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IDB approves loan of $300 million to strengthen Ecuador's electricity grid
The Inter-American Development Bank approved a loan of $300 million to assist Ecuador in strengthening its electrical system. This was announced by the Andean country's Finance Ministry on Wednesday. The IDB Group has launched the Amazonia Siempre Initiative, which focuses on sustainable development, conservation of forests and improvement of quality of life. The funding includes $270m in IDB Ordinary Capital, with a term of 22.5 years and an 8-year grace period. * The Clean Technology Fund will provide an additional $30 million at concessional rates with a 1.19% rate of interest over 20 years. * Over 700 km of transmission line will be upgraded to advanced conductors in order to increase system capability and facilitate the integration of renewable generation. Project priorities include expanding access to electricity in the Amazon. By 2031, an estimated 5,600 rural households and urban marginal households are expected to be connected to the national grid. * The funds will be used to increase renewable energy production and improve transmission infrastructure.
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Source: MD-11 grounding following UPS crash likely to end by 2026.
David Shepardson and Allison Lampert Source: The grounding of MD-11 aircraft after the fiery crash of one plane this month is not likely to end until 2026. This will drive industry demand for alternative solutions as peak delivery season begins this week. Boeing and the Federal Aviation Administration must complete testing following the November 4, 2014 crash of an UPS MD-11 jet in Louisville, Kentucky that resulted in the deaths of 14 people before they can agree on the inspection criteria for ungrounding the planes. The source, who spoke on condition of anonymity, stated that the FAA had grounded the jets just days after they crashed. Inspection guidelines would allow them to fly again next year. The latest sign that the air cargo workhorses of the industry will remain grounded for longer than expected is the source who spoke about the private matter under condition of anonymity. UPS (UPS.N), the U.S. parcel giant, said that it was leasing more planes than usual. FedEx, its rival, said it was using spare aircraft to "leverage" opportunities for chartering planes. UPS and FedEx have a combined fleet of over 100 planes, including 50 MD-11 jets. While air cargo demand will only increase slightly over the next year, delivery companies can expect to see their average daily package volume more than double during the holidays. In general, inspections of planes are expected to be completed earlier. FedEx CFO John Dietrich said at a conference on November 11, that the inspections of their operating fleet of MD-11 aircraft would begin in the next few days. In a letter, an executive of U.S. cargo airline Western Global Airlines stated that it would be forced to lay off pilots as it anticipated the groundeding of the model, which makes up the majority of its fleet, to only last a short time. Nik Fialka, a pilot and podcaster, shared the letter on social media Monday. The letter stated that Boeing had advised "more and highly intrusive inspections as well as repairs, and part replacements will be required." Western Global did not respond to a comment request. Its website lists FedEx, UPS, and other clients. Boeing's spokesperson confirmed that its team provides technical and instructional support to operators. The U.S. aircraft manufacturer acquired the MD-11 programme through its 1997 merger McDonnell Douglas. The chair of the National Transportation Safety Board (NTSB), which is leading an investigation into the UPS accident, said last week that there is still a lot to be done. Jennifer Homendy, Chair of NTSB, said that the NTSB has a number of pieces in its lab and is continuing to work on them.
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Urals differentials unchanged during quiet trade
The Russian Urals crude differentials compared to Brent dated were unchanged on December trading volumes as Western sanctions pressure and price discussions between sellers and purchasers slowed the trading, traders reported. Traders said that market participants were adapting to the new reality of the market after the latest U.S. sanctions and EU sanctions against Russian oil. Three industry sources who have direct knowledge of this matter say that a Western-sanctioned ship with Russian oil bound for Indian Oil Corp had its cargo discharge delayed in a port in east India because of a delay in the online verification of insurance coverage provided by a Russian company. Three industry sources with direct knowledge of the matter said that a vessel sanctioned by Western countries and carrying Russian oil bound for Indian Oil Corp had its discharge delayed at a port in eastern India due to a delay in online verification of insurance cover provided by a Russian insurer. PLATTS WINDOW Traders reported that no bids or offers for Urals, Azeri BTC, and CPC Blend were made on February 2. Peter Szijjarto, Hungary's foreign minister, said that the MOL oil and gas company will increase its crude oil and fuel supplies to Serbia following the U.S. sanctioned cutoff of supplies to NIS (Russian-owned refinery) due to U.S. restrictions. Richard Chang (Reporting and Editing)
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Brazil's Finance Minister does not expect the government to challenge the bill on special pension
Fernando Haddad, Brazilian Finance Minister, said that he did not think the government would challenge in court the Senate-approved legislation to set up special retirement rules for health agents working within the community. He also argued that the measure was not a source of mandatory revenue. Haddad, in an interview with GloboNews said that it was possible to create fiscal room for measures proposed by Congress. However, he cautioned that they must be discussed before. * "Congress is free to make any claim it wants, but must indicate where the funding comes from," he said. "You must create fiscal room." The Brazilian Senate has approved a bill establishing special retirement conditions for community healthcare agents. This legislation has raised concerns about its fiscal impact. * The Lower House of Brazil still has to approve the bill. Rogerio Ceon, the Brazilian Treasury Chief, later said that the government has not yet received an official estimate of the bill's budget impact. Potential Rescue Plan for CORREIOS Haddad stated that the government has not discussed a possible privatization of Brazil’s state-run Correios postal service. He said that a rescue plan, sponsored by Treasury, would only be implemented after the creation of an "consistent and comprehensive" restructuring plan for Correios. * The Minister said that he only received a clear picture of Correios’s worsening financial problems "very recently". Dario Durigan, the Deputy Minister of Finance, was in attendance on Monday. You can also recognize this by The government's budget for this year has been affected by the "poor" performance of the postal service.
