Products & Policies | Ex-Im Bank Policies | Environment

Environmental Procedures and Guidelines

Introduction

I. Overview of Ex-Im Bank's Environmental Procedures

II. Application Screening and Categorization, and Environmental Information Requirements

III. Sources of Environmental Information

IV. Environmental Information Requirements Pertaining to Ex-Im Bank Programs

V. Project Monitoring

List of Annexes

Annex A: International Environmental Guidelines

Table 1 -	Environmental Guidelines for Private Sector Category A Projects Required Guidelines for Category A Projects structured as Limited Recourse Project Finance Recommended Guidelines for Category A projects structured as Corporate Risk
	Applicable International Guidelines: IFC Performance Standards on Social & Environmental Sustainability IFC Environmental Health and Safety (EHS) Guidelines
Table 2 -	Environmental Guidelines for Public Sector Category A Projects Required Guidelines for Category A Projects structured as Sovereign Risk Alternative Guidelines for Category A projects structured as Corporate Risk
	Applicable International Guidelines: World Bank Safeguard Policies (Operational Policies) IFC Environmental Health and Safety (EHS) Guidelines
Table 3 -	Environmental Guidelines for Category B Projects Required Guidelines for all Projects that are Classified as Category B
	Applicable International Guidelines: IFC Environmental Health and Safety (EHS) Guidelines (new projects and expansion or upgrade of existing plants or facilities undergoing a material change in capacity or function)

Annex B          Environmental Screening Document

Annex C          List of Pesticides, Chemicals, and Substances Ineligible for Export Credit Insurance

Annex D          Illustrative List of Category A Projects (projects requiring an EIA)

Annex E          Environmental Impact Assessment Reports

Annex F          Environmental Exports Program

INTRODUCTION

The Charter of the Export-Import Bank (Ex-Im Bank) requires the Bank to establish procedures to take into account the potential beneficial and adverse environmental effects of goods and services for which support is requested, consistent with the mandate to foster expansion of exports.  The Charter also authorizes the Board of Directors, in its judgment, to grant or withhold financing support after taking into account the beneficial and adverse environmental effects of proposed transactions.

In addition, the Charter directs the Bank to operate its financing programs in a manner that is competitive with support offered by principal countries whose exporters compete with U.S. exporters. In response to these Congressional mandates, Ex-Im Bank will act to maintain U.S. exporters' competitiveness in the global marketplace while taking into account the environmental effects of the projects it supports.

In 2007, agreement was reached among the Export Credit Group of the Organization for Economic Cooperation and Development (OECD), which includes the United States, on adoption of the “Revised Council Recommendation on Common Approaches on the Environment and Officially Supported Export Credits” (The “Common Approaches”).  The 2007 Common Approaches revised and expanded the earlier version of the Common Approaches that were adopted by the OECD in December 2003.  Adherence to the Common Approaches is intended to ensure consideration of the environmental effects of projects on a consistent basis among the major Export Credit Agencies (ECAs).  Ex-Im Bank will continue to work within the OECD to foster compliance among ECAs with the provisions of the Common Approaches and to minimize differences in the way ECAs apply their environmental policies under the Common Approaches.

These 2008 Ex-Im Bank Environmental Procedures and Guidelines are intended to be consistent with the 2007 Common Approaches, and they will remain in effect until such time as they are amended by Ex-Im Bank.   Ex-Im Bank first issued Environmental Procedures and Guidelines on February 1, 1995, and the Procedures and Guidelines were subsequently revised on April 2, 1996, April 2, 1998, and on July 1, 2004 following reviews of their effectiveness in addressing the environmental effects of Bank-supported projects and their effect on the competitiveness of U.S. exporters.  The Procedures and Guidelines have been developed under the direction of Ex-Im Bank’s Engineering and Environment (E&E) Division and reflect input from consultations with U.S. exporters, other U.S. government agencies and non-governmental organizations.

I. OVERVIEW OF EX-IM BANK’S ENVIRONMENTAL PROCEDURES

1. The application of Ex-Im Bank’s Environmental Procedures is tailored to the characteristics of the various Bank programs, in a form consistent with the OECD Common Approaches.

