The Equator Principles (EPs) (last version III) is a risk management framework, adopted by financial institutions, for determining, assessing and managing environmental and social risk in projects and is primarily intended to provide a minimum standard for due diligence to support responsible risk decision-making.
The EPs apply globally, to all industry sectors and to four financial products 1) Project Finance Advisory Services 2) Project Finance 3) Project-Related Corporate Loans and 4) Bridge Loans. The relevant thresholds and criteria for application is described in detail in the Scope section of the EPs.
Currently 91 Equator Principles Financial Institutions (EPFIs) in 37 countries have officially adopted the EPs, covering over 70 percent of international Project Finance debt in emerging markets.
EPFIs commit to implementing the EPs in their internal environmental and social policies, procedures and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the EPs. Is mandatory for all new transactions from 1 January 2014.
This is the statement of the 10 PRs:
Principle 1: Review and Categorization.
Principle 2: Environmental and Social Assessment.
Principle 3: Applicable Environmental and Social Standards.
Principle 4: Environmental and Social Management System and Equator Principles Action Plan.
Principle 5: Stakeholder Engagement.
Principle 6: Grievance Mechanism.
Principle 7: Independent Review.
Principle 8: Covenants.
Principle 9: Independent Monitoring and Reporting.
Principle 10: Reporting and Transparency.
Experience:
1. Negotiation with the Environmental and Social Risk Management Division of the group of banks led by Citibank of New York, to deal with the $ 2’000 million consortium credit for KIA Motors de Mexico (KMM) in 2015, which was held back by failure to comply with the Equator Principles!
2. Negotiation, contracting and development, in coordination with the same Management of Environmental and Social Risk Management, of the Environmental and Social Management System (SGAS) of KIA Motors Mexico (KMM) in 2015, delivering the bilingual document.
3. Negotiation, contracting and development, in coordination with the same Directorate of Environmental and Social Risk Management, of the Environmental and Social Management System (SGAS) of MOBIS de México (MMX) in 2015, delivering the bilingual document.
