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A meeting of the OECD Arrangement on export credits ended last week without an announcement of a breakthrough on any key planks in its modernisation agenda.

The participants to the pact, a so-called gentlemen’s agreement between developed countries on common standards for officially supported export credits, met in Paris last week amid an ongoing debate over its future shape.

The arrangement was created to avoid like-minded countries from undercutting each other on pricing but has been undermined by the fact that major export credit providers such as China and India are not members.

Commercial banks, export credit agencies (ECAs), the European Union and governments who host export credit-supported projects have called for changes to minimum pricing, tenors and clear rules on sustainable financing to ensure that OECD ECAs remain competitive and can support a broad range of projects.

Sources tell GTR there were no major agreements on modernisation reached at last week’s meeting. An OECD spokesperson declined to comment or disclose what was discussed during the negotiations and said a public statement would only be made when agreement was reached.

Paola Valerio, chair of the OECD working party on export credit and credit guarantees, also declined to comment because the negotiations are ongoing. The OECD Arrangement says on its website that the participants hope to reach an agreement this month.

Oil Change International, an NGO that campaigns for an end to public finance for fossil fuels, says it is disappointed that there was no apparent agreement on the Climate Change Sector Understanding (CCSU) aspect of the arrangement in order to boost incentives for green projects.

Nina Pušic, export finance climate strategist at Oil Change International, says: “The world cannot afford another wasted minute – the OECD must stop procrastinating and start showing ambitious action.” Last week 175 civil society institutions called on the arrangement members to end support for fossil fuel projects by their ECAs.

The European Council made a similar statement last year, calling on the European Commission to push the OECD Arrangement participants to “reach an agreement on ending officially supported export credits for projects in the fossil fuel energy sector, beyond coal and including oil and natural gas projects”.

A November 2022 letter from International Chamber of Commerce (ICC) secretary general John Denton to the OECD Arrangement participants said the organisation “understands” that significant progress had been made on reforming the CCSU, such as including “new technologies that support climate adaptation and mitigation, while extending repayment terms”.

More broadly, the letter added that progress had been made on other changes such as extending repayment terms and flattening the ECA premium curve for longer tenor projects, which the ICC supports.

But Denton also called for further changes to the CCSU, including the introduction of incentives for green projects. The organisation also urged the arrangement participants to consider longer tenors for social infrastructure projects.

The European Council, which comprises EU member states, has also been vocal on the need for reform of the OECD export credit framework, which it said last year has “not been sufficiently modernised, given the evolution of global value chains and the international competition from non-OECD countries”.

“Even though there has been increased progress in the negotiations on the OECD Arrangement, they are still not keeping up with the pace demanded by both changing economic and climate environments.”

The most recent major changes to the OECD’s export credit rules were in 2021 when the participants increased the maximum local content allowed in ECA-backed projects to accommodate growing demand from host countries, and also approved a ban on support for unabated coal.