Russia applies for registration of COVID-19 vaccine in Europe
Wed, January 20, 2021
Jan 20 (Reuters) - Russia's sovereign wealth fund has filed for registration of Sputnik V in the European Union and expects it to be reviewed in February, the official account promoting the COVID-19 vaccine tweeted on Wednesday.
The Sputnik V and European Medical Agency (EMA) teams held a scientific review of the vaccine on Tuesday, the Sputnik V account said, adding the EMA will take a decision on the authorization of the vaccine based on the reviews. (https://bit.ly/39OQZDR)
The vaccine has already been approved in Argentina, Belarus, Serbia and other countries.
(Reporting by Amruta Khandekar; Editing by Shinjini Ganguli)
Wednesday, January 20, 2021
WALL ST.VS MAIN ST.
Goldman bankers collect best
pay packets for a decade
Lucy BurtonLucy Burton
Goldman Sachs has increased pay for its bankers to the highest level in a decade following a year in which much of Wall Street emerged unscathed from the pandemic.
The investment bank spent $13.3bn (£9.8bn) on pay and bonuses in 2020 despite Covid triggering a recession, up 8pc from the previous year but still $2bn less than the 2010 total.
The bumper payouts came despite some of its best-paid bankers having their pay slashed after Goldman was fined by regulators for violations in connection to Malaysia's 1MDB fund.
While Covid has left many households significantly poorer, Wall Street’s results season has highlighted just how well investment banks fared last year after market volatility triggered a trading boom and clients raised debt and equity.
Goldman rival JP Morgan posted record results last week.
The pay boost at Goldman suggests that traders and investment bankers received large payouts for driving up profits.
It unveiled a profit of $4.5bn for the fourth quarter, double that for the same period a year ago, while the $9.5bn annual profit exceeded expectations.
Chief executive David Solomon said: “Our people responded admirably to a series of professional and personal challenges, while working from home or in offices that were reshaped dramatically.”
The bumper results follow a year in which Goldman reached a $2.9bn settlement with global authorities to end a probe into its role in the 1MDB scandal.
Billions of dollars of public money was looted to buy luxury items and was even funnelled into the Hollywood film The Wolf of Wall Street.
Goldman admitted that its Malaysian subsidiary bribed officials with more than $1bn so it could win a lucrative contract to help 1MDB issue more than $6bn in bonds.
It agreed to pay $3.9bn to Malaysian authorities in July and Malaysia dropped criminal charges against the bank and some of its top executives last year.
After hitting a record high of almost $308 last week, Goldman shares dipped just under $300 in New York leaving it worth about $103bn.
Commentary: Fox News helped create the Big Lie. Now, as ratings slide, it can't escape it
Lorraine Ali
Tue, January 19, 2021,
Lorraine Ali
Tue, January 19, 2021,
Images of Fox News personalities Bret Baier, left, Martha MacCallum, Tucker Carlson, Laura Ingraham and Sean Hannity on the front of the News Corp. offices in New York City. (Drew Angerer/Getty Images)
America's most militarized Inauguration Day in modern history is ours to witness Wednesday when Joe Biden is sworn in as the nation's 46th president surrounded by 25,000 National Guard troops, armored vehicles and razor wire. The National Mall, which was packed for Barack Obama's ceremony and less so for Donald Trump's, will be closed to the public. Things are so precarious since Jan. 6's deadly breach of the U.S. Capitol by pro-Trump extremists that American Airlines is suspending alcohol service on all flights to and from Washington, D.C., until Jan. 21.
If only Sean Hannity could be taken off the menu like a single-serving bottle of vodka.
It's doubtful Trump could have radicalized as many Americans as he has without the help of media juggernaut Fox News. Hannity, along with colleagues Tucker Carlson, Laura Ingraham, Lou Dobbs and the rest of the crew, have been instrumental in mainstreaming Trump's far-right positions on everything from immigration to policing, parroting his lies and threats, and giving credence to his absurd conspiracy theories — including the debunked claims of election fraud that led to the Capitol insurrection. And if there's any question as to how the conservative news network became a legitimizer of Trump's propaganda and deep-state fantasies, Fox News’ devolution has been televised.
The crown jewel of Rupert Murdoch’s media empire, at least in the U.S., has propagated any number of the Trump administration's most consequential and damaging falsehoods, many in the service of exonerating or supporting the president himself in a time of scandal or crisis. (Which, as we've all experienced firsthand, was essentially his entire term.) Staffer Seth Rich involved in DNC email leak! Immigrant caravans at the border riddled with MS-13 gang members! Hunter Biden’s laptop! COVID-19 is a hoax! Stop the steal!
But years of unquestioning support for the president, including sowing mistrust about anything that challenges the White House's narrative, is beginning to have consequences. Fox News’ unholy alliance with Trump brought with it white supremacists, hateful militias and conspiracy theorists who believe the outgoing president is the only person standing between humanity and a nefarious ring of Satan-worshipping, cannibalistic pedophiles. The news organization's ratings have been in decline since election day, a slide many attribute to competition from media sources even further to the right; on Tuesday, it laid off political director Chris Stirewalt and others.
Now, as Trump leaves office, the cable news network that fueled his rise to power faces an ugly dilemma of its own making: continue to feed the monster it helped create or be destroyed by the monster's wrath.
Fox News is hardly the only media organization advancing the lies of Trumpism. Newsmax, "The Rush Limbaugh Show," One America News, Breitbart and Parler are all, to varying degrees, fonts of disinformation and active cheerleaders of the president. Social media behemoths that largely refused to clamp down on viral conspiracy theories and hate speech during the Trump era, including Facebook, Twitter and YouTube, are also complicit.
But since before the 2016 Republican primary, Fox News has arguably been the most high-profile pro-Trump provocateur, next to the president himself.
America's most militarized Inauguration Day in modern history is ours to witness Wednesday when Joe Biden is sworn in as the nation's 46th president surrounded by 25,000 National Guard troops, armored vehicles and razor wire. The National Mall, which was packed for Barack Obama's ceremony and less so for Donald Trump's, will be closed to the public. Things are so precarious since Jan. 6's deadly breach of the U.S. Capitol by pro-Trump extremists that American Airlines is suspending alcohol service on all flights to and from Washington, D.C., until Jan. 21.
If only Sean Hannity could be taken off the menu like a single-serving bottle of vodka.
It's doubtful Trump could have radicalized as many Americans as he has without the help of media juggernaut Fox News. Hannity, along with colleagues Tucker Carlson, Laura Ingraham, Lou Dobbs and the rest of the crew, have been instrumental in mainstreaming Trump's far-right positions on everything from immigration to policing, parroting his lies and threats, and giving credence to his absurd conspiracy theories — including the debunked claims of election fraud that led to the Capitol insurrection. And if there's any question as to how the conservative news network became a legitimizer of Trump's propaganda and deep-state fantasies, Fox News’ devolution has been televised.
The crown jewel of Rupert Murdoch’s media empire, at least in the U.S., has propagated any number of the Trump administration's most consequential and damaging falsehoods, many in the service of exonerating or supporting the president himself in a time of scandal or crisis. (Which, as we've all experienced firsthand, was essentially his entire term.) Staffer Seth Rich involved in DNC email leak! Immigrant caravans at the border riddled with MS-13 gang members! Hunter Biden’s laptop! COVID-19 is a hoax! Stop the steal!
But years of unquestioning support for the president, including sowing mistrust about anything that challenges the White House's narrative, is beginning to have consequences. Fox News’ unholy alliance with Trump brought with it white supremacists, hateful militias and conspiracy theorists who believe the outgoing president is the only person standing between humanity and a nefarious ring of Satan-worshipping, cannibalistic pedophiles. The news organization's ratings have been in decline since election day, a slide many attribute to competition from media sources even further to the right; on Tuesday, it laid off political director Chris Stirewalt and others.
Now, as Trump leaves office, the cable news network that fueled his rise to power faces an ugly dilemma of its own making: continue to feed the monster it helped create or be destroyed by the monster's wrath.
Fox News is hardly the only media organization advancing the lies of Trumpism. Newsmax, "The Rush Limbaugh Show," One America News, Breitbart and Parler are all, to varying degrees, fonts of disinformation and active cheerleaders of the president. Social media behemoths that largely refused to clamp down on viral conspiracy theories and hate speech during the Trump era, including Facebook, Twitter and YouTube, are also complicit.
But since before the 2016 Republican primary, Fox News has arguably been the most high-profile pro-Trump provocateur, next to the president himself.
Sean Hannity on Fox News on Aug. 14, 2017, discussing events surrounding that summer's "Unite the Right" rally in Charlottesville, Va. (Fox News / YouTube.com)
Fox News did not move from "fair and balanced" to de facto arm of the White House communications department overnight. As Showtime's 2019 docudrama "The Loudest Voice" reminds us, longtime Chief Executive Roger Ailes initiated the conservative network's hard-right turn toward fear and outrage in the aftermath of 9/11. By 2009, its primetime hosts, including Hannity, were championing and amplifying the "gotcha" videos of conservative operative James O’Keefe, eager for undercover "exposés" of liberal hypocrisy. Fox News covered O'Keefe's undercover "sting" impugning the community organizing group ACORN often and with plenty of verve, yet little scrutiny despite the iffy provenance of the video footage. Its high-powered spotlight contributed to the dissolution of the nonprofit organization in the U.S., though O'Keefe's work was later debunked as having been misleadingly obtained and edited.
