, at the Papua New Guinea LNG plant. It is the largest resources-related borrowing in Oceania since March 2010, when the PNG LNG project raised US$14bn in initial funding from ECAs, commercial banks and lead sponsor and operator ExxonMobil. The US$1.95bn commercial portion attracted 17 banks. PNG LNG is already operational.

https://af.reuters.com/article/commoditiesNews/idAFL3N1ZI2UD


Saudi Aramco Hiring Funding Advisers for a $5 Billion Project

(Bloomberg, London, 17 January 2019) Satorp, the joint venture between Saudi Aramco and Total SA, hired Sumitomo Mitsui Banking Corp. and Riyad Bank to help raise funds to develop a petrochemical facility in the kingdom. Financing for the $5 billion Amiral project is expected to be arranged from banks and export credit agencies. The facility will be in Jubail in the eastern province where the JV already operates a refinery and will convert fossil fuels into building blocks for plastics. Saudi Arabia is seeking to transform its oil-dependent economy by developing new industries, and is pushing into petrochemicals as a way to earn more from its energy deposits. The Amiral complex will be able to produce 2.7 million tons of chemicals annually and will be completed by late 2023 or early 2024. Aramco, as Saudi Arabian Oil Co. is known, owns 62.5 percent of Satorp, while Total holds the rest.

https://www.bloomberg.com/news/articles/2019-01-17/saudi-aramco-refinery-jv-said...


Mozambique looks for LNG ECA financing despite market scepticism

(Macauhub, Macau, 11 January 2019) The government of Mozambique has been involved in the last few weeks in intense negotiations with seven countries to secure funding for one of its largest natural gas projects and overcome scepticism about whether it will honour its debt commitments. The Rovuma Area 1, in the Rovuma Basin, involves an estimated investment of US$25 billion. The talks involve seven Export Credit Agencies (ECAs), including Japan (JBIC), China (China ExIm), South Korea, USA (US-Exim), Germany [sic] (Atradius) and Italy (Servizi Assicurativi del Commercio Estero – SACE). The ECAs are evaluating the possibility of funding the Rovuma Area 1 project, which is operated by Anadarko which has been the subject of multiple environmental cases. In discussing the risks of the LNG project, the government has ignored the threat posed by armed insurgent attacks in Cabo Delgado. Most international analysts believe that they will not threaten the projects; but the state’s inability to control the attacks affects the country’s image as a safe investment destination and a place for expatriates.

https://macauhub.com.mo/feature/mozambique-looks-for-lng-financing-despite-marke...


Remember the Export-Import Bank

(Eakinomics, Washington, 17 January 2019) The Export-Import Bank is due to be re-authorized in September 2019. The re-authorization of Ex-Im in 2015 became a pitched battle over whether it was an appropriate role for the government. While the arguments against market intervention make sense, until other countries scale back their use of ECAs, the Ex-Im Bank is a necessary evil to level the playing field. The decline in Ex-Im activity is clear in the graph (below)... there are about $30 billion in ECA activity in the G-7 and $50 billion among the BRIC countries. The bank is unable to approve any transactions greater than $10 million in value because it has not had a quorum of 3 voting board members since 2015. Given the lack of a quorum, as of Summer 2018, there are $43 billion in transactions awaiting approval. The administration resubmitted the nomination of Kimberly Reed to be president of the Ex-Im Bank and for Spencer Bachus III, Judith DelZoppo Pryor and Claudia Slacik to serve on its board of directors. All had been previously nominated by the administration, and the Senate Banking Committee had favorably reported them, but the full Senate did not take up their nominations.

