How Ex-Im Bank Levels the Playing Field With Russia

Ted Jones

The following is a guest post by Ted Jones, Director of International Supplier Relations for NEI.

Last week, the Export-Import Bank of the United States released its annual Competitiveness Report to the U.S. Congress. The report highlighted “the ballooning of export finance around the world, particularly of the opaque, non-OECD-compliant variety.” This growth of export finance on “terms more lenient than the [OECD] Arrangement, with rates below what EXIM can offer and minimal risk-related fees,” threatens to undermine U.S. competitiveness, the report warned. Perhaps no sector illustrates the threat posed by non-OECD export finance as starkly as nuclear energy.

We have explained why Ex-Im Bank is essential for U.S. suppliers to be competitive in international nuclear energy markets. When the foreign competition is bound by OECD limits, Ex-Im Bank provides a somewhat level playing field for U.S. suppliers. When the foreign competition is unchecked by OECD rules, Ex-Im Bank cannot level playing field but keeps U.S. suppliers in the game.

As a result of U.S. leadership, the OECD has adopted uniform lending and transparency rules to prevent a global financing race to the bottom. In the nuclear sector, it has agreed to further restraints in a Nuclear Sector Understanding (NSU). Among other limits, the NSU sets minimum interests rates and maximum repayment terms; requires the repayment of principal and the payment of interest in equal installments at least twice annually; and prohibits the capitalization of interest. Nuclear energy supplier countries subject to OECD rules include Australia, Canada, members of the European Union, Japan, Korea, New Zealand, Norway and Switzerland.

Russia is not a member of the OECD and is not bound by the NSU. Russia has a made a strategic priority of capturing a larger share of the global nuclear energy market. With 13 reactors under construction around the world and many more under contract, it is progressing toward a target of 70 percent growth in nuclear energy exports by 2020. Russian nuclear energy exports have been promoted with Russian equity, Russian submarines and fear. But the consistent, decisive factor in the growth of Russia’s nuclear energy market share has been aggressive Russian financing. Finance for Russian nuclear exports comes from the Russian treasury rather than from a national export credit agency like Ex-Im Bank. While details of Russian finance are shrouded in secrecy, it has been known to feature interest rates well below OECD limits, capitalization of interest against OECD rules and generous repayment terms.

The Ex-Im Bank is vital for U.S. nuclear suppliers to compete against foreign suppliers operating under OECD restraints. Against non-OECD suppliers like Russia, the Ex-Im Bank keeps U.S. suppliers in the game. Despite inferior financing, a U.S. supplier with backing from the Ex-Im Bank meets the tender requirements of ECA support and reaches the negotiating table to discuss superior U.S. technology, operational know-how, training and industrial partnership. Without Ex-Im Bank, the U.S. nuclear supplier is out of the game – against OECD and non-OECD competition alike.

A Design Team Pictures the Future of Nuclear Energy

For more than 100 years, the shape and location of human settlements has been defined in large part by energy and water. Cities grew up near natural resources like hydropower, and near water for agricultural, industrial and household use.

So what would the world look like with a new generation of small nuclear reactors that could provide abundant, clean energy for electricity, water pumping and desalination and industrial processes?

Hard to say with precision, but Third Way, the non-partisan think tank, asked the design team at the Washington, D.C. office of Gensler & Associates, an architecture and interior design firm that specializes in sustainable projects like a complex that houses the NFL’s Dallas Cowboys. The talented designers saw a blooming desert and a cozy arctic village, an old urban mill re-purposed as an energy producer, a data center that integrates solar panels on its sprawling flat roofs, a naval base and a humming transit hub.

In the converted mill, high temperat…

Sneak Peek

There's an invisible force powering and propelling our way of life.
It's all around us. You can't feel it. Smell it. Or taste it.
But it's there all the same. And if you look close enough, you can see all the amazing and wondrous things it does.
It not only powers our cities and towns.
And all the high-tech things we love.
It gives us the power to invent.
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To create advanced technologies.
This invisible force creates jobs out of thin air.
It adds billions to our economy.
It's on even when we're not.
And stays on no matter what Mother Nature throws at it.
This invisible force takes us to the outer reaches of outer space.
And to the very depths of our oceans.
It brings us together. And it makes us better.
And most importantly, it has the power to do all this in our lifetime while barely leaving a trace.
Some people might say it's kind of unbelievable.
They wonder, what is this new power that does all these extraordinary things?

Seeing the Light on Nuclear Energy

If you think that there is plenty of electricity, that the air is clean enough and that nuclear power is a just one among many options for meeting human needs, then you are probably over-focused on the United States or Western Europe. Even then, you’d be wrong.

That’s the idea at the heart of a new book, “Seeing the Light: The Case for Nuclear Power in the 21st Century,” by Scott L. Montgomery, a geoscientist and energy expert, and Thomas Graham Jr., a retired ambassador and arms control expert.

Billions of people live in energy poverty, they write, and even those who don’t, those who live in places where there is always an electric outlet or a light switch handy, we need to unmake the last 200 years of energy history, and move to non-carbon sources. Energy is integral to our lives but the authors cite a World Health Organization estimate that more than 6.5 million people die each year from air pollution. In addition, they say, the global climate is heading for ruinous instability. E…

NEI Nuclear Notes

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