SACE is out of Arctic LNG-2 but not out of fossil fuels

Rome, 23 January 2024 – On 31st of January 2024, the guarantee on loans that SACE had issued in 2021 in favour of Intesa Sanpaolo and Cassa Depositi e Prestiti (CDP) for Arctic LNG-2 will be terminated. Arctic LNG-2 is natural gas liquefaction mega-project of the Russian company Novatek under construction in the Gydan Peninsula, one of the most at-risk territories in the Russian Arctic.

After more than three years of campaigning and advocacy by ReCommon and its Italian and international partners, the organization welcomes the news. Italian taxpayers’ money, placed as a guarantee for the project, will play no part in an environmentally and climatically devastating project.

But in this whole affair there is a factor that casts heavy shadows on SACE itself and its conduct, and it is related to the ongoing war in Ukraine. In an exchange with ReCommon, the export credit agency put it on record that it is only abandoning Arctic LNG-2 because of “the potential risk of secondary US sanctions”. The deadline the 31st of January 2024 is in line with the “time window specified by OFAC”.

OFAC is the Office of Foreign Assets Control of the US Treasury Department. On November 2, OFAC placed the LLC Arctic LNG-2 (of which Novatek is the majority shareholder) “on the list of Specially Designated Nationals and Blocked Persons, with the result that any interested party may terminate all ongoing relationships by 31 January 2024 in order to avoid possible secondary sanctions”.

A war and a substantial extra-EU sanctions package were needed to force SACE out of Arctic LNG-2. «The time has come for SACE to implement the Glasgow Statement on stopping public financing of fossil fuels by adopting a policy worthy of the name. The environment, the climate and the money of Italian citizens are at stake», said Simone Ogno of ReCommon.

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