2. All applications for which Ex-Im Bank’s financial exposure is greater than $10.0 million will be screened and categorized as to their potential for environmental impact and the extent, if any, of subsequent environmental review.  Ex-Im Bank will screen and categorize these applications based on information contained in the “Environmental Screening Document” (Annex B) that is submitted by the Applicant.  Only those transactions pertaining to a physical project (any commercial, industrial or infrastructure undertaking that results in the construction or the extraction of a tangible asset at an identified location), which has the potential for adverse environmental effects, will be subject to an environmental review.[1]

3. For  medium-term transactions[2], including those covered under Credit Guarantee Facilities, an environmental review will be undertaken only for those transactions pertaining to physical projects which have the potential for significant adverse environmental effects because they are to be carried out in a sensitive area or are likely to have an adverse impact on such an area.  Ex-Im Bank will screen and categorize medium term transactions based on information contained in the application. 

4. Short-term transactions and transactions having a repayment term of less than two years, including Working Capital transactions, generally will not be subject to environmental screening or review.

5. Ex-Im Bank's Engineering and Environment  Division (E&E Division) will provide advice and counseling to exporters and borrowers unfamiliar with the requirements of these procedures, especially in cases involving small and medium-sized exporters.

6. Applicants are required to provide environmental information sufficient to permit Ex-Im Bank to evaluate the nature and extent of the environmental effects of a project, and effectiveness of proposed mitigation measures.   In the course of undertaking this evaluation, Ex-Im Bank may also make use of information provided by other sources, including government entities, intergovernmental organizations, and non-governmental organizations (NGOs).

7. Consistent with Ex-Im Bank’s Charter and the OECD objective of fostering transparency, predictability and responsibility, and to help elicit useful information concerning the environmental effects of projects from interested parties[3] without disclosing proprietary information related to the project or application, when Ex-Im Bank receives and processes a final application for long-term financing for a physical project requiring an environmental review, it will follow the process set forth below:

1. Ex-Im Bank will list the project, its location and a brief description of the project, on the Pending Transactions List located through its web site at www.exim.gov/products/policies/environment/envproj.cfm
2. In addition to the above, for those applications wherein Ex-Im Bank requires submission of an Environmental Impact Assessment or comparable environmental documentation (hereinafter “EIA”)[4], it will either make a copy of that document available to interested parties[5] or will direct interested parties to a source such as a publicly accessible web site, where the document can be reviewed.  The EIA will be made available immediately upon its receipt by Ex-Im Bank, though in no case for fewer than 30 days prior to issuance of a final commitment. 
3. Following execution of the relevant financial agreements, Ex-Im Bank will make available on its web site a comprehensive summary of the material environmental requirements associated with its financial support, including a list of the supplemental environmental reports required of the borrower, a summary of the type of information which the respective reports should contain and the date when the reports are to be submitted.  In addition, Ex-Im Bank will make available the supplemental environmental reports (including remediation or mitigation plans and procedures, and related monitoring reports) that it requires the borrower to submit. Generally, the information contained in these reports is intended to reflect the project’s level of compliance with Ex-Im Bank’s environmental guidelines and the progress in implementing any required mitigation measures.
4. Instructions on how to obtain the EIA or other available reports will be posted on Ex-Im Bank’s "Major Transactions Pending List” page.  Ex-Im Bank will not disclose business confidential information protected under 18 U.S.C. 1905, or deliberative material generated by the Bank or its consultants.

8. Consistent with the Common Approaches, new projects and projects undergoing significant change in output or function will be evaluated against host-country environmental guidelines and international environmental guidelines.  The international guidelines generally applicable will be those of the World Bank Group (collectively, the World Bank Group Guidelines) as set forth in:

• The ten World Bank Environmental Safeguard Policies (Operational Policies)
• The eight Performance Standards on Social & Environmental Sustainability of the International Finance Corporation (Performance Standards)
• The Environmental Health and Safety Guidelines of the International Finance Corporation (EHS Guidelines)

The Operational Policies, Performance Standards, and EHS Guidelines are listed and described in Annex A of this document.