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Petrobras investment will drop as Lula's first budget is cut.
Three sources familiar with the matter said that Petrobras, Brazil's state-owned oil company, will cut its five-year investment program for the first time under Luiz Inacio Lula Da Silva's administration due to lower oil costs. Sources said that the new plan will be announced on Thursday and is expected to have capital expenditures about 2% less than the previous plan of $111 billion for the period 2025-2029, dropping to approximately $109 billion. The board is yet to make a final decision. This is the first divestment since the Petrobras plan from the period 2021-2025 under the former president Jair Bolsonaro, when Petrobras went through a series or divestments. Lula, since he took office, has encouraged the oil company to invest more to help boost the economy of the country. The leftist leader will seek to run for a non-consecutive fourth term next year. The company informed analysts during a earnings call that there was little room for maneuvering in 2026 as the majority of planned investments had already been contracted. Petrobras' current capital budget for the next year is around $19.6 Billion. Brent crude oil traded at $62,35 per barrel on Wednesday. This was lower than the $70.85 average for the first nine month of the year, which is already a 14.4% decline compared to 2024. ASSOMALIZING PRICES LOWER A source told us that Petrobras must adapt to the current oil price environment and do more with the same amount of money. The company should not increase its debt nor change its dividend policy, she added. Sources say that the plan is to increase production and refinery by increasing the capacity of existing units. The company will map out platforms which could boost output, and it plans a revamp of almost all its refineries. The company is searching for platforms that can follow the Almirante Tamandare flotating production unit. This floating unit was designed to produce 225,000 barrels of oil per day but achieved a record 270,000 barrels of oil per day in October. Petrobras could reevaluate projects in order to reduce costs and negotiate with suppliers. This was the claim of a source. (Reporting and writing by Rodrigo Viga Gaier, Fabio Teixeira, Editing by Bill Berkrot).
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Electric cars will be subject to UK pay-per-mile tax
In her budget statement on Wednesday, Finance Minister Rachel Reeves announced that Britain would levy a per-mile tax on plug-in and electric hybrid vehicles starting in April 2028. This will offset the revenue lost from fuel duties as more drivers opt for cleaner cars. The charge for electric cars will be 3 pence per kilometer and for plug-in hybrids 1.5 pence, with a total annual amount payable along with the car tax. Reeves stated that "because all cars contribute to the wear and tear of our roads, I'll ensure that drivers pay taxes based on how much they drive rather than just what type of vehicle they own." New Zealand and Iceland both introduced road pricing on EVs. In the first case, demand dropped, whereas in the second, it was maintained. A driver who drives 8,000 miles per year in Britain will pay around 240 pounds. This is about half of the fuel duty that a driver driving a petrol vehicle or diesel pays. Tax expected to bring in 1.1 billion pounds in first year The Office for Budget Responsibility (OBR), which published the details of the budget unexpectedly early, stated that it was expected to generate about 1.1 billion pound in the first year. This figure would rise to 1.9 billion pound by 2030-31. The new charges are intended to offset the estimated 0.6% of GDP that will be lost in taxes due to the switch to electric vehicles by 2050. The Society of Motor Manufacturers and Traders, a trade association for the auto industry, said that the new tax "would suppress demand, discourage consumers and make ever-tougher targets more expensive and difficult to achieve". It said that "no mitigation measures, such as additional grant funding, can offset the message sent to consumers by this measure." In order to achieve net-zero emissions of greenhouse gases by 2050 in Britain, the country wants to phase out new petrol and diesel vehicles by 2030. The demand for electric vehicles has stagnated, with consumers citing the high upfront costs of buying an electric car as their main obstacle. In July, the government announced that it would give discounts of up to 3,750 pounds for electric cars with a price below 37,000 pounds. $1 = 0.7581 pounds (Reporting and editing by William James, Ed Osmond and Catarina Sandle)
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Berlin wants to buy TenneT Germany in early 2026 according to a letter from the ministry
According to a letter sent by the German economy ministry, the German government hopes to sign a deal early next year for the purchase of a 25,1% stake in TenneT's local division. In the letter sent to the federal finance commission, Berlin says it has allocated 5.8 billion euro ($6.7 billion) to purchase the aircraft and to pay for future payments as part of the capital increases between 2026 and 2029. The Dutch government agreed in September to sell up to 9.5 billion euro of TenneT Germany shares to a consortium of investors consisting of Singapore's sovereign fund GIC, pension fund manager APG and Norges Bank Investment Management. Berlin is considering purchasing a 25,1% stake in order to maintain greater control over vital energy infrastructure assets. Germany holds minority stakes of TransnetBW, 50Hertz and other power grids via the state-backed lender KfW. KfW is expected to purchase TenneT Germany. The letter from November 13 stated that the aim was to complete the transaction as quickly as possible while exercising due diligence. It added that the goal would be to sign the deal by 2026's first quarter and to close it in the second quarter. A source with knowledge of the situation said that a deal would likely be signed in January. In the letter, it was stated that there are no current plans to purchase a stake in Amprion - Germany's fourth high voltage power transmission network. The German economy ministry refused to comment on this letter. It was first reported in the trade publication Tagesspiegel Background. Reporting by Holger Hanen and Christoph Steitz, Editing by Bill Berkrot
