LNG Projects May Get Funding Boost From U.S. Export Bank Plan

A new plan by the U.S. Export-Import Bank could yield a flood of financing for U.S. energy ventures, including wind and solar projects, battery manufacturing, and terminals to sell LNG overseas.

While the credit agency has long provided financing and insurance to boost sales of U.S. products, the bank’s board is set to vote Thursday on a formal policy shift encouraged by the Biden administration that would extend support to manufacturing and infrastructure projects that facilitate exports.

The agency plans to prioritize financing for green projects, from renewable power ventures to clean energy manufacturing. Still, environmentalists and natural gas advocates say the initiative could also bolster a host of LNG export terminals proposed along the U.S. Gulf Coast, especially given the Biden administration’s efforts to supplant Russian energy in Europe with U.S. supplies.

Potential Ex-Im financing for LNG projects “could translate into billions of dollars” in support “and a catastrophic amount of U.S.-financed greenhouse gas emissions,” Friends of the Earth told the agency.

An Ex-Im Bank spokesman said any application the agency receives under the new initiative would be subject to existing environmental and social impact reviews. Legally, the agency is barred from discriminating against applications based on sector, including liquefied natural gas, the spokesman said. 

The bank’s board of directors is expected to approve the change, after previously seeking public comments on whether to extend loans and guarantees to projects with some export connection. Key issues include what kind of domestic projects should be eligible and whether they should face additional requirements, such as the use of U.S.-flagged ships. 

The White House recommended the shift in a report last year, asserting that the change would “facilitate U.S. exports while rebuilding U.S. manufacturing capacity.”

The plan could help roughly a dozen LNG projects proposed along the Gulf Coast secure critical financing despite having no bankable credit rating, argue the LNG allies. Projects by Kinder Morgan Inc. and Tellurian Inc. are already fully permitted but still await final investment decisions.

Manufacturers and exporters also support the proposal, with its potential to benefit producers of semiconductors and biomedical products. The National Association of Manufacturers said it could provide “critical capital” enabling small- and medium-sized companies to expand facilities and upgrade machinery. 

Wind turbine maker Siemens Gamesa Renewable Energy S.A. said the plan could help lure foreign suppliers to invest in U.S. manufacturing. And Citigroup Inc. told the bank it could help combat supply chain bottlenecks.