Annex A sets forth the scope of the environmental guidelines applicable to projects. It contains three tables that set forth Ex-Im Bank’s environmental requirements depending on the environmental category of the project and the financing structure (limited recourse project finance, sovereign risk, or private sector corporate risk) of the underlying transaction. The World Bank Group Guidelines will apply to projects to the extent that the nature and scope of such requirements are consistent with Ex-Im Bank’s statutory mandates and policies.

9. Existing projects undergoing no material change in output or function will be evaluated against host country environmental guidelines, focusing on the environmental risks arising from the existing project, and taking into account the industry sector, location and other available information relating to environmental impacts.

10. For those projects in which the European Bank for Reconstruction and Development (EBRD), the African Development Bank, the Asian Development Bank or the Inter-American Development Bank is involved, Ex-Im Bank may apply the guidelines, in whole or in part, of the respective Multilateral Development Bank (MDB) to the project in order to facilitate U.S. exporter participation in these projects.   In the case of conflict between the MDB guidelines and the applicable World Bank Group Guidelines, the more stringent guidelines will apply as determined by the E&E Division.

11. For those applications relating to nuclear projects, Ex-Im Bank has formulated Nuclear Procedures and Guidelines that are set forth in a separate document.

12. For those projects that may significantly affect the quality of the human environment of the U.S., its territories or possessions, or Antarctica, Ex-Im Bank will require adherence to the National Environmental Policy Act (NEPA) environmental review procedures, as stipulated in 12 CFR, Chapter IV, Part 408.

13. Projects should, in all cases, comply with the relevant environmental standards of the host country.  Where the applicable World Bank Group Guidelines (or other applicable international environmental guidelines) against which the project has been evaluated are more stringent as determined by the E&E Division, the project is expected to meet these guidelines. 

14. Projects are expected to be designed, constructed and operated in a manner that will enable them to maintain compliance, on an ongoing basis, with the environmental guidelines pursuant to which Ex-Im Bank evaluated the project. 

15. If a project does not meet the applicable environmental guidelines, Ex-Im Bank’s Board of Directors is permitted under the Bank’s Charter, in its judgment, to withhold financing or to provide financial support conditioned on the implementation of measures to mitigate the project’s adverse environmental effects.

16. Ex-Im Bank will seek to identify and support projects and products that are environmentally beneficial, including clean, alternative and renewable energy projects. Ex-Im Bank’s Environmental Exports Program (Annex F) is designed to provide special financial incentives for transactions covering projects or products defined in the Program as environmentally beneficial, including those that meet defined environmental benchmarks.  The provisions of the Environmental Exports Program may change prior to subsequent revisions of these Environmental Procedures and Guidelines. 

17. To assist in the management of the major anthropogenic greenhouse gases, carbon dioxide (CO2) and methane(CH4), the Bank will track the estimated amount of CO2 and CH4 emissions from projects that may cause significant production of these gases (50,000 tonnes per year for CO2 and/or equivalent for CH4).   The estimated annual amount of the aggregate CO2 and CH4 (in equivalent tonnes per year of CO2) directly produced by these projects will be reported in Ex-Im Bank's Annual Report.   

18. Consistent with the OECD Common Approaches, Ex-Im Bank will make available to the public a list of those transactions that were approved during the past calendar year for which it conducted an environmental review.

19. Questions, comments or suggestions pertaining to the administration of these Procedures and Guidelines, including those related to the categorization or environmental review of specific transactions, should be directed to the Vice President of the Engineering and Environment Division.  Ex-Im Bank will take into account constructive comments and suggestions, and will endeavor to respond to questions related to the administration of these Procedures and Guidelines in a timely manner.

II. APPLICATION SCREENING & CATEGORIZATION, AND ENVIRONMENTAL INFORMATION REQUIREMENTS

The objective of Ex-Im Bank's Environmental Procedures is to require only the extent and detail of environmental information that is necessary to enable Ex-Im Bank to evaluate and consider the environmental effects of a proposed transaction, and the effectiveness of proposed mitigation measures. The majority of project-related transactions that Ex-Im Bank supports are covered under its long-term[6] programs. Applicants requesting long-term financial support for a transaction must include a completed "Environmental Screening Document" (Annex B) with their applications to Ex-Im Bank. The information contained in this document will enable the E&E Division to screen and categorize the application in order to determine the type of environmental information required and the extent of its subsequent environmental review.