The racist birtherism conspiracy about Obama, touted by then-reality show star Trump and echoed by Fox News, was the next step in undermining trust, though many other outlets gave Trump's wild claims a platform they didn't deserve. Calls to “Lock her up!” — based once again on cherry-picked facts and outright lies about 2016 Democratic presidential candidate Hillary Clinton, now with an added distaste for the rule of law — weren’t far behind.
Once Trump took office, the last guardrails of truth seemed to lift, and Fox News — no stranger to the benefits of deregulation — jumped right in to defend and parrot the president, or at least to let his lies go unchallenged. Almost as often, the process appeared to work in reverse: In the earliest days of his term, Trump caused an international incident after citing a fictitious terror attack in Sweden. His source? Carlson.
In running untruths about Rich's involvement in the leak of Democratic National Committee emails during the 2016 campaign, and legitimizing cruel conspiracy theories about Rich's 2016 shooting death in what police have said was likely an attempted robbery, several of the network's hosts went further — and landed their employer in legal hot water. “This blows the whole Russia collusion narrative completely out of the water," Hannity said. When Fox News retracted the story, Hannity remained resolute: “I am not Fox.com or FoxNews.com,” he said on his radio show. “I retracted nothing.” Rich’s parents sued Fox News over its repeated false claims about their son, and the case was settled for millions before Hannity and Dobbs were scheduled to testify under oath in the case.
That the ensuing investigation into the Trump campaign's ties to Russia was frequently deemed a “witch hunt” by Trump and his supporters at Fox News suggests that the vicious tarring of a dead man's reputation was not exactly a chastening experience. Special Counsel Robert Mueller became the new target, as did top levels of American law enforcement. “There is a cleansing needed in our FBI and Department of Justice,” railed Fox News host Jeanine Pirro. “It needs to be cleansed of individuals who should not just be fired but who need to be taken out in handcuffs.”
Fox News did not move from "fair and balanced" to de facto arm of the White House communications department overnight. As Showtime's 2019 docudrama "The Loudest Voice" reminds us, longtime Chief Executive Roger Ailes initiated the conservative network's hard-right turn toward fear and outrage in the aftermath of 9/11. By 2009, its primetime hosts, including Hannity, were championing and amplifying the "gotcha" videos of conservative operative James O’Keefe, eager for undercover "exposés" of liberal hypocrisy. Fox News covered O'Keefe's undercover "sting" impugning the community organizing group ACORN often and with plenty of verve, yet little scrutiny despite the iffy provenance of the video footage. Its high-powered spotlight contributed to the dissolution of the nonprofit organization in the U.S., though O'Keefe's work was later debunked as having been misleadingly obtained and edited.
The racist birtherism conspiracy about Obama, touted by then-reality show star Trump and echoed by Fox News, was the next step in undermining trust, though many other outlets gave Trump's wild claims a platform they didn't deserve. Calls to “Lock her up!” — based once again on cherry-picked facts and outright lies about 2016 Democratic presidential candidate Hillary Clinton, now with an added distaste for the rule of law — weren’t far behind.
Once Trump took office, the last guardrails of truth seemed to lift, and Fox News — no stranger to the benefits of deregulation — jumped right in to defend and parrot the president, or at least to let his lies go unchallenged. Almost as often, the process appeared to work in reverse: In the earliest days of his term, Trump caused an international incident after citing a fictitious terror attack in Sweden. His source? Carlson.
In running untruths about Rich's involvement in the leak of Democratic National Committee emails during the 2016 campaign, and legitimizing cruel conspiracy theories about Rich's 2016 shooting death in what police have said was likely an attempted robbery, several of the network's hosts went further — and landed their employer in legal hot water. “This blows the whole Russia collusion narrative completely out of the water," Hannity said. When Fox News retracted the story, Hannity remained resolute: “I am not Fox.com or FoxNews.com,” he said on his radio show. “I retracted nothing.” Rich’s parents sued Fox News over its repeated false claims about their son, and the case was settled for millions before Hannity and Dobbs were scheduled to testify under oath in the case.
That the ensuing investigation into the Trump campaign's ties to Russia was frequently deemed a “witch hunt” by Trump and his supporters at Fox News suggests that the vicious tarring of a dead man's reputation was not exactly a chastening experience. Special Counsel Robert Mueller became the new target, as did top levels of American law enforcement. “There is a cleansing needed in our FBI and Department of Justice,” railed Fox News host Jeanine Pirro. “It needs to be cleansed of individuals who should not just be fired but who need to be taken out in handcuffs.”
Tucker Carlson on the set of his Fox News show in Manhattan in 2018. (Jennifer S. Altman / For The Times)
When newly emboldened white supremacists marched in Charlottesville, Va., in summer 2017, in what now reads as a clear precursor to the Capitol attack — with one right-winger plowing his car into counterprotesters, killing one — Trump said there were “very fine people, on both sides.”
Fox News, now locked into the pattern, followed suit. Hannity floated the lie on his radio show that protesters at the rally may have been “actors hired by a publicity firm.” Carlson performed his own "both sides" shuffle in a widely reviled segment, calling "the left" "every bit as race-obsessed" as the white supremacists of "Unite the Right."
All that was just in Trump’s first year.
By the time the COVID-19 pandemic arrived, Fox News was poised to defend Trump at all costs, even if it meant putting viewers' lives in danger. Several on-air personalities and guests reinforced the idea that the pandemic was a hoax cooked up by House Speaker Nancy Pelosi (D-Calif.) and her pals. “This is yet another attempt to impeach the president,” Fox Business host Trish Regan said, before being ousted for her comments. Hannity went further: “They’re scaring the living hell out of people, and I see it again as like, ‘Oh, let’s bludgeon Trump with this new hoax.’”
The election presented a new conundrum. Though the network's decision desk received rightful plaudits — and provoked the president's ire — for sticking to the facts and calling the election for Biden, a number of its hosts backed Trump's baseless claims that the election had been stolen. Watchdog group Media Matters reported that the news network cast doubt on the results nearly 800 times just in the two-week period after Biden emerged as the victor.
"You should be outraged, you should be worried, you should be concerned at what has happened in the election and the lead-up to the election," Hannity said. "And frankly, you should be angry at what is building and building and building in the last four years in this all-out assault against a duly elected president that we the people elected.”
The true "all-out assault" that had been "building and building and building in the last four years" was an assault on truth itself, led in large part by Hannity and his ilk, and it's seemingly escaped the network's control. Myths about widespread election fraud were an easy sell after the network's ceaseless information warfare and the drip, drip, drip of normalizing outlandish tinfoil-hat conspiracies. Now, Fox News appears poised to double down on its preference for opinion over news and for personalities like Maria Bartiromo willing to carry water for the president and his dead-enders.
But the fear and outrage Fox News have inspired are all too real, changing not just viewership patterns but also the political landscape itself. In the aftermath of the domestic terror attack at the Capitol under the banner of "Stop the Steal," it's not just politicians who need to be held accountable for incitement. It's also media outlets like Fox News, which shaped and happily sold the Big Lie and must now confront, if there's any justice, the monsters of its own creation.
This story originally appeared in Los Angeles Times.
When newly emboldened white supremacists marched in Charlottesville, Va., in summer 2017, in what now reads as a clear precursor to the Capitol attack — with one right-winger plowing his car into counterprotesters, killing one — Trump said there were “very fine people, on both sides.”
Fox News, now locked into the pattern, followed suit. Hannity floated the lie on his radio show that protesters at the rally may have been “actors hired by a publicity firm.” Carlson performed his own "both sides" shuffle in a widely reviled segment, calling "the left" "every bit as race-obsessed" as the white supremacists of "Unite the Right."
All that was just in Trump’s first year.
By the time the COVID-19 pandemic arrived, Fox News was poised to defend Trump at all costs, even if it meant putting viewers' lives in danger. Several on-air personalities and guests reinforced the idea that the pandemic was a hoax cooked up by House Speaker Nancy Pelosi (D-Calif.) and her pals. “This is yet another attempt to impeach the president,” Fox Business host Trish Regan said, before being ousted for her comments. Hannity went further: “They’re scaring the living hell out of people, and I see it again as like, ‘Oh, let’s bludgeon Trump with this new hoax.’”
The election presented a new conundrum. Though the network's decision desk received rightful plaudits — and provoked the president's ire — for sticking to the facts and calling the election for Biden, a number of its hosts backed Trump's baseless claims that the election had been stolen. Watchdog group Media Matters reported that the news network cast doubt on the results nearly 800 times just in the two-week period after Biden emerged as the victor.
"You should be outraged, you should be worried, you should be concerned at what has happened in the election and the lead-up to the election," Hannity said. "And frankly, you should be angry at what is building and building and building in the last four years in this all-out assault against a duly elected president that we the people elected.”
The true "all-out assault" that had been "building and building and building in the last four years" was an assault on truth itself, led in large part by Hannity and his ilk, and it's seemingly escaped the network's control. Myths about widespread election fraud were an easy sell after the network's ceaseless information warfare and the drip, drip, drip of normalizing outlandish tinfoil-hat conspiracies. Now, Fox News appears poised to double down on its preference for opinion over news and for personalities like Maria Bartiromo willing to carry water for the president and his dead-enders.
