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Agreement on limited official support for coal-fired power plants

Tiskové zprávy

The Participants to the „OECD Arrangement on Officially Supported Export Credits“ have agreed to end support for unabated coal-fired power plants. The aim of this agreement is to support the efforts to address climate change. It went into effect at the beginning of November.

More specifically, the ban applies to officially supported export credits for:

  • new coal‑fired power plants without operational carbon capture, utilisation and storage facilities (CCUS); and
  • existing coal‑fired power plants, unless the purpose of the equipment supplied is pollution or CO2 abatement and such equipment does not extend the useful lifetime or capacity of the plant; or unless it is for the retrofitting of an existing coal-fired electricity generation plant to install CCUS.

The Participants to the OECD Arrangement are Australia, Canada, the European Union, Japan, Korea, New Zealand, Norway, Switzerland, Turkey, the United Kingdom, and the United States. In the Czech Republic, the restriction of official support for coal-fired power plants also applies to export credits provided by the Česká exportní banka, a.s.

Information of Czech Export Bank (CEB) Concerning Changes in Benchmark Interest Rates for USD and GBP

Prague, 4th of November 2021

Dear Clients,

We would like to inform you that LIBOR (London Interbank Offered Rate), that has been used to set interest rates on a global basis for a wide variety of financial products, including derivatives, loans, bonds and structured products, has been under review by a number of central banks and international financial regulatory authorities. Respective regulatory bodies have taken the view that these above mentioned interest rate benchmarks represent a potential systemic risk and therefore need to be replaced by new risk-free rate benchmarks.

LIBOR is scheduled to follow different paths in the future, depending on the respective currency. The British financial authority (FCA) announced on 5th of March 2021 the following cessation or loss of representativeness dates:

  • Rates of GBP LIBOR for all tenors and USD LIBOR settings 1-week and 2-month will cease to be published and lose representativeness after 31st of December 2021.
  • Remaining USD LIBOR rates will cease to be published and lose representativeness after 30th of June 2023.

Financial regulators have a strong preference for LIBOR to be replaced by rates based on overnight risk-free rates (“RFR”).

Please let us also inform you that newly originated loans in GBP and USD currency will be linked to the new risk-free rates (RFR) only. Loans signed before 31st of December 2021 have to be converted to RFR till 30th of June 2023.

The application of overnight risk-free rates (RFR) in CEB financial products:

Since the risk-free rates (RFR) are overnight rates, it will be possible to calculate the amount of interest for a given time period in the following ways:

  • in advance (at the beginning of the interest period) using the RFR Term contracts – Term SOFR provided by CME for USD and Term SONIA provided by ICE Benchmark Administration Limited for GBP. This CEB practice may change during 2022 with regards to the prevailing market practice,
  • throughout the interest period or in arrears retrospectively based on the daily published rates, i.e. the interest rate may change daily. Generally, the new rates will be applied at the day of their publication by the relevant authority.

The typical interest period will be three months. For one month interest period the simple interest calculation method shall be used, for longer interest periods the compounding interest calculation method will be used. The contracts switching from LIBOR rates to new risk-free rates (RFR) will have to be adjusted for the basis spreads that reflect the historical economic difference between the underlying rates. These spreads1 have been agreed by the regulatory authorities.

Available sources of risk-free rates for USD and GBP:

Risk-free Rate


Further information







[1] https://assets.bbhub.io/professional/sites/10/IBOR-Fallbacks-LIBOR-Cessation_Announcement_20210305.pdf

Dear clients, in case of any further questions concerning this matter, please do not hesitate to contact us.

Česká exportní banka, a.s.
Vodičkova 34
111 21 Prague 1
Czech Republic

Tel.: +420 222 841 100
E-mail: ceb@ceb.cz


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