OECD signs greener export credit rules
Members of the Organisation for Economic Co-operation and Development (OECD) have approved a set of rules aiming to improve the environmental framework surrounding export credit.
Two agreements have been signed, including an updated version of the OECD’s 2007 recommendation on environmental and social provisions for the export of capital goods and services qualifying for official export credits; and “financially prudent” incentives for the financing of large projects that help mitigate climate change.
Participating countries may now support export projects credits with up to a 15 or 18-year repayment term, and use flexible repayment structures for long-lived projects. Several advanced technologies have been added to the list of projects with 18-year repayments, including carbon capture and storage, fuel substitution (waste to energy projects, hybrid power plants) and projects that promote energy efficiency.
In the past three years, only renewable energy projects were eligible for long-term financing.
“The terms and conditions for each project will have to meet several environmental standards and be financially justifiable. This agreement will be reviewed regularly to ensure that future technologies will be included within the scope of the Sector Understanding on Export Credits,” says the OECD.
The new recommendation results from negotiations and consultations with relevant stakeholders, such as non governmental organisations, business and banking groups, labour unions, and other international organizations, with UN secretary general’s special representative on business and human rights John Ruggie also providing input.