But the fear and outrage Fox News have inspired are all too real, changing not just viewership patterns but also the political landscape itself. In the aftermath of the domestic terror attack at the Capitol under the banner of "Stop the Steal," it's not just politicians who need to be held accountable for incitement. It's also media outlets like Fox News, which shaped and happily sold the Big Lie and must now confront, if there's any justice, the monsters of its own creation.
This story originally appeared in Los Angeles Times.
Parkland families, Florida lawmakers denounce GOP Rep.’s tweets denying Parkland shooting
Bianca Padró Ocasio
Wed, January 20, 2021, 4:00 AM
Newly surfaced Facebook messages from 2018 show U.S. Rep. Marjorie Taylor Greene agreeing with comments spreading the conspiracy that the Parkland school shooting where 17 students and faculty members at Marjory Stoneman Douglas High were killed was a “false flag planned shooting.”
In a post about a story from Fox News that she shared on May 15, 2018, Greene questioned why Broward Sheriff’s school resource deputy Scot Peterson was receiving his state pension. Peterson resigned from BSO after surveillance footage showed he took cover outside the school building while the Feb. 14, 2018, shooting was going on.
Several people commented saying it “sounds like a payoff” for “going along with the evil plan.”
“My thoughts exactly!!” said Greene said in one of the responses.
Green is an adherent of the QAnon conspiracy movement. Twitter temporarily suspended her account on Sunday after she tweeted conspiracy-laced theories about the Georgia elections, 11 days after pro-Trump mobs overtook the Capitol in Washington on Jan. 6, resulting in the deaths of five people, including a Capitol Police officer.
Greene’s 2-year-old interactions were first reported by Media Matters For America, the progressive watchdog monitoring conservative misinformation.
Greene, a newly elected Republican from Georgia, championed Trump’s false claims about voter fraud in the 2020 presidential election, claims scores of judges threw out of court for lack of evidence.
Several South Florida Democrats denounced Greene’s comments that have just come to light, including U.S. Rep. Ted Deutch, who represents Parkland.
“Radical conspiracy theorists cruelly came to our community in the days after the mass shooting at Marjory Stoneman Douglas High School to outrageously deny that 17 people were killed,” Deutch said. “It’s infuriating that someone like that was elected to Congress.”
Deutch said Greene should “disavow these comments, she should apologize to everyone that she has offended, and, most importantly, she should tell her followers the truth.”
Florida’s Director of Emergency Management Jared Moskowitz, of Coral Springs, said in a tweet that Greene should resign from her position and come to speak to the families of the victims at Marjory Stoneman Douglas High School.
Fred Guttenberg, the father of 14-year-old shooting victim Jamie Guttenberg, said in a series of tweets that Greene should resign and apologize for her past comments.
“It appears you think or at one time thought the school shooting in Florida was a false flag. I know you have met Parkland parents. This is my daughter Jaime, she was killed that day. Do you still believe this? Why would you say this?” Guttenberg tweeted.
Bianca Padró Ocasio
Wed, January 20, 2021, 4:00 AM
Newly surfaced Facebook messages from 2018 show U.S. Rep. Marjorie Taylor Greene agreeing with comments spreading the conspiracy that the Parkland school shooting where 17 students and faculty members at Marjory Stoneman Douglas High were killed was a “false flag planned shooting.”
In a post about a story from Fox News that she shared on May 15, 2018, Greene questioned why Broward Sheriff’s school resource deputy Scot Peterson was receiving his state pension. Peterson resigned from BSO after surveillance footage showed he took cover outside the school building while the Feb. 14, 2018, shooting was going on.
Several people commented saying it “sounds like a payoff” for “going along with the evil plan.”
“My thoughts exactly!!” said Greene said in one of the responses.
Green is an adherent of the QAnon conspiracy movement. Twitter temporarily suspended her account on Sunday after she tweeted conspiracy-laced theories about the Georgia elections, 11 days after pro-Trump mobs overtook the Capitol in Washington on Jan. 6, resulting in the deaths of five people, including a Capitol Police officer.
Greene’s 2-year-old interactions were first reported by Media Matters For America, the progressive watchdog monitoring conservative misinformation.
Greene, a newly elected Republican from Georgia, championed Trump’s false claims about voter fraud in the 2020 presidential election, claims scores of judges threw out of court for lack of evidence.
Several South Florida Democrats denounced Greene’s comments that have just come to light, including U.S. Rep. Ted Deutch, who represents Parkland.
“Radical conspiracy theorists cruelly came to our community in the days after the mass shooting at Marjory Stoneman Douglas High School to outrageously deny that 17 people were killed,” Deutch said. “It’s infuriating that someone like that was elected to Congress.”
Deutch said Greene should “disavow these comments, she should apologize to everyone that she has offended, and, most importantly, she should tell her followers the truth.”
Florida’s Director of Emergency Management Jared Moskowitz, of Coral Springs, said in a tweet that Greene should resign from her position and come to speak to the families of the victims at Marjory Stoneman Douglas High School.
Fred Guttenberg, the father of 14-year-old shooting victim Jamie Guttenberg, said in a series of tweets that Greene should resign and apologize for her past comments.
“It appears you think or at one time thought the school shooting in Florida was a false flag. I know you have met Parkland parents. This is my daughter Jaime, she was killed that day. Do you still believe this? Why would you say this?” Guttenberg tweeted.
China says it is ready to help Kenya with debt
Mon, January 18, 2021
China stands ready to help Kenya deal with its debt challenges, it's embassy in Nairobi said on Monday (January 18) adding that both sides are holding "smooth" talks over the issues.
Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade.
But after months of lockdown measures, the East African country's revenues have been pummeled, its debts are falling due and it is grappling with gaping fiscal deficits.
In a statement the embassy in Nairobi said China attaches "great importance" to debt suspension and alleviation in African countries, including Kenya.
The embassy said China has signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative.
That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June but last week World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of private sector support for the initiative at a time when many countries are grappling with economic and health crises.
"Looking at it from the standpoint of the private sector, they say a contract is a contract. But I guess I would push back and say throughout history there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I'm, I'm, I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors."
The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal.
Last week Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
Video Transcript
- China stands ready to help Kenya deal with its debt challenges, its embassy in Nairobi said on Monday. Adding that both sides are holding smooth talks over the issues. Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade. But after months of lockdown measures, the East African country's revenues have been pummeled. Its debts are falling due and it's grappling with gaping fiscal deficits.
In a statement, the embassy in Nairobi said China attaches great importance to debt suspension and alleviation in African countries, including Kenya. The embassy said China had signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative. That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June. But last week, World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of support for the initiative from the private sector, at a time when many countries are grappling with economic and health crises.
DAVID MALPASS: Looking at it from the standpoint of the private sector, they say a contract's a contract. But I guess I would push back and say throughout history, there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors.
- The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal. Last week, Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
China stands ready to help Kenya deal with its debt challenges, it's embassy in Nairobi said on Monday (January 18) adding that both sides are holding "smooth" talks over the issues.
Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade.
But after months of lockdown measures, the East African country's revenues have been pummeled, its debts are falling due and it is grappling with gaping fiscal deficits.
In a statement the embassy in Nairobi said China attaches "great importance" to debt suspension and alleviation in African countries, including Kenya.
The embassy said China has signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative.
That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June but last week World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of private sector support for the initiative at a time when many countries are grappling with economic and health crises.
"Looking at it from the standpoint of the private sector, they say a contract is a contract. But I guess I would push back and say throughout history there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I'm, I'm, I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors."
The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal.
Last week Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
Video Transcript
- China stands ready to help Kenya deal with its debt challenges, its embassy in Nairobi said on Monday. Adding that both sides are holding smooth talks over the issues. Beijing is one of Kenya's biggest external creditors, having lent billions of dollars for the construction of rail lines and other infrastructure projects in the past decade. But after months of lockdown measures, the East African country's revenues have been pummeled. Its debts are falling due and it's grappling with gaping fiscal deficits.
In a statement, the embassy in Nairobi said China attaches great importance to debt suspension and alleviation in African countries, including Kenya. The embassy said China had signed debt service suspension agreements with 12 African countries and provided waivers of matured interest-free loans for 15 under the G20 Debt Service Suspension Initiative. That scheme allows the world's poorer countries to defer official bilateral payments through to the end of June. But last week, World Bank President David Malpass, speaking at the Reuters Next conference, expressed frustration at a lack of support for the initiative from the private sector, at a time when many countries are grappling with economic and health crises.
DAVID MALPASS: Looking at it from the standpoint of the private sector, they say a contract's a contract. But I guess I would push back and say throughout history, there have been occasions where there needs to be deep debt reduction and this clearly is one of those occasions. So I urge the private sector to take a look country by country at the over-indebtedness and look for ways to share the burden with the official bilateral creditors.
- The Chinese embassy did not say whether Kenya will get relief through the same G20 initiative or a separate deal. Last week, Kenya secured a debt repayment relief deal with the Paris Club of international lenders and is seeking further relief from other bilateral creditors.
Irresistible? Pension funds plot move on China's $16 trillion bond market
Dhara Ranasinghe and Saikat Chatterjee
Tue, January 19, 2021
Irresistible? Pension funds plot move on China's $16 trillion bond market
Dhara Ranasinghe and Saikat Chatterjee
Tue, January 19, 2021
Irresistible? Pension funds plot move on China's $16 trillion bond market
FILE PHOTO: Chinese Yuan banknotes are seen in this illustration
By Dhara Ranasinghe and Saikat Chatterjee
LONDON (Reuters) - China's $16 trillion bond market is the proverbial elephant in the investment room. But it's becoming too big to ignore, even for the most risk-averse Western investors.
