The US House and Senate have now passed bills reauthorizing the federal government’s Export-Import Bank (Ex-Im Bank) through 2014 – it awaits President Obama’s signature to become law.
The role of Ex-Im is to foster exports by US companies. Last year, the Bank provided $75 million in long-term loans to India solar projects so they could buy US-made solar panels.
Its "Solar Express" product provides streamlined financing for US exports to small solar-energy projects and Environmental Exports Program offers risk protection and capitalization of interest during construction for efficiency, renewable energy and other environmental-related exports. Suniva received support because it exports most of its solar products.
Still, 90% of its portfolio finances fossil fuel projects – $4.5 billion in 2011 – six times as much as for renewable energy.
Examples of massive coal-fired power plants include $805 million for a 4800 megawatt (MW) plant in South Africa and a 4000 MW plant and mine in India, among the world’s largest.
"By passing today’s Ex-Im Bank reauthorization, the Senate ensured that some of the country’s most profitable and polluting companies, like ExxonMobil, will continue to enjoy billions of dollars in public subsidies, leaving behind them a wake of damaged environments and harmed communities," says Doug Norlen, Policy Director at Pacific Environment.
Previous versions of the legislation prioritized renewable energy and n independent accountability mechanism to address the growing number of severe violations of the agency’s environmental and social policies. Neither is in the final bill.
One provision will be useful, however. Public notice and a comment period is required for any transaction over $100 million, which will cover many Ex-Im Bank fossil fuel projects.
Ex-Im is also required to initiate and pursue negotiations with other countries’ export credit agencies to substantially reduce – with the ultimate goal of eliminating – subsidized export financing programs and other forms of export subsidies. Many export credit agencies subsidize fossil fuel projects.
"When negotiating to end export financing subsidies, the Obama Administration should start by cutting the Ex-Im Bank’s bloated support for fossil fuel projects," says Michelle Chan, Economic Policy Director at Friends of the Earth. "This would go a long way towards demonstrating that the U.S. is serious about Obama’s G20 pledge to phase out fossil fuel subsidies."
"It’s bad enough that the Obama Administration pawns publicly-owned coal for export, and seriously entertains approval of the tar sands pipeline. Now it is complicit in an Export-Import Bank reauthorization bill without any requirement to clean up the agency’s portfolio. It’s as if the Obama Administration wants to push climate pollution," says Kyle Ash, Senior Legislative Representative, Greenpeace.
Ex-Im Bank is an independent federal agency that’s tasked with helping to create and maintain U.S. jobs by filling gaps in private export financing at no cost to American taxpayers. The Bank provides a variety of financing mechanisms, including working capital guarantees, export-credit insurance and financing to help foreign buyers purchase U.S. goods and services.