The landscape of public export finance has undergone significant transformation over the past decade. While renewable energy commitments have surged, fossil fuel support remains substantial, with notable variations across countries and technologies. This study delves into the financing patterns of export credit agencies (ECAs) from 31 OECD and non-OECD nations between 2013 and 2023, revealing critical trends and implications for global climate goals. The research underscores the pivotal role of ECAs in shaping the energy transition and highlights the need for policy adjustments to align with international climate commitments.

Evolving Financing Patterns: A Decade in Review

Between 2013 and 2023, ECAs demonstrated a marked shift towards renewable energy projects, particularly wind and solar power. Initially, fossil fuels dominated ECA commitments, but the share of renewables increased significantly, especially after key policy milestones such as the Paris Agreement and the Glasgow Statement. By 2023, renewable energy commitments surpassed those for fossil fuels for the first time, signaling a turning point in public export finance. This trend was driven by European ECAs, particularly members of the E3F climate club, who prioritized greener investments.

However, the transition has not been uniform. Non-E3F countries, including major players like China, continued to support fossil fuel projects, reflecting divergent national priorities. The pandemic also influenced these trends, leading to a temporary decline in fossil fuel financing while renewable energy commitments remained stable. This resilience underscores the growing importance of renewables in the global energy mix. Additionally, the deal sizes for renewable projects were generally smaller compared to fossil fuel ventures, indicating a shift towards more diversified and less capital-intensive investments.

Geographic and Policy Implications of Portfolio 'Greening'

The shift towards renewable energy has had profound geographic implications. High-income countries, especially within Europe, have become the primary beneficiaries of ECA support for renewables. In contrast, lower-income nations, which often require more concessional financing, have seen a relative decrease in ECA-backed projects. This disparity raises concerns about equitable access to clean energy finance, particularly for emerging economies that are crucial for achieving global climate targets.

Policymakers must address this imbalance by expanding ECA mandates to explicitly support the energy transition in lower-income countries. Furthermore, the ongoing negotiations at the OECD highlight the need for coordinated international efforts to restrict fossil fuel financing and promote sustainable development. The E3F coalition's leadership in this area offers valuable lessons on how policy alignment can drive positive changes in export finance practices. However, challenges remain, especially in balancing economic interests with environmental goals, particularly for countries dependent on fossil fuel exports.