A large, A+ rated sovereign market that pays 3% yields, with minimal volatility? It's looking increasingly alluring for European pension funds swimming in sub-zero bond yields as aging populations stretch their finances.
For some, the benefits are beginning to outweigh the political risks, and they are upping allocations to China, or considering doing so, according to Reuters' interviews with half a dozen firms that advise and manage money for pension funds.
"Not all our clients invest in China's bond market, but they are all looking into it," said Sandor Steverink, head of Treasuries at APG, which manages a third of the assets of the 1.5-trillion-euro ($1.8 trillion) Dutch pension industry.
Dutch 10-year bond yields are languishing at around -0.4%, spelling losses for any investor who holds them to maturity, a picture reflected across Europe.
Such fund interest is a boon for Beijing, which is seeking to internationalise its financial markets and lure big-ticket overseas investors as its once-mighty trade surpluses dwindle. Europe's pension industry alone is worth $4 trillion.
China's debt market is the world's second-largest after the United States. Yet while foreigners own a third of the U.S. Treasury market, they hold just 9.7% of China's sovereign debt, according to government data.
Western pension funds make up a tiny cohort of the foreign investors in yuan bond markets, but their presence is growing.
Of the $9.5 trillion of assets under management from corporate and public pension funds globally, 0.26% was held in Chinese bonds as of the third quarter of 2020, up from 0.04% in 2015, according to data from institutional asset managers shared with financial data provider eVestment.
Beijing's drive to draw foreign money has taken a whack of late as tensions with the United States have resulted in the ejection of several Chinese companies from U.S. equity indexes and curbs on U.S. government pension funds investing in China. There have also been defaults by state-owned firms.
Investors also cite potential pitfalls such as less market transparency and liquidity, with some Japanese investors protesting China's inclusion into FTSE Russell's World Government Bond Index.
In addition, some say the country still has further to go in opening up its markets and worry that while capital controls, which made repatriation of profits difficult, have been eased, they could also be tightened.
China's relatively successful handling of the COVID-19 crisis and brighter economic prospects has buoyed confidence, though.
APG runs around 100 million euros in a local Chinese bonds strategy it started just over a year ago. Steverink acknowledged that political risks gave clients "cold feet", but predicted that would change as more cash swept into the debt.
"You have to explain if you invest in China. You don't need to explain if you don't invest. That's how it is for the time being," he said.
"In the decades to come, it will be the other way around."
2020: WATERSHED YEAR
Pension funds themselves are famously secretive about their investment allocation trends, and more than two dozen contacted by Reuters, mostly European, declined to comment on this.
However, their money managers, and certain central banks that track investment flows, can provide a window.
China has only stepped up efforts to open up bond markets in the past decade, so foreign investment is starting from a low base. While an increase in broader investment interest is not a new phenomenon, pension funds - the biggest and most cautious players - are now beginning to go with the flow.
The investors interviewed by Reuters said 2020 had been a watershed year, with more developed world bond yields collapsing into negative territory on the back of massive monetary stimulus, combined with China relaxing restrictions on foreign investment.
Insight Investments is looking into setting up a Chinese bond fund on behalf of UK pension funds, Sabrina Jacobs, a fixed-income investment specialist at the $1 trillion asset manager told Reuters.
She declined to give details to protect the anonymity of her clients but said her company, part of the BNY Mellon Group, had also been asked by other UK and European-based pension funds to explore Chinese debt investment.
Jacobs said China met many of the criteria pension investors had when investing overseas - besides size and credit ratings, the yuan is less volatile than other emerging currencies.
Essentially, that means daily swings with the potential to wreck returns are less common; in fact yuan volatility is lower than some G10 currencies such as the Australian dollar.
Jacobs also said Chinese markets moved less in tandem with global peers.
"While you have a very high correlation between, say (German) Bunds and Treasuries, Chinese government bonds are only 15 to 20% correlated to other bond markets, the big ones globally. So, it is an attractive diversifier as well."
Insight currently holds around $400 million of Chinese debt within its emerging market and global government bond funds.
Some other investors who allocate funds on behalf of European pension fund clients, including Pictet Asset Management and Willis Towers Watson, also said they were seeing more interest in Chinese bonds from the pension industry.
'A LOT FURTHER TO GO'
Pictet, with assets of $600 billion, does not break down flows by investor type but said inflows to its Chinese bond fund had risen from $144 million to $770 million in 2020.
Shaniel Ramjee, part of Pictet's multi-asset team, is confident that Chinese debt has moved past being a niche asset for large institutions like pension funds, but said the trend was in its early stages.
"We haven't seen those dedicated allocations come through in large amounts yet, so there's a lot further to go on this," he added.
Dutch pension funds held 22.4 billion euros in overall investments in China as of the third quarter of 2019, mainly in stocks, with just 300 million euros in bonds, the Netherlands central bank said. That's up from 200 million euros in bonds in 2017.
Latest available data from Germany's central bank shows that German funds, including pension funds, invested a total of 2.5 billion euros in Chinese bonds in November 2020 alone, a 62% rise from the same month a year earlier.
Sweden's AP2, a national pension fund and a rare example of one that publishes its allocation to China, has had a stable 1% allocation to Chinese government bonds since 2017. It manages roughly $43 billion of assets.
'LOOKING HARD AT CHINA'
China, for its part, needs overseas pension money as its shift towards a consumption-driven economy has diminished its trade surpluses.
Pension money also has a particular cachet, because of size - retirement savings in the top 22 economies currently top $45 trillion - and its "sticky", long-term nature.
All this has motivated China to smooth access to its markets, enabling its bonds to join high-profile debt benchmarks compiled by FTSE Russell and Bloomberg/Barclays.
China's interbank bond market regulator did not respond to requests for comment on foreign pension fund holdings in Chinese bonds.
Data from the Central China Depository & Clearing Co (CCDC), shared with Reuters, shows almost 200 foreign funds had invested in Chinese bonds as of end-September via the China Interbank Bond Market (CIBM), 42% above year-ago levels. The CCDC does not compile specific data on pension fund flows.
"Pensions funds say they are now looking hard at China as an alternative," said Robin Marshall, FTSE Russell's director of bond market research. "They would not have looked at it a few years ago."
($1 = 0.7375 pounds; $1 = 0.8245 euros)
(Corrects headline, first and seventh paragraph to clarify $16 trillion refers to entire bond market; paragraph 38 to refer to interbank bond market regulator, not central bank)
(Reporting by Dhara Ranasinghe and Saikat Chatterjee; Additional reporting by Toby Sterling in AMSTERDAM; Maiya Keidan in TORONTO, Andrew Galbraith in SHANGHAI and Karin Strohecker in LONDON; Editing by Sujata Rao and Pravin Char)
By Dhara Ranasinghe and Saikat Chatterjee
LONDON (Reuters) - China's $16 trillion bond market is the proverbial elephant in the investment room. But it's becoming too big to ignore, even for the most risk-averse Western investors.
A large, A+ rated sovereign market that pays 3% yields, with minimal volatility? It's looking increasingly alluring for European pension funds swimming in sub-zero bond yields as aging populations stretch their finances.
For some, the benefits are beginning to outweigh the political risks, and they are upping allocations to China, or considering doing so, according to Reuters' interviews with half a dozen firms that advise and manage money for pension funds.
"Not all our clients invest in China's bond market, but they are all looking into it," said Sandor Steverink, head of Treasuries at APG, which manages a third of the assets of the 1.5-trillion-euro ($1.8 trillion) Dutch pension industry.
Dutch 10-year bond yields are languishing at around -0.4%, spelling losses for any investor who holds them to maturity, a picture reflected across Europe.
Such fund interest is a boon for Beijing, which is seeking to internationalise its financial markets and lure big-ticket overseas investors as its once-mighty trade surpluses dwindle. Europe's pension industry alone is worth $4 trillion.
China's debt market is the world's second-largest after the United States. Yet while foreigners own a third of the U.S. Treasury market, they hold just 9.7% of China's sovereign debt, according to government data.
Western pension funds make up a tiny cohort of the foreign investors in yuan bond markets, but their presence is growing.
Of the $9.5 trillion of assets under management from corporate and public pension funds globally, 0.26% was held in Chinese bonds as of the third quarter of 2020, up from 0.04% in 2015, according to data from institutional asset managers shared with financial data provider eVestment.
Beijing's drive to draw foreign money has taken a whack of late as tensions with the United States have resulted in the ejection of several Chinese companies from U.S. equity indexes and curbs on U.S. government pension funds investing in China. There have also been defaults by state-owned firms.
Investors also cite potential pitfalls such as less market transparency and liquidity, with some Japanese investors protesting China's inclusion into FTSE Russell's World Government Bond Index.
In addition, some say the country still has further to go in opening up its markets and worry that while capital controls, which made repatriation of profits difficult, have been eased, they could also be tightened.
China's relatively successful handling of the COVID-19 crisis and brighter economic prospects has buoyed confidence, though.
