- Bank cannot approve large loans without a quorum of directors
- America’s nuclear exporters stymied without financing support
- American exports and jobs suffer in face of international competition
This June 30 will mark three years without a leadership quorum at the Export-Import Bank of the United States (Ex-Im Bank), the nation’s official export credit agency that provides funding for domestic companies to compete in the global marketplace. Without a quorum on its board, the bank is unable to approve funding for projects larger than $10 million, putting U.S. nuclear suppliers and exporters at a distinct disadvantage.
“$10 million does not go very far in the nuclear energy industry. And because virtually all nuclear energy tenders require export credit agency support, U.S. nuclear exporters are in a serious bind,” NEI Vice President of Suppliers, New Reactors and International Programs Dan Lipman says.
“When these financing options are unavailable, American nuclear companies lose out on deals—and without those deals, American jobs disappear.”
Ex-Im Bank provides trade financing to customers of U.S. companies when the private banking sector is unable or unwilling to do so. With an active default rate of just 0.266 percent, the bank operates at no cost to American taxpayers, and in fact since 2009 its operations have contributed $3.8 billion to taxpayers.
In recent years, the bank has supported 1.4 million private-sector American jobs. Most of the bank’s recipients are not corporate giants, but domestic small businesses: in 2016, more than 90 percent of Ex-Im Bank’s over 2,600 transactions directly supported American small businesses.
“Ultimately, this is not about financing or deals—it’s about American jobs,” NEI Director of Supplier Programs Ted Jones said. “When export credit agency financing is unavailable in the United States, U.S. multinationals are forced to shift procurement away from the U.S. supply chain in order to remain competitive. Other countries are happy to finance these exports—and take our jobs.”
Other countries’ export credit agencies are not idly standing by. Every major foreign competitor is backed by an official export credit agency or has other state financing options. China goes into markets abroad with financing options from three export credit agencies, while Russia uses resources from both the Russian state budget and the Russia Wealth Fund. The volume of these projects typically far exceed the $10 million threshold: investment in Turkey’s first nuclear power plant, which is being built by Russia’s Rosatom at Akkuyu on the Mediterranean coast, will reportedly exceed $20 billion.
“Three years without the capability to approve large deals is having a major impact on the ability of American’s nuclear exporters to compete. China, Russia, South Korea and others are aggressively using their own export credit agencies to attract and win new nuclear business,” Lipman said.
Ex-Im Bank has functioned without a confirmed chairman since President Trump took office and has been without a quorum (at least three members of its five-member board) since late 2015.
On June 20, the White House nominated Kimberly Reed, a former Treasury official, to lead the bank. Earlier this year, Trump appointed Jeffrey Gerrish as acting Ex-Im Bank chairman and president, which did not require Congressional approval.
Currently there are no other members actively serving on the bank’s Board of Directors. Last December, the U.S. Senate Banking Committee approved 4 of 5 nominees to the bank’s board. However, the full Senate must vote to confirm those nominees and the chairman to their positions so the bank can restore its full functionality and once again begin to approve large deals.
“We urge the Trump administration to continue to work with Congress to confirm these Ex-Im Bank nominees and give American companies the tools they need to compete on a level playing field.”
NEI’s website has more details on the importance of Ex-Im Bank for the nuclear industry.