When Ex-Im Bank screens and categorizes applications, it will also consider any operational links or facilities associated with the project, based on the level of interdependency of the facility with the project, the timing of its construction and its location relative to the project. Where associated operations are in an environmentally sensitive area, and/or have the potential to cause significant environmental impact, Ex-Im Bank may categorize the application based on the nature of the project and the associated operations taken together. Ex-Im Bank will notify the applicant when it requires environmental information related to operations associated with the project.

Depending on the nature of the information provided in the screening document, Ex-Im Bank will categorize the transaction as either A, B, C or N[7].  The definitions of these categories and the level of information generally needed to review transactions within the categories are summarized below.

Category A: Large Greenfield Projects or Projects Located iin or Impacting a Sensitive Site

Included in this category are transactions that cover exports for:

1) Large, greenfield projects, or major extensions to large projects, as listed in Annex D, the “Illustrative List of Sensitive Sectors and Areas” from the Common Approaches.[8] . These include large greenfield projects in sectors such as hydroelectric, mining, forestry, commercial oil & gas development, pipelines, transmission lines, chemical plants, refineries, thermal power plants greater than 140 MWe, pulp & paper, and industrial processing plants that have the potential to cause significant adverse environmental effects.

2) Any project to be constructed in, or likely to have a perceptible impact on, environmentally sensitive locations (as described in Annex D) such as National Parks and other protected areas identified by national or international law; and other sensitive locations of international importance  (for example, Ramsar Convention sites, IUCN protected areas and UNESCO World Heritage Sites) or of national or regional importance, such as wetlands, forests with high biodiversity value, areas of archaeological or cultural significance, and areas of importance for indigenous peoples or other vulnerable groups.

For Category A applications, Ex-Im Bank will require submission of an EIA (as described in Annex E) and related documentation describing the environmental effects of the project as well as the environmental effects of any associated operations that Ex-Im Bank may identify as being within the scope of its environmental review.  Applicants are encouraged to submit the EIA at the time the application for financing is made, and it should be in English. The EIA and related information should be sufficient to identify the environmental impact of the project and measures needed to mitigate the adverse environmental effects[9], and to evaluate whether and to what degree, the project meets relevant host-country and applicable international environmental guidelines.

Category B:  Expansions, Upgrades and Projects having Limited Environmental Impact

Included in this Category are transactions related to projects having the potential for environmental impacts that are less adverse than Category A projects.  Typically, these impacts are site specific; few if any of them are irreversible, and mitigation measures are readily identifiable and available.  This category generally includes new thermal power plants with capacities less than 140 MWe, small to medium scale manufacturing and industrial facilities not impacting an environmentally sensitive location, nominal upgrades to existing projects that do not result in significant additional capacity, and existing projects that are not undergoing any material change in capacity or function, but which may have potentially adverse environmental impact.

If, during the review process of a Category B transaction, the project’s environmental information indicates that the transaction should instead be designated as Category A, Ex-Im Bank will promptly notify the exporter, buyer and/or project sponsors of the requirement for an EIA, and the transaction will be reclassified as Category A for purposes of its environmental review.

Ex-Im Bank does not require submission of an EIA for Category B projects. For applications involving projects that consist of new plants or facilities, Ex-Im Bank will require submission of environmental information sufficient to establish whether or not the project, as well as  any associated operations that Ex-Im Bank may identify as being within the scope of its environmental review, meets relevant host-country environmental guidelines and applicable international guidelines.

For Category B applications that relate to the expansion or upgrade of existing projects, Ex-Im Bank requires environmental information that focuses on the environmental effects associated with the actual expansion or upgrade portion, including adherence to host-country and applicable international guidelines.  If the existing facility is determined to have continuing serious adverse environmental effects, Ex-Im Bank may require appropriate mitigation in order to support the expansion or upgrade project.

For Category B applications that relate to existing projects not undergoing any material change in capacity or function, Ex-Im Bank requires submission of available environmental information relating to the environmental performance and projected future performance of the project, including its adherence to host-country environmental guidelines.  If the existing project is determined to have serious adverse environmental effects, Ex-Im Bank may require adoption of measures to mitigate the identified environmental effects.

