EXIM: Gas Plant Finance Draws Fire

The Export-Import Bank of the U.S.  Board of Directors approved a $90 million guarantee under EXIM’s Supply Chain Finance Guarantee Program to Dutch Financier ING Capital to finance U.S. Natural Gas processor Freeport LNG Marketing.

In 2020 Exim approved a deal with Freeport LNG, "with the first-ever use of a funder guarantee structure" for  $50 million.  That deal was a "tripartite agreement"  between EXIM, Private Export Funding Corporation (PEFCO) , and the scandal-plagued, now insolvent Greensill Capital.

In June 2022 a blast attributed to safety failures caused approximately $275 million in damages and took the plant offline for 18 months.

In December 2023 Freeport LNG agreed with the U.S. Environmental Protection Agency to settle safety violations related to the blast.  The consent agreement included a civil penalty of $163,054 for breaking chemical accident prevention rules under the Clean Air Act.

Governence Objections

“It’s utterly galling that EXIM would even consider government support for a company owned by a billionaire who fails to employ enough workers to operate safely, destroys the climate, and literally exploded last year — which incidentally caused chaos in global gas markets,” said Jeffrey Jacoby, Deputy Director with Texas Campaign for the Environment.

“EXIM’s logic in supporting this project is baffling — why would they want to double down on this disastrous project?” said Kate DeAngelis, Senior International Finance Program Manager with Friends of the Earth. “Shortly after EXIM’s first round of support to Freeport LNG, the finance group involved collapsed and the project exploded. Yet EXIM seems willing to fund any fossil fuel project no matter how financially ruinous or harmful to workers, local communities, and the planet.” 

OECD Complaint

Earlier in the month Friends of the Earth U.S. submitted an international complaintagainst the U.S. Export-Import Bank over its financing of overseas fossil fuel projects. The complaint, filed by Friends of the Earth United States, argues that EXIM is contravening the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct by continuing to pour billions into fossil fuel projects, while taking no effective action to reduce its emissions or report on its emissions footprint.