APG runs around 100 million euros in a local Chinese bonds strategy it started just over a year ago. Steverink acknowledged that political risks gave clients "cold feet", but predicted that would change as more cash swept into the debt.
"You have to explain if you invest in China. You don't need to explain if you don't invest. That's how it is for the time being," he said.
"In the decades to come, it will be the other way around."
2020: WATERSHED YEAR
Pension funds themselves are famously secretive about their investment allocation trends, and more than two dozen contacted by Reuters, mostly European, declined to comment on this.
However, their money managers, and certain central banks that track investment flows, can provide a window.
China has only stepped up efforts to open up bond markets in the past decade, so foreign investment is starting from a low base. While an increase in broader investment interest is not a new phenomenon, pension funds - the biggest and most cautious players - are now beginning to go with the flow.
The investors interviewed by Reuters said 2020 had been a watershed year, with more developed world bond yields collapsing into negative territory on the back of massive monetary stimulus, combined with China relaxing restrictions on foreign investment.
Insight Investments is looking into setting up a Chinese bond fund on behalf of UK pension funds, Sabrina Jacobs, a fixed-income investment specialist at the $1 trillion asset manager told Reuters.
She declined to give details to protect the anonymity of her clients but said her company, part of the BNY Mellon Group, had also been asked by other UK and European-based pension funds to explore Chinese debt investment.
Jacobs said China met many of the criteria pension investors had when investing overseas - besides size and credit ratings, the yuan is less volatile than other emerging currencies.
Essentially, that means daily swings with the potential to wreck returns are less common; in fact yuan volatility is lower than some G10 currencies such as the Australian dollar.
Jacobs also said Chinese markets moved less in tandem with global peers.
"While you have a very high correlation between, say (German) Bunds and Treasuries, Chinese government bonds are only 15 to 20% correlated to other bond markets, the big ones globally. So, it is an attractive diversifier as well."
Insight currently holds around $400 million of Chinese debt within its emerging market and global government bond funds.
Some other investors who allocate funds on behalf of European pension fund clients, including Pictet Asset Management and Willis Towers Watson, also said they were seeing more interest in Chinese bonds from the pension industry.
'A LOT FURTHER TO GO'
Pictet, with assets of $600 billion, does not break down flows by investor type but said inflows to its Chinese bond fund had risen from $144 million to $770 million in 2020.
Shaniel Ramjee, part of Pictet's multi-asset team, is confident that Chinese debt has moved past being a niche asset for large institutions like pension funds, but said the trend was in its early stages.
"We haven't seen those dedicated allocations come through in large amounts yet, so there's a lot further to go on this," he added.
Dutch pension funds held 22.4 billion euros in overall investments in China as of the third quarter of 2019, mainly in stocks, with just 300 million euros in bonds, the Netherlands central bank said. That's up from 200 million euros in bonds in 2017.
Latest available data from Germany's central bank shows that German funds, including pension funds, invested a total of 2.5 billion euros in Chinese bonds in November 2020 alone, a 62% rise from the same month a year earlier.
Sweden's AP2, a national pension fund and a rare example of one that publishes its allocation to China, has had a stable 1% allocation to Chinese government bonds since 2017. It manages roughly $43 billion of assets.
'LOOKING HARD AT CHINA'
China, for its part, needs overseas pension money as its shift towards a consumption-driven economy has diminished its trade surpluses.
Pension money also has a particular cachet, because of size - retirement savings in the top 22 economies currently top $45 trillion - and its "sticky", long-term nature.
All this has motivated China to smooth access to its markets, enabling its bonds to join high-profile debt benchmarks compiled by FTSE Russell and Bloomberg/Barclays.
China's interbank bond market regulator did not respond to requests for comment on foreign pension fund holdings in Chinese bonds.
Data from the Central China Depository & Clearing Co (CCDC), shared with Reuters, shows almost 200 foreign funds had invested in Chinese bonds as of end-September via the China Interbank Bond Market (CIBM), 42% above year-ago levels. The CCDC does not compile specific data on pension fund flows.
"Pensions funds say they are now looking hard at China as an alternative," said Robin Marshall, FTSE Russell's director of bond market research. "They would not have looked at it a few years ago."
($1 = 0.7375 pounds; $1 = 0.8245 euros)
(Corrects headline, first and seventh paragraph to clarify $16 trillion refers to entire bond market; paragraph 38 to refer to interbank bond market regulator, not central bank)
(Reporting by Dhara Ranasinghe and Saikat Chatterjee; Additional reporting by Toby Sterling in AMSTERDAM; Maiya Keidan in TORONTO, Andrew Galbraith in SHANGHAI and Karin Strohecker in LONDON; Editing by Sujata Rao and Pravin Char)
Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts
Alex Longley
Wed, January 20, 2021
Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts
(Bloomberg) -- Saudi Arabia’s oil production cuts have hit the tanker market so hard that owners of the biggest vessels are effectively subsidizing cargo deliveries on the industry’s main trade route.
Supertankers delivering 2-million-barrel shipments of the kingdom’s oil to China are losing $736 a day for the privilege, according to data from the Baltic Exchange in London on Tuesday. While owners might, in practice, be able to mitigate such losses by ordering captains to sail the vessels slower, the reality is that some ships are losing money on Middle East-to-Asia deliveries, according to Halvor Ellefsen, a shipbroker at Fearnleys.
“Even the most economical ships out there are struggling to get positive numbers,” he said. “It’s carnage right now.”
While tanker rates weren’t particularly strong up to the end of last year, they weren’t disastrous either. What really seems to have tipped the balance is when Saudi Arabia, wary of oil demand risks posed by Covid-19, announced that it would unilaterally cut 1 million barrels a day of production to support crude prices. That removed a big chunk of seaborne shipments in a market where cargoes were already curtailed.
It also came at a time when the supply of ships was being bolstered. Huge numbers of tankers had been used to store crude at sea when an oil market glut built up last year, and that’s now tumbling. Since its peak last year, about 132 million barrels of oil are no longer being stored at sea, enough to fill 66 supertankers, Vortexa data shows.
Traders also reported lower demand over the past few days from some buyers in Asia where refineries will soon start carrying out seasonal maintenance programs and therefore need fewer crude cargoes.
Seeking Approvals
While negative earnings may look illogical, owners might be tempted to operate ships at a loss because there are still costs involved in keeping a ship at anchor -- so they could lose money anyway. Vessels that spend too long without moving cargoes also risk losing much-prized approvals, whereby oil companies deem the ships fit for charter. Approvals can take time to secure.
Negative earnings can arise when the fees that oil companies pay to charter ships don’t cover the costs involved. At that point, owners either have to reject the bookings or pay some of the ship’s fuel bills.
As a result of the slump, analysts are expecting to see the tanker fleet begin to slow down when ships return, sailing in ballast, from having delivered cargoes.
“Earnings estimates are now sensitive to speed assumption,” said Clarksons Platou analysts including Frode Moerkedal. “Although we cannot see it in the average data yet, vessel speed on the empty return voyage from the Far East should go down.”
Alex Longley
Wed, January 20, 2021
Oil Tanker Owners Pay to Move Crude in Wake of Supply Cuts
(Bloomberg) -- Saudi Arabia’s oil production cuts have hit the tanker market so hard that owners of the biggest vessels are effectively subsidizing cargo deliveries on the industry’s main trade route.
Supertankers delivering 2-million-barrel shipments of the kingdom’s oil to China are losing $736 a day for the privilege, according to data from the Baltic Exchange in London on Tuesday. While owners might, in practice, be able to mitigate such losses by ordering captains to sail the vessels slower, the reality is that some ships are losing money on Middle East-to-Asia deliveries, according to Halvor Ellefsen, a shipbroker at Fearnleys.
“Even the most economical ships out there are struggling to get positive numbers,” he said. “It’s carnage right now.”
While tanker rates weren’t particularly strong up to the end of last year, they weren’t disastrous either. What really seems to have tipped the balance is when Saudi Arabia, wary of oil demand risks posed by Covid-19, announced that it would unilaterally cut 1 million barrels a day of production to support crude prices. That removed a big chunk of seaborne shipments in a market where cargoes were already curtailed.
It also came at a time when the supply of ships was being bolstered. Huge numbers of tankers had been used to store crude at sea when an oil market glut built up last year, and that’s now tumbling. Since its peak last year, about 132 million barrels of oil are no longer being stored at sea, enough to fill 66 supertankers, Vortexa data shows.
Traders also reported lower demand over the past few days from some buyers in Asia where refineries will soon start carrying out seasonal maintenance programs and therefore need fewer crude cargoes.
Seeking Approvals
While negative earnings may look illogical, owners might be tempted to operate ships at a loss because there are still costs involved in keeping a ship at anchor -- so they could lose money anyway. Vessels that spend too long without moving cargoes also risk losing much-prized approvals, whereby oil companies deem the ships fit for charter. Approvals can take time to secure.
Negative earnings can arise when the fees that oil companies pay to charter ships don’t cover the costs involved. At that point, owners either have to reject the bookings or pay some of the ship’s fuel bills.
As a result of the slump, analysts are expecting to see the tanker fleet begin to slow down when ships return, sailing in ballast, from having delivered cargoes.
“Earnings estimates are now sensitive to speed assumption,” said Clarksons Platou analysts including Frode Moerkedal. “Although we cannot see it in the average data yet, vessel speed on the empty return voyage from the Far East should go down.”
