Public financial institutions in the energy transition: the impact of export credit agencies

• Published in: Climatic change Vol. 178; no. 3; p. 40
• Main Authors: Downie, Christian, Peterson, Maxfield J.
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01.03.2025; Springer Nature B.V
• Subjects: Alternative energy; Atmospheric Sciences; Banking; Bureaucracy; capital; Capital markets; Clean energy; Clean technology; climate change; Climate Change/Climate Change Impacts; credit; data collection; Earth and Environmental Science; Earth Sciences; Energy; Energy industry; Energy policy; Energy transition; Exports; Finance; Financial institutions; Fossil fuels; Green energy; Institutions; International finance; Investments; issues and policy; markets; Panel data; Paris Agreement; Policy making; politics; Public finance; Renewable energy; renewable energy sources; Renewable resources; United Nations Framework Convention on Climate Change; United Kingdom; Energy; United States; Export credit agencies; Finance
• ISSN: 0165-0009; 1573-1480
• DOI: 10.1007/s10584-025-03881-z

Achieving a clean energy transition requires global financial flows to be redirected away from fossil fuels and into renewable energy. While capital market actors and multilateral financial institutions have been the subject of significant scholarly attention, public bilateral financial institutions, especially Export Credit Agencies (ECAs), have been largely overlooked. This is an important oversight given ECAs are the source of billions of dollars of public finance for fossil fuels, which has helped to lock-in recipient countries to fossil fuel energy systems. Using a panel dataset of ECA transactions in the energy sector, we show that despite some improvements in financial flows after the Paris Agreement in 2015, fossil fuel investments remain pervasive and growth in clean energy investments is minimal. To better understand changes in ECA portfolios, we examine the cases of the Export-Import Bank of the United States (ExIm) and UK Export Finance (UKEF). Drawing on elite interviews, we identify three factors that are shaping ExIm’s and UKEF’s capacity to promote renewable energy exports: the extent of political control over the bureaucracy, the size and composition of green industrial bases, and the policy tools available to both ECAs to support the renewables sector. This has important implications for policymakers seeking to green ECA portfolios.