On 22 April 2021 President Joe Biden announced his International Climate Finance Plan as a follow up to his January 2021 Executive Order 14008 on Tackling the Climate Crisis at Home and Abroad.
The International Climate Finance Plan reflects the administration's desire to double, by 2024, US annual public climate finance to developing countries, using as a baseline the average level during the second half of the Obama administration. The purpose is to help developing nations reduce or avoid greenhouse gas emissions and "build resilience and adapt to the impacts of climate change".
The International Climate Finance Plan is also supposed to be a boon to US companies, particularly manufacturers of products and technologies viewed as environmentally beneficial. Accordingly, the Export-Import Bank is expected to play a key role in helping the administration to achieve its stated goals. As the US government's official export credit agency, the Export-Import Bank provides direct loans, loan guarantees and export credit insurance in support of exports of US goods, services and technologies. By helping foreign buyers (public and private), the Export-Import Bank fills gaps in private export finance and supports US jobs.
The International Climate Finance Plan will likely mean a great deal to domestic companies in the environmental and renewable energy sectors. The bank will work even more diligently to identify new transactions and offer favourable credit terms to foreign buyers in developing nations, which bodes well for US companies that already export or are considering entering the global marketplace.
The Export-Import Bank's role is highlighted in the executive summary of the new plan. The president has tasked the agency with "identify[ing] ways to significantly increase, as per its mandate, its support for environmentally beneficial, renewable energy, energy efficiency, and energy storage exports from the United States". The Export-Import Bank will do this in conjunction with other US agencies, including:
- the US International Development Finance Corporation (formerly the Overseas Private Investment Corporation);
- the US Trade and Development Agency;
- the Department of State;
- Millenium Challenge Corporation; and
- the US Agency for International Development.
The involvement of the Export-Import Bank offers new opportunities for US companies in the environmental and renewable energy sectors that are currently exporting or are considering engaging in transactions with foreign buyers. The Export-Import Bank has some particularly attractive financing tools to help domestic companies with working capital lines of credit and to help prospective foreign buyers afford US exports.
