Enhanced Export Credit Agency Financing Terms
in Response to Climate Change
(September 17, 2009)
The following memo focuses on the appropriateness of enhanced financing terms being
negotiated by the Participants to the Arrangement on Officially Supported Export Credits
(Participants) in response to the challenge of climate change.
1) General principles
Public financing from export credit agencies is a limited public commodity and should be
specially designed for and restricted to public interest purposes. Therefore, some over-
arching general principles should be applied when considering whether and how to
provide enhanced financing terms for a technology or activity in response to climate
change:
• Long Term Perspective on Climate Impacts: The technology or activity should
be truly helpful for long-term climate stabilization and should not serve to
perpetuate energy paths that worsen climate change. For example, public support
for so-called “clean” coal perpetuates reliance on fossil fuel, while directing
public resources away from clean technologies such as wind power. Also, export
credit agencies often support projects that have long lifespans, so negotiations
should consider what will be considered helpful or harmful energy technology
paths in, say, 15 years.
• Environmentally and Socially Responsible: In addition to mitigating
greenhouse gas emissions, the technology or activity should not have other,
unacceptable environmental and social side effects, such as carbon offset projects
that convert primary tropical forests or large scale projects that involuntarily
displace communities.
• Transformative: Use of scarce public financing should focus on technologies or
activities that are transformative towards a low carbon energy pathway. Enhanced
financing terms should cause a demonstrable shift in energy production methods
and consumption patterns, and not simply be an add-on to mainstream
approaches.
• Ready or Close-to-Ready for Deployment: The technology or activit