Category C:  Categorical Exclusions

Applications greater than $10 Million will be classified as Category C if  they are not related to a physical project or if they relate to projects which do not require further environmental review because they are likely to have minimal or no adverse environmental impacts. This category includes transactions related to new, expansion or existing projects of the type that have little or no potential to cause environmental effects and do not impact sensitive locations.  In addition, medium-term applications, including those covered under Credit Guarantee Facilities, pertaining to projects that are not located in or near sensitive areas generally will be classified as Category C.

Category C transactions generally would include those covering the sale of aircraft, satellites, locomotives or railway signaling to existing railroads, equipment for existing telecommunication operations, radar and air traffic control systems not associated with new airports, electronic data processing equipment for existing facilities, hospital equipment not associated with new construction, and pre-project services such as environmental and feasibility studies.  No further environmental information is required for Category C applications.

Category N:  Nuclear

All transactions associated with nuclear power projects, nuclear research reactors and related facilities or the production or disposal of nuclear fuel are designated as Category N.  Due to the special health and safety issues associated with this sector, information requirements for Category N transactions are contained in a separate document titled Ex-Im Bank Nuclear Procedures and Guidelines.

III. SOURCES OF ENVIRONMENTAL INFORMATION

A.  The Applicant and Project Sponsors

It is in the applicant's or project sponsors’ interest to submit the required environmental information as soon as possible in order to avoid delays in case processing.  However, if complete environmental information is not available at a preliminary stage, such information must be submitted for evaluation by the E&E Division before Ex-Im Bank can act on a request for a Final Commitment.

In cases requiring an EIA, the applicant may obtain from the buyer or project sponsors a copy of the EIA in English that is already prepared for the project.  For this category of project, an EIA usually will have been prepared in anticipation of requirements of host-country authorities and/or international lending institutions.  During the course of the application’s review, Ex-Im Bank’s Environmental Analyst will advise the applicant and/or the project sponsors if additional or updated environmental information is required. 

B.  Other U.S. Government Agencies; Multilateral Development Banks

In cases considered appropriate by Ex-Im Bank, the E&E Division will consult with other U.S. Government agencies, U.S. embassies, and/or multilateral development banks to obtain information on the environmental effects of projects.

C.  Other Sources of Environmental Information

Ex-Im Bank will review and take into account relevant information related to the potential environmental effects of a project that is provided by stakeholders of the project, non-governmental organizations (NGOs) and interested parties.   To enable these sources to be informed about the environmental aspects of a Category A project, instructions on how to obtain the project EIA and other information authorized for release by the project sponsors will be posted on the Major Transactions Pending List of Ex-Im Bank’s Web site.  In order to protect confidential business information, neither the Major Transactions Pending List nor the EIAs will provide specific information about the identity of the exporter, contract value or the products for which Ex-Im Bank financing is sought, unless otherwise authorized for release by the buyer or project sponsor.  Ex-Im Bank is prohibited by the Trade Secrets Act, 18 U.S.C. 1905, from disclosing confidential business information unless such disclosure is authorized by law.

Interested parties may provide information or comments regarding potential environmental issues associated with such projects by responding in writing to the E&E Division at Ex-Im Bank.  Providing information does not give legal standing to any person or group to participate in the Ex-Im Bank decision-making process.  Ex-Im Bank will review and may take into account the environmental information provided.

If material received by Ex-Im Bank from sources other than the applicant gives rise to environmental concerns, Ex-Im Bank will give the applicant an opportunity to provide further information addressing these concerns during the period in which Ex-Im Bank undertakes its environmental review.

IV: ENVIRONMENTAL INFORMATION REQUIREMENTS PERTAINING TO EX-IM BANK PROGRAMS

A. General

The level of environmental information required of a transaction relates directly to the extent and complexity of the project’s potential environmental effects.  Ex-Im Bank will require information sufficient to identify the project’s potential environmental impact and enable it to determine whether, and to what extent, the project meets the relevant host-country and applicable international environmental guidelines.  Information related to the potential beneficial environmental effects of   a project, should also be provided when applicable.