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Trafigura accuses Gupta weaving an incoherent web for $600 million nickel scam
Lawyers at Trafigura said that Prateek Gupta’s claims that the group devised a secret plan to exchange expensive nickel for low value metals are full of contradictions. The Indian businessman was giving evidence in an ongoing fraud case. Trafigura, a Swiss commodity trader, sued Gupta two years ago. It claimed that he was behind a scam where he and his firms agreed to deliver pure nickel but instead delivered scrap steel or other metals. Gupta countered by claiming that Trafigura staff themselves designed the scheme at the heart of the case. Trafigura, however, has denied this claim repeatedly. Gupta, who was testifying for the very first time in court, said that he thought the Trafigura executives had approved the scheme of substitution. Nathan Pillow, Trafigura's lawyer at the London High Court said: "You lie." Why would it be necessary to keep it secret if the decision was made at the highest level? Gupta said that a small group would be discussing the operation of the scheme. He was testifying remotely, from Dubai, where he resides. Pillow asked Gupta why he said that the material to replace nickel should be stainless steel. He also suggested including stainless, which is not similar to nickel. Pillow told Pillow, "The story that you have given is nonsensical and incoherent." Gupta stated, "I just followed the instructions (from Trafigura)." Pillow replied, "You can't tell the truth and say that none of this happened." TRAFIGURA ALLEGES HISTORY FRAUDULENT ACTIVITY Trafigura's lawyers had earlier accused Gupta that he had been involved in fraudulent deals before the alleged Trafigura fraud. Gupta admitted that he was under investigation in India for fraud, but denied all allegations. Pillow cited other fraud cases in which low-value metals were substituted with nickel, but Gupta claimed he wasn't aware of the practice. Other fraud cases included commodity broker Sucden Financial Ltd, and U.S. Trading House Kataman Metals LLC. Pillow said to Gupta, "It's a fact that you are an expert in dealing with fraudulent bills of Lading." Gupta, a member of Gupta’s UD Group in India, is being investigated for bank fraud, he confirmed. The investigation is in relation to Ushdev International Ltd. Trafigura made its first metals deals with Gupta, in 2014, with Ushdev. Ushdev later experienced financial problems, declared bankruptcy in 2018, and is now under the control of insolvency professionals. Trading with an aggressive approach Gupta countered the claim that Trafigura staff devised a secret plan, stating he was told in 2019 to dramatically increase nickel trading by Sokratis oikonomou, then Trafigura's head nickel trader. Gupta stated in a court filing that "Oikonomou's trading approach and outlook was aggressive and he wanted to expand Trafigura nickel trading operations to a dominant position in the market." Oikonomou denies he is involved in the fraud. He also says that the increased trading volume with Gupta was modest when compared to Trafigura nickel's overall operations. Trafigura terminated Oikonomou’s employment in January of 2023. Harshdeep Bhattia, a Trafigura trader based in India, told Gupta that Trafigura was looking to increase trade volume to 50,000 tons of nickel per year, which is about three times the previous amount. Bhatia did not reply to an email request for comments. He no longer works at Trafigura. Gupta stated that the large amount of pure nickel at the time was worth $625 million and would prove difficult to obtain. It could also be problematic for credit insurance limits. (Reporting and editing by Jan Harvey; Eric Onstad)
In China's worst rail crash in over a ten-year period, a train runs down and kills 11.
Officials in Kunming, a city in southwest China, said that a train hit a group railway workers, killing eleven and injuring another two. This is the deadliest rail crash in over a decade.
Officials said that the train was testing equipment for earthquake detection when it hit workers at the Luoyang Town Railway Station.
In a press release, the station in Yunnan Province has resumed its normal operations. The cause of the accident will be investigated.
China has the largest rail network in the world, covering more than 100,000 km and making billions of trips every year.
Although praised for efficiency, the system has been scrutinized after several high profile incidents. One such incident was a 2011 crash that left 40 dead and 200 injured in Zhejiang, a province located in eastern China.
In 2021, nine people were killed when a train from the northwest province of Gansu hit workers working on a section the Lanzhou-Xinjiang rail line. (Reporting and editing by Christian Schmollinger, Clarence Fernandez and Shi Bu)
(source: Reuters)