Equator Principles

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A risk management framework applied by a number of international financial institutions for certain project finance advisory services, project finance, project-related corporate loans, bridge loans, and project-related acquisition finance and refinance to ensure that projects are developed in a manner compliant with international standards on environmental and social issues.

The fourth version of the Equator Principles became effective in June 2020. Large infrastructure and industrial Projects can have adverse impacts on people and on the environment. The Equator Principles (EP) are intended to serve as a common baseline and risk management framework for financial institutions to identify, assess and manage environmental and social risks when financing projects.

The EP apply globally, to all industry sectors and to five financial products:

  1. Project Finance Advisory Services
  2. Project Finance
  3. Project-Related Corporate Loans
  4. Bridge Loans, and
  5. Project-Related Refinance and Project-Related Acquisition Finance.

Equator Principles Financial Institutions (EPFIs) implement the 10 EP through their internal environmental and social risk management policies, procedures and standards in order to comply with the EP.

EPFIs may (at their own discretion) choose to utilise the EP for additional financial products outside the scope of the EP.

Links

Equator Principles website