For those transactions requiring submission of an EIA, Annex E describes the type of information about the environmental effects of a project that should be contained within an acceptable EIA.  In addition, a copy of the EIA, along with authorization by the buyer or project sponsors for its release to interested parties, is normally required unless the buyer or sponsor has already made an English version of the EIA available by posting it on a publicly accessible Web site. 

The scope and level of detail needed by Ex-Im Bank to meet the information requirements of the environmental guidelines for specific transactions may vary.  In determining the level of information required of the applicant, Ex-Im Bank may consider factors such as the availability and scope of information from other sources. Ex-Im Bank also may consider information related to a borrower or project sponsor’s past compliance with environmental standards or financing conditions when evaluating a project’s potential environmental impact and the measures proposed to mitigate that impact.

Ex-Im Bank’s E&E Division is comprised of Environmental Analysts and Engineers.  The Environmental Analysts specialize in the environmental aspects of projects and the applicability of environmental standards and guidelines.  The Engineers specialize in individual industrial sectors and are also familiar with many of the environmental aspects of projects that fall within their sectors. The Division’s Environmental Analyst, together with the engineer assigned to evaluate the technical aspects of a project, are available to provide guidance to applicants on matters related to Ex-Im Bank’s environmental information requirements.

B.  Long-Term Loans and Guarantees Based on Sovereign or Corporate Risk  

A Final Commitment Application may involve conversion of a Letter of Interest (LI), conversion of a Preliminary Commitment (PC), or it may be a stand alone application. 

Letters of Interest
Letters of Interest (LIs) are non-binding expressions of Ex-Im Bank’s willingness to consider participating in a transaction. Ex-Im Bank generally issues LIs within seven business days of the receipt of an application.  LI applications for long-term transactions must be accompanied by a completed Environmental Screening Document (Annex B) that will be used for initial categorization of the transaction and to inform the applicant as to the scope of environmental information required for a subsequent Final Application.  This initial categorization is preliminary and subject to revision once the characteristics of the project are more fully defined at a subsequent application phase.
 
Except in rare instances involving projects that are known to have potentially severe adverse environmental effects, LIs will be issued with no prior environmental review.  For LI applications initially screened as Category C, no mention of environmental requirements will be included in the LI.  For those LI applications relating to a physical project (Category A, B or N), Ex-Im Bank will provide information with the LI alerting the applicant as to the need for an EIA, if applicable, (as described in Annex E) or the nature of information needed by the E&E Division to evaluate the project. This allows the applicant a maximum amount of time to gather the required environmental information in order to avoid processing delays at the subsequent Final Application stage.

No LIs will be issued for nuclear cases without prior review by the E&E Division.  Nuclear transactions are subject to the provisions of Ex-Im Bank’s Nuclear Procedures & Guidelines.

Preliminary Commitments 
Preliminary Commitments (PCs) are issued after Ex-Im Bank's staff and Board of Directors analyze information available relative to the financial soundness, technical feasibility, and environmental effects of a proposed transaction.  Applications for a PC must include a completed Environmental Screening Document (Annex B).  Based on the information provided in the screening form, the E&E Division will inform the applicant promptly of the category of the transaction and the scope of additional environmental information required to process the PC.

Ex-Im Bank understands that in certain cases, not all the information needed to evaluate the project against host-country or applicable international environmental guidelines, is accessible to applicants at the PC stage.  In these cases, based on recommendations of the E&E Division, Ex-Im Bank will condition its issuance of a PC on a subsequent review and satisfactory evaluation of such information at the Final Commitment stage.

In those cases where a PC is requested for a series of long-term transactions pertaining to physical projects for a single borrower or end-user (“Long-Term Facility”), Ex-Im Bank will condition its PC on a subsequent review and evaluation at the Final Commitment stage for each resulting transaction identified within the PC.

If environmental concerns are sufficiently serious and adequate information is available for evaluation, Ex-Im Bank may decline to issue a PC on environmental grounds.  If a PC is issued, the PC Approval Letter will identify information that will be required in the Final Commitment application.  PC letters may identify environmental issues that should be addressed (for example, by proposed mitigation measures) at the Final Commitment stage.
 