Adani to Raise $2.5 Billion From Green Deal With Total
Baiju Kalesh, Manuel Baigorri, Francois de Beaupuy and P R Sanjai
Mon, January 18, 2021
(Bloomberg) -- Indian billionaire Gautam Adani is raising $2.5 billion from a deal that includes the sale of a minority stake in his renewables business to French energy giant Total SE, a transaction that may help the tycoon cut group debt.
Paris-based Total will acquire 20% of Adani Green Energy Ltd. and a board seat as well as a 50% stake in a portfolio of operating solar assets with 2.35 gigawatts capacity, the company said Monday in a statement, confirming an earlier report by Bloomberg News. But shares of Adani Green have more than quadrupled in value in the past year in Mumbai, giving the company a market value of about $20 billion.
Adani is the latest Indian tycoon to raise money by selling a piece of his empire to an overseas partner, as rising consumption of electricity to fuels and mobile data makes the country an attractive destination for some investors. Last year, Mukesh Ambani -- India’s richest man -- mopped up about $27 billion from Facebook Inc., Google and private-equity investors for his technology and retail ventures.
“Primarily, this fund infusion will help Adani lower its leverage,” said Chakri Lokapriya, chief executive officer at TCG Asset Management in Mumbai. “Thanks to a series of deals, Adani is highly leveraged at this point of time.”
The Adani group, which started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator. In 2019, Adani started focusing on airports, and now he’s trying to enter sectors including data storage and financial services.
The group had an overall gross debt of 1.74 trillion rupees ($24 billion) as of end-September, according to a November report from Credit Suisse. Adani Enterprises Ltd., the biggest listed company in his group, had about $1.7 billion of consolidated debt as of March 2020, according to Brickwork Ratings.
The latest transaction marks Total’s third commitment to the Adani group. In 2019, the French firm spent $600 million to buy a 37.4% stake in Adani Gas Ltd., now called Adani Total Gas, and in February last year, acquired 50% of a solar assets joint venture.
“India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas,” Total CEO Patrick Pouyanne said in the statement.
It’s also Total’s third deal in a week in the renewables area, following the acquisition of a French biogas producer and of a stake in a large U.S. solar portfolio, underscoring mounting pressure from investors, governments and consumers on energy giants to reduce carbon dioxide emissions.
Total, which invested $8 billion from 2016 to 2020 in battery manufacturing, power utilities, solar and wind projects, intends to increase spending on electricity and clean energy to become one of the top five renewable companies by the end of the decade. The producer, which had close to 7 gigawatts of gross renewable power capacity at the end of last year, is targeting 35 gigawatts by 2025.
Stiff Targets
“Renewable energy investment will have to be ramped up and oil and gas supermajors have set themselves fairly stiff targets,” said Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. “India, given its increasing energy demand, renewable energy potential and policy intent, is an attractive investment destination.”
Adani Green is targeting 25 gigawatts of renewable capacity by 2025, the company said in a separate statement. Chairman Adani last year signaled there was room for founders to dilute their stake in the company and flagged global energy producers, including Total, were interested in investing as they expand their renewable portfolios.
Adani Green shares rose as much as 3.4% on Monday in Mumbai.
While Adani has done well at home, his controversial Carmichael coal mine in Australia has faced criticism from environmentalists, including from activist Greta Thunberg. Adani added $22.5 billion to his net worth last year to become India’s second-richest man, according to the Bloomberg Billionaires Index.
Baiju Kalesh, Manuel Baigorri, Francois de Beaupuy and P R Sanjai
Mon, January 18, 2021
(Bloomberg) -- Indian billionaire Gautam Adani is raising $2.5 billion from a deal that includes the sale of a minority stake in his renewables business to French energy giant Total SE, a transaction that may help the tycoon cut group debt.
Paris-based Total will acquire 20% of Adani Green Energy Ltd. and a board seat as well as a 50% stake in a portfolio of operating solar assets with 2.35 gigawatts capacity, the company said Monday in a statement, confirming an earlier report by Bloomberg News. But shares of Adani Green have more than quadrupled in value in the past year in Mumbai, giving the company a market value of about $20 billion.
Adani is the latest Indian tycoon to raise money by selling a piece of his empire to an overseas partner, as rising consumption of electricity to fuels and mobile data makes the country an attractive destination for some investors. Last year, Mukesh Ambani -- India’s richest man -- mopped up about $27 billion from Facebook Inc., Google and private-equity investors for his technology and retail ventures.
“Primarily, this fund infusion will help Adani lower its leverage,” said Chakri Lokapriya, chief executive officer at TCG Asset Management in Mumbai. “Thanks to a series of deals, Adani is highly leveraged at this point of time.”
The Adani group, which started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator. In 2019, Adani started focusing on airports, and now he’s trying to enter sectors including data storage and financial services.
The group had an overall gross debt of 1.74 trillion rupees ($24 billion) as of end-September, according to a November report from Credit Suisse. Adani Enterprises Ltd., the biggest listed company in his group, had about $1.7 billion of consolidated debt as of March 2020, according to Brickwork Ratings.
The latest transaction marks Total’s third commitment to the Adani group. In 2019, the French firm spent $600 million to buy a 37.4% stake in Adani Gas Ltd., now called Adani Total Gas, and in February last year, acquired 50% of a solar assets joint venture.
“India is the right place to put into action our energy transition strategy based on two pillars: renewables and natural gas,” Total CEO Patrick Pouyanne said in the statement.
It’s also Total’s third deal in a week in the renewables area, following the acquisition of a French biogas producer and of a stake in a large U.S. solar portfolio, underscoring mounting pressure from investors, governments and consumers on energy giants to reduce carbon dioxide emissions.
Total, which invested $8 billion from 2016 to 2020 in battery manufacturing, power utilities, solar and wind projects, intends to increase spending on electricity and clean energy to become one of the top five renewable companies by the end of the decade. The producer, which had close to 7 gigawatts of gross renewable power capacity at the end of last year, is targeting 35 gigawatts by 2025.
Stiff Targets
“Renewable energy investment will have to be ramped up and oil and gas supermajors have set themselves fairly stiff targets,” said Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. “India, given its increasing energy demand, renewable energy potential and policy intent, is an attractive investment destination.”
Adani Green is targeting 25 gigawatts of renewable capacity by 2025, the company said in a separate statement. Chairman Adani last year signaled there was room for founders to dilute their stake in the company and flagged global energy producers, including Total, were interested in investing as they expand their renewable portfolios.
Adani Green shares rose as much as 3.4% on Monday in Mumbai.
While Adani has done well at home, his controversial Carmichael coal mine in Australia has faced criticism from environmentalists, including from activist Greta Thunberg. Adani added $22.5 billion to his net worth last year to become India’s second-richest man, according to the Bloomberg Billionaires Index.
Shale Driller Stuns Creditors as Argentina’s Dollars Dwindle
Scott Squires and Jonathan Gilbert
Tue, January 19, 2021
Shale Driller Stuns Creditors as Argentina’s Dollars Dwindle
(Bloomberg) -- In the 99 years since it was founded to pump the oil fields of Patagonia, Argentine energy driller YPF SA has been whipsawed by countless booms and busts. If global oil markets weren’t collapsing, it seemed, then Argentina was mired in a debt crisis that was wreaking havoc on the whole nation’s finances.
Never, though, had the company been pushed into a large-scale default of any kind. Until, it would appear, now. Word of this came in an odd way: Officials at state-run YPF sent a press release in the dead of night laying out a plan to saddle creditors with losses in a debt exchange.
Implicit in its statement was a threat that traders immediately understood -- failure to reach a restructuring deal could lead to a flat-out suspension of debt payments -- and they began frantically unloading the shale driller’s bonds the next morning. Today, some two weeks later, the securities trade as low as 56 cents on the dollar.
Creditors, including BlackRock Inc. and Howard Marks’s Oaktree Capital Group, are gearing up for bare-knuckled negotiations just four months after ironing out a restructuring deal with the government that marked the country’s third sovereign default this century alone.
YPF’s downfall underscores just how hard the pandemic has hammered both the global oil industry and the perennially hobbled Argentine economy. Dollars are now so scarce in Buenos Aires that the central bank refused to let YPF buy the full amount it needed to pay notes coming due in March. That was the immediate cause of the restructuring announcement.
A longer view reveals a steady decline in the company’s finances since the government re-nationalized it in 2012 and forced it to swell payrolls, artificially hold down domestic fuel prices and skimp on investments, leading to four straight years of oil-and-gas output declines.
YPF must now reach a deal with creditors to get its finances in order to boost investment in the gas-rich Vaca Muerta shale formation in Patagonia.
The task is even more urgent as the South American winter approaches with YPF unable to meet domestic gas demand, meaning Argentina will have to boost imports -- and fork over precious hard currency -- in the middle of a global spike in prices.
“The central bank’s decision really put YPF between a rock and a hard place,” said Lorena Reich, a corporate-debt analyst at Lucror Analytics in Buenos Aires.
In private conversations with investors, YPF officials are portraying the deal as a voluntary exchange and are insisting that they will pay back all their bonds -- with the exception of the notes coming due in March -- whether they are tendered in the swap or not. But that’s certainly not how investors interpret the situation, and ratings companies say the proposal constitutes a distressed exchange that would be tantamount to default.
The company’s $413 million in bonds due in March tumbled 6.5 cents Tuesday, the most since September, to about 82 cents on the dollar.
