US Exim Bank criticized for providing credit finance to Mega Coal Power Plants in India and Africa

US Export Import Bank (Exim) is a government owned financial institution which helps support US trade through credit financing of exports/imports of US companies.The Bank is also an instrument of US government policy which supports renewable energy and acts against climate change.However its recent policy actions have been criticized heavily by environmental groups for supporting dirty energy in developing countries of Asia and Africa.Note Exim Bank already support Energy Projects 95% of which are based on Fossil Fuels.The Exim bank has come under fire for succumbing to US business lobbies for providing credit financing to the tune of $560 million for coal mingin equipment to be supplied by Bucyrus International  to India’s Reliance Power’s massive Sasan Coal Plant.This financing which was rejected 3 weeks ago has been “reconsidered” ostensibly due to Reliance Power’s 250 Renewable Energy Plant.

Note the order 3 weeks ago had found huge opposition from political and business groups.The usual reasons  were touted for opposing this order such as loss of  jobs,loss of orders etc etc.There was no consideration for the fact that Coal is the dirtiest form of energy and needs no explicit and implicit subsidies.It is estimated that Fossil Fuels get $550 Billion in Subsidies globally and this is one the major reasons behind the slow uptake of Green Energy forms like Solar,Wind,Geothermal etc.Such retrograde decisions under pressure from vested interests will help neither US nor India ,only the profiting business and political groups.Environmental groups are lobbying to force multilateral lending institutions like the Exim Bank,World Bank and IFC to consider GHG emissions in their lending decisions.Even US officials are talking about it.However action speak louder than words.

U.S. Export-Import Bank Reconsiders India Coal Financing Deal – Bloomberg

The U.S. Export-Import Bank will reconsider its rejection of a loan guarantee for Bucyrus International Inc. so it can sell coal-mining equipment for a power project being developed by India’s Reliance Power Ltd.The bank acted after Democratic lawmakers in Wisconsin, where Bucyrus is based, appealed the rejection last week of $560 million in financing on environmental grounds. Reliance told the bank it may buy U.S. equipment for a renewable energy project, bank Chairman Fred Hochberg said in a letter.

The bank “will take into account Reliance’s expressed commitment to invest in the renewable energy sector” in its review, Hochberg wrote to Reliance chairman Anil Ambani today.Bucyrus would lose an order worth as much as $560 million for electric drag lines and rope shovels to mine coal without getting the Export-Import bank’s guarantee, Bucyrus Chief Executive Officer Timothy Sullivan said in an interview June 28. The financing request was turned down last week as part of the lender’s review of the project because of its potential carbon emissions.

Exim bank applauded for decision on Sasan – Business Standard

A San Francisco-based non-profit organisation, Pacific Environment’s Responsible Finance Program holds public banks such as the US Export-Import Bank accountable to taxpayers, project-impacted communities and the environment.The group issued statement after the businesses and local politicians in Wisconsin asked President Barack Obama and Ex-Im Bank to reverse its decision, with regard to not approve the financing the project as it would result in hitting as many as 1,000 jobs in the US.

The 3,960 megawatt (MW) Sasan coal power and mine is one of the 9 earmarked ‘ultra-mega’ coal-fired power stations proposed by the Indian government as an effort to reach specific energy capacity goals by 2017.The project would release vast amounts of pollution into the local environment and the global atmosphere. The annual greenhouse gas emissions from this project alone would nearly triple the total annual emissions of all fossil fuel projects approved by Ex-Im Bank in 2009, the statement said.

“We have been long concerned that Ex-Im Bank’s fossil fuel financing has been skyrocketing, and support for Sasan would have sent those emissions off the charts,” said Norlen, adding we hope the decision on Sasan marks a pivotal point for Ex-Im Bank as they avert future involvement with harmful fossil fuel projects.

Ex-Im Bank’s decision to decline support for Sasan brings the federal government export credit agency more in line with the rest of the Obama Administration’s efforts to reduce fossil fuel subsidies and expand support for renewable energy and energy efficiency, the NGO said.

U.S. eyes geothermal for Exim Bank’s $1 bln Indonesia credit – Reuters

Part of a $1 billion credit facility backed by the Export-Import Bank of the United States (Exim Bank) for Indonesia should be used to help develop clean energy projects such as geothermal power, a senior U.S. official said on Monday.The U.S. Exim Bank announced in late June it had pre-approved 11 Indonesian banks to receive funds under the scheme, which aims to make credit available to public and private sector businesses under low or fixed-interest rates.

U.S. companies currently have $18 billion worth of investment in Indonesia, which boasts the potential to produce an estimated 27,000 megawatts of electricity from geothermal sources.U.S. energy major Chevron Corp is among firms that have bid for a geothermal power project in Indonesia, as the country seeks to boost erratic power supply and cut its greenhouse gas emissions.

However, geothermal energy production is expensive and struggles to compete in Indonesia, where fossil fuels are heavily subsidized.