- Boost Renewable Funding
Seven countries in Europe have committed to a plan that will see them stop public export guarantees for fossil fuel projects, raising fresh concerns for Nigeria and many countries around the world whose economies are heavily dependent on oil and other fossils.
The French Finance Minister, Bruno Le Maire disclosed this in Paris, Tuesday.
The countries backing the initiative include: France, Germany, United Kingdom, Spain, the Netherlands, Denmark and Sweden.
The move is part of efforts to curb public finance for high-emissions energy sources that have aggravated the impact of climate change.
In countries, The New Diplomat understands that export financing is a cash flow solution for exporters to facilitate international trade and finance.
“Coal, oil and gas infrastructure have traditionally made up a large share of the portfolios of many other countries’ public export finance agencies, which support exports through state-backed financing guarantees and insurance against losses abroad.
“Britain, France and Sweden have already laid out plans to halt export guarantees for the fossil fuel sector while the other countries in the group have yet to decide how fast they will phase out their support.” Reuters reported, Wednesday.
According to Le Maire: “We are totally determined to stop all export guarantees financing fossil fuels while taking into account each country’s industrial specifics and the impact on jobs.”
Speaking before a meeting on Wednesday where the pledge was formalised, Le Maire added that he hoped U.S. President Joe Biden’s administration would join the group, which together accounts for 40% of export finance among OECD countries, following an upcoming review of U.S. export finance.
Le Maire also said the seven countries would commit to supporting climate-friendly projects and transparency in their export finance policies.
On Wednesday, the alliance named the Export Finance for Future (E3F) coalition was announced, following a virtual meeting hosted by the Directorate General of the Treasury, a unit of France’s finance ministry.
“Today, for the first time, several countries publicly committed to massively increase support for sustainable projects and to assess how to best phase out export finance support to oil and gas industries,” French finance minister said at the meeting Wednesday, adding that “the moment is decisive.”
The New Diplomat’s check reveals that the latest initiative by the seven European giants will spell doom for Nigeria and other big oil producers from economic standpoint.
Oil revenue still accounts for over 90% of export earnings for Africa’s largest economy and as conversation around renewable energy takes center stage, experts have argued that the country’s mono-economy faces a diminished future.
This is on the back of the global race to limit CO2 emissions in line with commitments by countries of the world to realise the objectives of the Paris Agreement and limit the existential threat of climate change.