Final Commitments
Final Commitments (or Final Applications) for long-term transactions are approved by Ex-Im Bank, only after all financial, technical, and environmental analyses have been completed.  If no PC has been issued, the applicant for a Final Commitment must submit a completed Environmental Screening Document (Annex B).  All long-term final applications, except those designated as Category C, will undergo a complete environmental evaluation in accordance with the review procedures and information requirements noted above.  In order that interested parties have sufficient time to review and provide information and comments to the E&E Division about the environmental effects of Final Commitments designated as Category A, the transaction’s EIA should be made available to interested parties for at least 30 calendar days prior to Ex-Im Bank’s issuance of a Final Commitment.

No Final Commitment will be authorized unless Ex-Im Bank, in its sole judgment, has received sufficient environmental information to enable the E&E Division to assess the environmental effects of the project.  The environmental information provided will be evaluated against the relevant host-country guidelines and the applicable international guidelines.

C.  Long-Term, Limited Recourse Project Financing Program

Applications for Letters of Interest for limited recourse project financing must be accompanied by an Environmental Screening Document (Annex B) that will be used for initial categorization of the transaction and to inform the applicant as to the scope of environmental information required for a subsequent Final Application. This initial categorization is preliminary and subject to revision once the characteristics of the project are more fully defined at a subsequent application phase.

The E&E Division will be involved in the early stages of processing a limited recourse project financing application. As part of determining whether Ex-Im Bank will issue a Preliminary Project Letter (PPL), the E&E staff will consider whether the project will raise any potentially serious environmental problems that could lead Ex-Im Bank to withhold financial support for the project. If such problems are identified, Ex-Im Bank shall notify the sponsor and may provide guidance with respect to mitigation measures that could be adopted in order to address these environmental problems.

When an EIA is required (Category A), the applicant or sponsor of the project finance transaction should submit an EIA to Ex-Im Bank as soon as possible, but in no event later than the time of application for a Final Commitment.  The EIA also should be made available to interested parties for at least 30 calendar days prior to Ex-Im Bank’s issuance of a Final Commitment. An Environmental Analyst from the E&E Division will review the EIA, request further information as necessary from the sponsors or exporters, analyze all relevant information, and prepare an environmental evaluation of the project.  The evaluation may include recommendations to the Board of Directors with respect to conditions that must be met to obtain financial support.

As is the case with the financial and technical reporting requirements associated with the evaluation of limited recourse project finance transactions, Ex-Im Bank reserves the right to require the sponsor to bear the expense of outside environmental specialists to prepare an independent report with respect to the project’s environmental effects.

D.  Medium-Term Loans, Guarantees and Insurance

Medium-term financial support provided by Ex-Im Bank through its loan, guarantee, and insurance programs generally covers the export of capital goods and services that are not purchased in conjunction with a particular physical project.  Applications for Medium-Term transactions will not require submission of an Environmental Screening Document (Annex B).

Ex-Im Bank will internally screen medium-term applications for Final Commitments based on the information contained in the application.  For those medium-term transactions where the environmental screening reveals that the underlying project presents the potential for significant adverse environmental effects because it is to be carried out in a sensitive area or likely to have an adverse impact on such an area, the applicant will be informed and required to submit environmental information sufficient for Ex-Im Bank to undertake an environmental review of the project against relevant host-country and applicable international environmental guidelines. Applications for most medium-term transactions will not be subject to an environmental review.  

Medium Term Delegated Authority
Under Ex-Im bank’s Medium Term Delegated Authority (MTDA) Program, Ex-Im Bank permits eligible lenders to underwrite and authorize medium-term guarantee and insurance transactions for which the lender utilizes pre-determined credit standards.  The Program provides appropriate controls with respect to Ex-Im Bank’s environmental policy.  (Applications ineligible for processing under the MTDA Program due to environmental sensitivity will be reviewed and processed directly by Ex-Im Bank under its medium term guarantee and insurance programs.)

