Minister's remarks to the 28th Asian Exim Banks Forum

Senator the Hon Don Farrell
Minister for Trade and Tourism Special Minister of State

Speech

21 November 2023

Good morning, thank you John for the generous introduction.

I acknowledge the traditional custodians of the lands on which we meet.

I pay my respects to their elders past and present.

I also acknowledge other Aboriginal and Torres Strait Islander people here today.

I acknowledge the Chair of Export Finance Australia, Mr James Millar AM

And the 14 heads of delegation from the Asian Exim Banks Forum members and observers, who have travelled from overseas to be here.

Welcome to Sydney for the 28th Asian Exim Banks Forum annual meeting.

As Minster for Trade, I am so proud of the work of Export Finance Australia and would like to thank them for hosting this event.

It is a pleasure to be here with you for what will be an exciting conversation.

At last year’s meeting, members acknowledged that Exim banks and export credit agencies can and should, take a proactive role in tackling global challenges.

Today, we will see that conversation continue during discussions about the clean energy revolution, critical minerals, data and artificial intelligence.

Topics that present complex challenges.

And of course, Exim banks exist to solve complex challenges.

They were born, largely, out of economic downturns, depressions, and recessions.

And they have evolved into important economic institutions that help fill the gap in export financing where the private sector cannot, to help address contemporary strategic challenges.

Export Finance Australia is Australia’s export credit and overseas infrastructure financing agency.

EFA plays a crucial role in supporting our strategic trade objectives, such as diversifying regional supply chains, leveraging greater investment in the Indo-pacific while supporting our transition to net zero.

But it also plays an important role in supporting Australian jobs.

Because when our exporters do well, so do our workers, and our communities.

Here in Australia, trade supports one in four jobs.

And Australian exporters pay around 5% higher wages on average.

There is also a proven link between exports, innovation and productivity.

And we know that the biggest barrier to innovation is lack of access to additional funding.

This is particularly important for the clean energy projects that need support today.

Projects that will boost the energy security and resilience of our region.

There is no time to waste in the transition to net-zero.

If we are to achieve net-zero, export finance can help fill the gap in investment that will fund our journey to decarbonisation.

Our Government has taken a more proactive approach in using export finance to meet these strategic challenges.

For example – we recently expanded Australia’s $4 billion Critical Minerals Facility.

These minerals will drive clean energy technologies, and create further downstream value-adding opportunities for Australian industry.

This facility will also help increase supply of critical minerals to our trading partners through new and diversified supply chains.

Our Government has been focused on enhancing existing trade arrangements and diversifying Australia’s trade and investment relationships.

Since coming to government we have entered into specific green energy partnerships with Singapore, Japan and have entered into new free trade agreements with India and the UK.

And just last week – I was delighted to be in San Francisco for APEC, where we were able to sign a supply chain agreement with members of the Indo-Pacific Economic Framework.

I was also pleased that we were able substantially conclude negotiations on clean economy and anti-corruption pillars of this agreement.

These agreements help make Australia a more credible, trustworthy trade and investment partner in key sectors, including renewable energy.

Australia has the resources to become a renewable energy superpower that can support our region’s decarbonisation.

And we acknowledge that our future is intertwined with the future of our region.

But there is more we can be doing to increase two-way trade and investment with our region.

To attract capital and build new export markets.

That is why EFA has powers to finance overseas infrastructure in the Indo-Pacific.

It acts as a lender of record for the operations of the Australian Infrastructure Financing Facility for the Pacific.

We are also prioritising growing two-way trade and investment between Australia and Southeast Asia.

Southeast Asia is projected to become the world's fourth-largest economy by 2040, after the United States, China and India.

It has an expected compound annual growth rate of 4% between 2022 and 2040.

But for the last 10 years, Australia has gone backwords in its share of foreign investment in Southeast Asia.

In 2022, our foreign investment stocks in Southeast Asian countries were worth around $120 billion, representing a meagre 3.4% of Australia's total investment stocks abroad.

This lack of investment is particularly astonishing given the proximity and the complementarities of our economies.

So our government has taken immediate action to help Australian investors get back into the region.

We are establishing investment deal teams as a priority initiative of our Southeast Asian Economic Strategy to 2040.

These deal teams will be delivered jointly by Export Finance Australia, with the Australian Department of Foreign Affairs and Austrade.

They will explore and accelerate investment opportunities in clean energy, infrastructure, and other important capital projects involving Australian companies in the region.

Projects like the Lotus Wind Power Project in Vietnam.

In 2021, Export Finance Australia joined with the Asian Development Bank, the Japan International Cooperation Agency, and others to provide $US32 million to the Lotus Wind Power Project in Vietnam.

Built by a joint venture between a local Vietnamese firm and Japan’s RENOVA Inc - the Lotus Wind Power Project is now generating over 400 gigawatt-hours of electricity.

This project is expected to increase Vietnam’s wind power capacity by 30%, preventing around over 160,000 tonnes of carbon dioxide emissions each year.

And the project has a robust gender action plan, training women from the local community to work in operations and management roles at the power plant.

This was Export Finance Australia’s first major investment in an overseas renewable energy initiative.

Then, in 2022 EFA, in collaboration with the Australian Climate Finance Partnership, the Asian Development Bank, and a group of sustainability-focused development finance institutions provided $US30 million to VinFast – Vietnam’s first domestic electric vehicle manufacturer.

VinFast will make and roll-out electric-buses and Vietnam’s first EV charging network.

I was fortunate to have the opportunity to ride one of these buses when I was in Vietnam earlier in the year and know first-hand how exciting this project is.

A project which will contribute to Vietnam’s goal to reach net-zero emissions by 2050.

In September this year, EFA also signed an MOU with Indonesian state-owned electricity company PLN – to work on a $US200 million financing facility to support Indonesia’s transition to clean energy.

These types of projects shows our capability to cooperate with international partners, especially those in the Southeast Asia region, on climate and energy initiatives.

Export financing is becoming an increasingly important tool in achieving Australia’s strategic objectives in our region.

And I expect it will continue to be an important tool in the years ahead.

All of our export activities work within the international rules-based trading system.

And we want to work closely with other regional financiers, including the Exim Banks represented here today, to crowd-in further investment in projects in our region.

To bolster our region’s economic success and resilience.

Private enterprise is leading the innovation and collaboration needed to address many of the global challenges we currently face.

And they need your help to turn our shared vision into reality.

I wish you all every success for a productive and enjoyable forum and look forward to hearing about the outcomes of this important meeting.

Thank you.

To learn more, visit: https://www.trademinister.gov.au/minister/don-farrell/speech/lifting-investment-address-contemporary-strategic-challenges