Overall, YPF is seeking to restructure $6.2 billion of bonds, pushing back a total of $2.1 billion in debt payments through the end of next year so that it can invest the money in bolstering production. The deal offers investors a slight upside from current bond prices, but would stick creditors with losses of as high as 16% on a net-present-value basis, according to calculations by Portfolio Personal Inversiones, a local brokerage.
While some investors had anticipated YPF would try to refinance its short-term debt -- without imposing any losses -- the plan to restructure virtually all the company’s overseas bonds was a big surprise.
“The offer crossed the line of reason,” said Ray Zucaro, the chief investment officer at RVX Asset Management in Miami, who owns YPF bonds. “There was no reason they needed to include all the bonds when they only needed relief on the short-dated notes.”
YPF says it included all its securities in the swap to give all its bondholders a fair shot at exchanging into a new export-backed note maturing in 2026 that offers more protection than unsecured debt.
Creditors have begun to form groups to negotiate the terms of the restructuring, and while the talks haven’t begun in earnest, the company says it’s willing to negotiate. On Jan. 14, YPF amended some of the rules for its consent solicitation after investor outcry over a procedural issue.
Cash Crunch
Argentina’s cash crunch couldn’t come at a worse time for YPF, which was already facing a drop in demand because of the pandemic. The driller needs more investment to ramp up capital-intensive shale production in Vaca Muerta as aging traditional fields decline. It’s expected to spend $2.2 billion in 2021 after last year’s paltry $1.5 billion. But that’s still a far cry from the more than $6 billion a year it invested in the wake of the nationalization.
As the company looks for savings in the bond market, it’s also slashing other costs, cutting salaries and reducing its bloated workforce by 12%. It’s trying to sell stakes in some oil fields, as well as its headquarters in Buenos Aires, a sleek glass skyscraper where executives take calls looking out over the vast River Plate estuary into Uruguay.
Founded in 1922 as one of the world’s first entirely state-run oil companies, YPF was passed from nationalist governments to military dictatorships until the early 1990s, when it was sold to Madrid-based Repsol SA as part of a short-lived attempt to free up the economy. In 2012, President Cristina Fernandez de Kirchner’s leftist government expropriated 51% of the company, eventually paying Repsol $5 billion in bonds for its stake. YPF’s market value today is just $1.6 billion.
The central bank’s refusal to sell YPF the dollars it needs to pay its obligations, despite the company’s earlier efforts to refinance its short-term debt, is a bad sign for all overseas corporate bonds from Argentina, according to the financial services firm TPCG. The concern is that if the country’s flagship company isn’t eligible to buy dollars at the official exchange rate as the bank seeks to hold onto hard-currency reserves, no one else will be either.
“The central bank’s message is pretty clear,” said Santiago Barros Moss, a TPCG analyst in Buenos Aires. “There just aren’t enough dollars in Argentina for corporates right now.”
(Updates bond prices in the 11th paragraph. A previous version of this story corrected the 10th paragraph to make clear that YPF is telling investors that bonds maturing in 2021 wouldn’t be repaid if a restructuring deal fails.)
©2021 Bloomberg L.P.
Scott Squires and Jonathan Gilbert
Tue, January 19, 2021
Shale Driller Stuns Creditors as Argentina’s Dollars Dwindle
(Bloomberg) -- In the 99 years since it was founded to pump the oil fields of Patagonia, Argentine energy driller YPF SA has been whipsawed by countless booms and busts. If global oil markets weren’t collapsing, it seemed, then Argentina was mired in a debt crisis that was wreaking havoc on the whole nation’s finances.
Never, though, had the company been pushed into a large-scale default of any kind. Until, it would appear, now. Word of this came in an odd way: Officials at state-run YPF sent a press release in the dead of night laying out a plan to saddle creditors with losses in a debt exchange.
Implicit in its statement was a threat that traders immediately understood -- failure to reach a restructuring deal could lead to a flat-out suspension of debt payments -- and they began frantically unloading the shale driller’s bonds the next morning. Today, some two weeks later, the securities trade as low as 56 cents on the dollar.
Creditors, including BlackRock Inc. and Howard Marks’s Oaktree Capital Group, are gearing up for bare-knuckled negotiations just four months after ironing out a restructuring deal with the government that marked the country’s third sovereign default this century alone.
YPF’s downfall underscores just how hard the pandemic has hammered both the global oil industry and the perennially hobbled Argentine economy. Dollars are now so scarce in Buenos Aires that the central bank refused to let YPF buy the full amount it needed to pay notes coming due in March. That was the immediate cause of the restructuring announcement.
A longer view reveals a steady decline in the company’s finances since the government re-nationalized it in 2012 and forced it to swell payrolls, artificially hold down domestic fuel prices and skimp on investments, leading to four straight years of oil-and-gas output declines.
YPF must now reach a deal with creditors to get its finances in order to boost investment in the gas-rich Vaca Muerta shale formation in Patagonia.
The task is even more urgent as the South American winter approaches with YPF unable to meet domestic gas demand, meaning Argentina will have to boost imports -- and fork over precious hard currency -- in the middle of a global spike in prices.
“The central bank’s decision really put YPF between a rock and a hard place,” said Lorena Reich, a corporate-debt analyst at Lucror Analytics in Buenos Aires.
In private conversations with investors, YPF officials are portraying the deal as a voluntary exchange and are insisting that they will pay back all their bonds -- with the exception of the notes coming due in March -- whether they are tendered in the swap or not. But that’s certainly not how investors interpret the situation, and ratings companies say the proposal constitutes a distressed exchange that would be tantamount to default.
The company’s $413 million in bonds due in March tumbled 6.5 cents Tuesday, the most since September, to about 82 cents on the dollar.
Overall, YPF is seeking to restructure $6.2 billion of bonds, pushing back a total of $2.1 billion in debt payments through the end of next year so that it can invest the money in bolstering production. The deal offers investors a slight upside from current bond prices, but would stick creditors with losses of as high as 16% on a net-present-value basis, according to calculations by Portfolio Personal Inversiones, a local brokerage.
While some investors had anticipated YPF would try to refinance its short-term debt -- without imposing any losses -- the plan to restructure virtually all the company’s overseas bonds was a big surprise.
“The offer crossed the line of reason,” said Ray Zucaro, the chief investment officer at RVX Asset Management in Miami, who owns YPF bonds. “There was no reason they needed to include all the bonds when they only needed relief on the short-dated notes.”
YPF says it included all its securities in the swap to give all its bondholders a fair shot at exchanging into a new export-backed note maturing in 2026 that offers more protection than unsecured debt.
Creditors have begun to form groups to negotiate the terms of the restructuring, and while the talks haven’t begun in earnest, the company says it’s willing to negotiate. On Jan. 14, YPF amended some of the rules for its consent solicitation after investor outcry over a procedural issue.
Cash Crunch
Argentina’s cash crunch couldn’t come at a worse time for YPF, which was already facing a drop in demand because of the pandemic. The driller needs more investment to ramp up capital-intensive shale production in Vaca Muerta as aging traditional fields decline. It’s expected to spend $2.2 billion in 2021 after last year’s paltry $1.5 billion. But that’s still a far cry from the more than $6 billion a year it invested in the wake of the nationalization.
As the company looks for savings in the bond market, it’s also slashing other costs, cutting salaries and reducing its bloated workforce by 12%. It’s trying to sell stakes in some oil fields, as well as its headquarters in Buenos Aires, a sleek glass skyscraper where executives take calls looking out over the vast River Plate estuary into Uruguay.
Founded in 1922 as one of the world’s first entirely state-run oil companies, YPF was passed from nationalist governments to military dictatorships until the early 1990s, when it was sold to Madrid-based Repsol SA as part of a short-lived attempt to free up the economy. In 2012, President Cristina Fernandez de Kirchner’s leftist government expropriated 51% of the company, eventually paying Repsol $5 billion in bonds for its stake. YPF’s market value today is just $1.6 billion.
The central bank’s refusal to sell YPF the dollars it needs to pay its obligations, despite the company’s earlier efforts to refinance its short-term debt, is a bad sign for all overseas corporate bonds from Argentina, according to the financial services firm TPCG. The concern is that if the country’s flagship company isn’t eligible to buy dollars at the official exchange rate as the bank seeks to hold onto hard-currency reserves, no one else will be either.
“The central bank’s message is pretty clear,” said Santiago Barros Moss, a TPCG analyst in Buenos Aires. “There just aren’t enough dollars in Argentina for corporates right now.”
(Updates bond prices in the 11th paragraph. A previous version of this story corrected the 10th paragraph to make clear that YPF is telling investors that bonds maturing in 2021 wouldn’t be repaid if a restructuring deal fails.)
©2021 Bloomberg L.P.
The US Can Make Bitcoin Mining Greener
James Cooper
Tue, January 19, 2021
The incoming administration of Joe Biden has an opportunity to take the global lead in green mining for digital assets. It is no secret that there is a geopolitical struggle brewing over new forms of cryptocurrencies – both state-backed and private – and the best location for new capital formation and technological advancements. To win this global competition, the new U.S. government must ensure more regulatory clarity for digital assets while also ensuring that the mining process, a tremendous drain on energy resources and a contributor to global warming, is done in an environmentally sensitive way.