E.  Credit Guarantee Facilities (CGFs)

The CGF program is designed to reduce up-front administrative time and cost and thereby better serve small and medium-sized exporters.  CGFs only address medium-term transactions.  Most CGFs provide guarantees of medium-term lines of credit between U.S. and foreign financial institutions that are used to finance U.S. exports consisting of a wide range of capital goods to a variety of end-users, or certain recurring capital goods to a specific foreign buyer.  In most cases, Ex-Im Bank is not informed of the specific exports supported by a CGF until after financing for the transaction has been authorized.  CGFs of this type will not be subject to an environmental review.

Some CGFs may consist of Ex-Im Bank guarantees of medium-term lines of credit in which the borrower is also the end-user of the export (typically an industrial company rather than a bank), and consequently information on the nature of the export and its end-use may be available prior to Bank action.  Applications for these CGFs will be screened for their potential environmental effects.  In the unusual case where the screening of a medium-term transaction covered under a CGF reveals that the underlying project presents the potential for significant adverse environmental effects because it is to be carried out in a sensitive area or likely to have an adverse impact on such an area, the applicant will be informed and required to submit environmental information about the project, sufficient for Ex-Im Bank to undertake an environmental review of the project against relevant host-country and applicable international environmental guidelines.

Chemicals, pesticides and other such commodities are not eligible for medium-term financing under CGFs.  Nuclear related exports also are not eligible for support under Ex-Im Bank’s CGF program.

F. Short-Term Insurance

The scope of the Common Approaches does not include transactions having repayment terms less than two years.  Short-term financial support for exports provided by Ex-Im Bank export credit insurance generally covers commodities, consumer goods, and other non-capital goods and services. These products typically have limited, if any, environmental consequences.  Ex-Im Bank Insurance support for these transactions is provided against risks of non-repayment and generally provides coverage for a term of up to one year. With the exception of nuclear-related exports, no environmental screening or review will be conducted of short-term transactions. (Applicants should refer to Ex-Im Bank’s Nuclear Procedures and Guidelines for all nuclear related exports.)

Ex-Im Bank will not provide insurance for chemicals or pesticides that are banned or severely restricted in the U.S.  A list of items ineligible for export credit insurance is contained in Annex C.

G. Working Capital Guarantee Program (WCGP)

Ex-Im Bank provides short-term working capital support directly to U.S. exporters for activities related to the production or supply of items within the United States for subsequent export.  With the exception of nuclear-related exports, no environmental review will be conducted of WCGP transactions. (Applicants should refer to Ex-Im Bank’s Nuclear Procedures and Guidelines for nuclear-related WCGP transactions.)

V. PROJECT MONITORING

To ensure that projects supported by Ex-Im Bank are constructed and operated in accordance with the relevant host-country and applicable international environmental guidelines, Ex-Im Bank will monitor the environmental performance of Ex-Im Bank supported Category A projects through the term of the Ex-Im Bank financial support, particularly those aspects of projects subject to any Ex-Im Bank financing conditions pertaining to the implementation of measures to mitigate a project’s environmental impact.  Monitoring will be conducted through the review of information provided by the sponsor and through site visits. In the case of large projects undertaken as limited recourse project finance transactions, Ex-Im Bank may require that the project sponsor bear the expense associated with retaining an independent outside environmental consultant to conduct site visits on behalf of Ex-Im Bank and to obtain the information required to monitor the project’s environmental performance and level of compliance with the provisions of any environmental conditions related to Ex-Im Bank's financial support for the project.

Ex-Im Bank will make available supplemental environmental reports (including remediation or mitigation plans and procedures, and related monitoring reports) that Ex-Im Bank requires to be submitted to the Bank by the borrower as a condition of the financing. Instructions on how to obtain the EIA or other available reports will be posted on Ex-Im Bank’s "Major Transactions Pending List” page. Ex-Im Bank will endeavor to inform the borrower if such reports are made available to interested parties. Ex-Im Bank will not disclose business confidential information protected under 18 U.S.C. 1905 or deliberative material generated by the Bank or its consultants. 

Ex-Im Bank’s Environmental Analysts are responsible for undertaking the environmental evaluation of proposed transactions and will conduct, as required, monitoring of the environmental aspects of projects following authorization for financial support. The Environmental Analysts serve as Ex-Im Bank’s primary experts on environmental matters, including the environmental performance of Ex-Im Bank supported projects. 
 

Update: August 25, 2008