Perspectives 2019 2020 Public Sector

58 New Trends in Official Agency-Backed Financings for Public Sector Borrowers ECA-backed export credit has been an established source of financing for public sector borrowers since the late 1970s but the demands of the market have evolved over time. There is now a much larger variety of support programs from ECAs, ranging from untied loans to support for non-recourse project finance structures. A multitude of financial institutions provide funding on the back of official agency support. Recently, institutional investors have shown increasing interest in the asset class, enabling public sector borrowers to achieve attractive terms and abundant liquidity to finance their projects. Over the past decade, certain ECAs have differentiated themselves with more flexible content rules based on national interest rather than origin and sourcing of equipment; some ECAs have lowered the content thresholds for a project to be eligible for their guarantees. Trends in ECA finance continue to evolve as global trade flows change in direction. Compelling governments to design new export finance products and enhance existing ones to support their exporters facing challenges in various markets. Sustainable Lending Climate change and social developmental goals have gained significant emphasis in multilateral agencies’ lending and guarantee programs. Recently the world’s six largest DFIs released their Joint 2018 Report on Climate Finance. These DFIs climate financing commitments grew to an all-time high of $43 billion in 2018, a 60% increase since the adoption of the 2015 Paris Climate Accords. The World Bank Group (WBG) drove most of the climate finance growth in 2018, increasing its climate finance commitments to $21 billion, up 60% from 2017. Other multilaterals such as Asian Infrastructure Investment Bank, Asian Development Bank or African Development Bank have aligned their strategies with the United Nations 2030 Agenda for Sustainable Development to focus on renewable energy projects or supporting sustainable cities, among others. 0 10,000 20,000 30,000 40,000 50,000 Agri/Soft Commodities Manufacturing Telecoms and Communications Metals and Mining Chemicals/ Petrochemicals Capital Equipment Transport Other Infrastructure Power Oil & gas 2019 2018 2017 2016 2015 2014 2013 Source: TXF Industry Breakdown — Export Finance for Public Sector Borrowers ($ millions)