Wealthy nations have agreed in principle to require their export credit bureaus to provide financing for a number of “climate-friendly and green” projects on more favourable conditions.
The European Union and a group of 13 countries decided to reduce insurance costs and extend loan repayment terms for projects including low-emission transportation, electrical infrastructure, and renewable energy.
The head of the Organisation for Economic Co-operation and Development (OECD), Matthias Cormann described the deal as a “great milestone to help increase the impact of trade and finance flows on securing our climate objectives”.
However, proponents assert that there is no precise definition of “green projects” and have criticized the inclusion of technologies like carbon capture and storage and hydrogen.
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They assert that industry will benefit from the reform, possibly for polluting initiatives, as many hydrogen and CCS projects are driven by fossil fuel firms.
The agreement is a piece of a reform package negotiated inside an OECD group in charge of establishing guidelines for member states’ export credit agencies (ECAs).
The USA, France, Germany, Italy, Canada, the UK, Japan, the European Union, South Korea, New Zealand, Australia, Norway, Switzerland, and Turkey are among the participants.
After national ECAs have put the reform into place, it is anticipated to take effect later this year.
Story was adapted from Climate Home News