Some of the new administration’s leaders should work together to make policies to encourage development in this burgeoning industry. The expected ascension of Gary Gensler, a former chairman of the Commodity Futures Trading Commission, to lead the Securities and Exchange Commission augurs well for a more enlightened and proactive approach by regulators concerning digital assets. After all, he just finished teaching a course on blockchain at MIT, sees the technology as a “catalyst for change,” and is viewed as a threat to the legacy financial system. That’s all good for the disruptive financial technologies.
James Cooper is a Professor of Law and Associate Dean of Experiential Learning at California Western School of Law. He is moderating a panel for Digital Davos on Jan. 20 on ethics and technologies in developing countries.
Related: Bitcoin Is Aiding the Ransomware Industry
Also, the naming of former Secretary of State John Kerry to a cabinet-level position as Special Presidential Envoy for Climate, is a signal of the new administration’s commitment to tackling global climate change. He understands the importance of cryptocurrency. At the World Economic Forum three years ago this week, Kerry was quoted as saying cryptocurrency has “got value.” Together, these two appointees can ensure the country leads fintech development while preventing crypto mining from contributing to more greenhouse gases.
A raft of projects abroad are already primed for success in the green mining space and can act as models for the United States. In 2019, Bitfury set up mining centers in Paraguay, home to South America’s biggest hydro-electric project – the Itaipu Dam – the world’s largest generator of renewable clean energy. The government in Asunción has backed the Commons Foundation’s Golden Goose project, in its attempt to establish the region as the world’s largest crypto mining center. But there is a challenge to keep the Paraguay project itself from contributing to greenhouse gases given the intense heat that the tropical country faces year round. It would be counter-productive to use a lot of energy to cool the computers even if the energy was being produced by renewable sources.
See also: Jeff Bandman – What Crypto Can Expect From Gary Gensler at the SEC
Cost-effective mining centers based on renewable energy have also been established in Russia’s frozen lands of Siberia. The city of Norilsk is home to the mineral mining behemoth Norilsk Nickel but increasingly bitcoin mining is becoming an important economic driver. With temperatures in winter bottoming out at minus 40 degrees Celsius (which is roughly minus 40 degrees Fahrenheit), this is a perfect climate by which to keep computing machines cool. It’s a lot cooler than Paraguay for sure.
Related: Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
Nor should we forget about China, the home to over half the bitcoin miners in the world, the majority of whom are situated in Sichuan due to low energy costs, powered by hydro-electric facilities. That the area has recently suffered some of the worst flooding in 70 years, largely due to climate change, shows that irony is as much at play here as hash rates. Poolin, which controls the majority of BTC hash rate, has had trouble with consistent energy supplies and some of its mining farms have been inundated by monsoon floods. Even with the province’s vast hydro-electric capabilities, the authorities in the People’s Republic of China have generally banned the digital asset industry – shuttering mining, exchanges and industry conferences.
A more secure and geographically proximate project is rolling out near the Churchill Falls hydro-electric plant in Labrador, a remote part of Eastern Canada. Pow.re, a Montreal-based company with investors from Asia, is taking advantage of the stranded energy that NL Hydro generates. This hydro-electric facility is long past emitting mercury traces, so the project meets many environmental protection and sustainable development goals. The temperature rarely exceeds 60 degrees Fahrenheit in the summer, ensuring that the machines stay cool. The only source of waste is heat – which is a luxury in the sub-Arctic region where they are mining.
See also: State of Crypto: What the Crypto World Should Watch for in the Biden Era
The United States has much to learn from such foreign green mining projects. There are some new initiatives to encourage bitcoin mining stateside (including a new legislative bill in Kentucky to provide state tax incentives), but many of these are not green and may contribute to the earth’s warming. Coal-fired power plants supply 73% of Kentucky’s electrical generation, for example, dulling the greenness of that project. (Layer1’s mining project in Texas, by contrast, is prized for its environmental performance.)
And while bountiful and clean electricity are critical to providing hash rates that are cost effective and have little environmental impact, so are champions in major policy-making positions. The combination of Gensler and Kerry in the Biden administration can help position the United States at the forefront of green mining. President Biden promised to “build back better.” Green mining is one such way. Private companies are getting in on this opportunity too: Square Crypto recently announced a $10 million fund to promote projects that use green energy for bitcoin mining.
The U.S. government has much to gain by providing regulatory clarity for fintech and environmentally sound policies for cryptocurrency mining. If it does not, there are plenty of other countries to take the lead and profit accordingly.
James Cooper
Tue, January 19, 2021
The incoming administration of Joe Biden has an opportunity to take the global lead in green mining for digital assets. It is no secret that there is a geopolitical struggle brewing over new forms of cryptocurrencies – both state-backed and private – and the best location for new capital formation and technological advancements. To win this global competition, the new U.S. government must ensure more regulatory clarity for digital assets while also ensuring that the mining process, a tremendous drain on energy resources and a contributor to global warming, is done in an environmentally sensitive way.
Some of the new administration’s leaders should work together to make policies to encourage development in this burgeoning industry. The expected ascension of Gary Gensler, a former chairman of the Commodity Futures Trading Commission, to lead the Securities and Exchange Commission augurs well for a more enlightened and proactive approach by regulators concerning digital assets. After all, he just finished teaching a course on blockchain at MIT, sees the technology as a “catalyst for change,” and is viewed as a threat to the legacy financial system. That’s all good for the disruptive financial technologies.
James Cooper is a Professor of Law and Associate Dean of Experiential Learning at California Western School of Law. He is moderating a panel for Digital Davos on Jan. 20 on ethics and technologies in developing countries.
Related: Bitcoin Is Aiding the Ransomware Industry
Also, the naming of former Secretary of State John Kerry to a cabinet-level position as Special Presidential Envoy for Climate, is a signal of the new administration’s commitment to tackling global climate change. He understands the importance of cryptocurrency. At the World Economic Forum three years ago this week, Kerry was quoted as saying cryptocurrency has “got value.” Together, these two appointees can ensure the country leads fintech development while preventing crypto mining from contributing to more greenhouse gases.
A raft of projects abroad are already primed for success in the green mining space and can act as models for the United States. In 2019, Bitfury set up mining centers in Paraguay, home to South America’s biggest hydro-electric project – the Itaipu Dam – the world’s largest generator of renewable clean energy. The government in Asunción has backed the Commons Foundation’s Golden Goose project, in its attempt to establish the region as the world’s largest crypto mining center. But there is a challenge to keep the Paraguay project itself from contributing to greenhouse gases given the intense heat that the tropical country faces year round. It would be counter-productive to use a lot of energy to cool the computers even if the energy was being produced by renewable sources.
See also: Jeff Bandman – What Crypto Can Expect From Gary Gensler at the SEC
Cost-effective mining centers based on renewable energy have also been established in Russia’s frozen lands of Siberia. The city of Norilsk is home to the mineral mining behemoth Norilsk Nickel but increasingly bitcoin mining is becoming an important economic driver. With temperatures in winter bottoming out at minus 40 degrees Celsius (which is roughly minus 40 degrees Fahrenheit), this is a perfect climate by which to keep computing machines cool. It’s a lot cooler than Paraguay for sure.
Related: Nvidia May Restart Production of Crypto Mining GPUs if Demand Sufficient
Nor should we forget about China, the home to over half the bitcoin miners in the world, the majority of whom are situated in Sichuan due to low energy costs, powered by hydro-electric facilities. That the area has recently suffered some of the worst flooding in 70 years, largely due to climate change, shows that irony is as much at play here as hash rates. Poolin, which controls the majority of BTC hash rate, has had trouble with consistent energy supplies and some of its mining farms have been inundated by monsoon floods. Even with the province’s vast hydro-electric capabilities, the authorities in the People’s Republic of China have generally banned the digital asset industry – shuttering mining, exchanges and industry conferences.
A more secure and geographically proximate project is rolling out near the Churchill Falls hydro-electric plant in Labrador, a remote part of Eastern Canada. Pow.re, a Montreal-based company with investors from Asia, is taking advantage of the stranded energy that NL Hydro generates. This hydro-electric facility is long past emitting mercury traces, so the project meets many environmental protection and sustainable development goals. The temperature rarely exceeds 60 degrees Fahrenheit in the summer, ensuring that the machines stay cool. The only source of waste is heat – which is a luxury in the sub-Arctic region where they are mining.
See also: State of Crypto: What the Crypto World Should Watch for in the Biden Era
The United States has much to learn from such foreign green mining projects. There are some new initiatives to encourage bitcoin mining stateside (including a new legislative bill in Kentucky to provide state tax incentives), but many of these are not green and may contribute to the earth’s warming. Coal-fired power plants supply 73% of Kentucky’s electrical generation, for example, dulling the greenness of that project. (Layer1’s mining project in Texas, by contrast, is prized for its environmental performance.)
And while bountiful and clean electricity are critical to providing hash rates that are cost effective and have little environmental impact, so are champions in major policy-making positions. The combination of Gensler and Kerry in the Biden administration can help position the United States at the forefront of green mining. President Biden promised to “build back better.” Green mining is one such way. Private companies are getting in on this opportunity too: Square Crypto recently announced a $10 million fund to promote projects that use green energy for bitcoin mining.
The U.S. government has much to gain by providing regulatory clarity for fintech and environmentally sound policies for cryptocurrency mining. If it does not, there are plenty of other countries to take the lead and profit accordingly.
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