https://www.americanactionforum.org/daily-dish/remember-the-export-import-bank


Extension of interest subsidy scheme to boost Indian export credits

(News Today, Chennai, 4 January 2019) The Indian government has to provide three per cent [export credit] interest subsidy to merchant exporters, entailing an expenditure of Rs600 crore (US$84 million), to enhance liquidity with a view to boosting outbound shipments. Sectors that will be benefited from the decision include agriculture, textiles, leather, handicraft and machinery. The interest equalisation or subsidy scheme for pre- and post-shipment rupee export credit started on 1 April, 2015 and will end in March 2020. Other news sources indicated that interest subsidies had dropped from Rs434 crore in 2017 to Rs197 crore in 2018 (US$60m to US$28M). The Union Cabinet in mid-Janurary committed to infusing US$840 million into the Exim Bank over 2 years and doubling its authorized capital from US$1.4 billion to US$2.8 billion (Rs10,000 crore to Rs20,000 crore)

https://newstodaynet.com/index.php/2019/01/04/extension-of-interest-subsidy-sche...


NEXI insures UKEF credit for Boeing export to Colombia's Avianca

(NEXI, Tokyo, 18 January 2019) Nippon Export and Investment Insurance (NEXI) has decided to provide reinsurance on export credit provided by UK Export Finance (UKEF), the export credit agency of the United Kingdom of Great Britain and Northern Ireland (UK), for export of one Rolls Royce-powered Boeing 787-8 aircraft to Avianca S.A.. The provision of this reinsurance is based on the reinsurance agreement concluded between NEXI and UKEF on August 30, 2017.

https://www.nexi.go.jp/en/topics/newsrelease/2018121902.html


US Export-Import Bank reopens programs for Ukraine

(Kyiv Post, Kyiv, 8 January 2019) The Export-Import Bank of the United States has reopened its programs for Ukraine after a five year pause, the Washington-based U.S.-Ukraine Business Council stated. Through ten months of 2018 bilateral trade between Ukraine and the U.S grew slightly to $3.1 billion, in comparison to 2017’s $2.84 billion yearly total, according to official statistics. Leading U.S. exports to Ukraine in 2018 were coal ($655 million), motor vehicles ($260 million) and civilian aircraft ($217 million). In the same 10-month period, Ukraine’s top exports to the United States were iron products ($707 million) and sunflower products ($27.3 million).

https://www.kyivpost.com/ukraine-politics/us-export-import-bank-reopens-programs...


Indonesia looks to ECA funding for aerial refuelling tanker-transports

(Jane's Defence Weekly, Singapore, 25 January 2019) The Indonesian Air Force (TNI-AU) has completed a study on the country's aerial refuelling requirements and has proposed the acquisition of two new airframes for the service, outlining a budget requirement of about USD500 million, proposing that the funds be drawn down from foreign defence export credit loans. Jane's first reported in January 2018 that the TNI-AU had begun a preliminary study to compare the A330 multirole tanker-transport (MRTT) from Airbus and the KC-46A Pegasus from Boeing. Russia's four-engine Ilyushin Il-78 was also later included in the study.

https://www.janes.com/article/85954/indonesia-completes-technical-evaluation-for...


Nord Stream 2 negotiating ECA loans worth 6 bln euros

(TASS, Vienna, 29 January 2019) Nord Stream 2 AG, the operator of the Nord Stream 2 gas pipeline construction project, is conducting negotiations to attract project financing worth 6 bln euros. Chief Financial Officer Paul Corcoran told reporters "We are still in discussions with export credit agencies." The Nord Stream 2 pipeline is expected to come into service at the end of 2019. The pipeline is set to run from the Russian coast along the Baltic Sea bed to the German shore. It will go through the exclusive economic zones and territorial waters of five countries - Russia, Finland, Sweden, Denmark, and Germany, thus bypassing transit countries of Ukraine, Belarus, Poland and other Eastern European and Baltic states. Each of the pipeline’s two stretches will have a capacity of 27.5 bln cubic meters. The total cost of the project has been estimated at 9.5 bln euro. Nord Stream 2 AG, with Gazprom being the only shareholder, is the operator of the Nord Stream 2 pipeline construction project. Gazprom's European partners in the project are Germany’s Wintershall and Uniper, Austria’s OMV, France’s Engie and Royal Dutch Shell.

http://tass.com/economy/1042221


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