Sustainable Financing: The Equator Principles and the Financing of Water and Energy Resource Projects

Sustainable Financing The Equator Principles and the Financing of Water and Energy Resource Projects Ian Mathews Regional Head, Project & Structured Finance Australia and New Zealand Banking Group Ltd

TABLE OF CONTENTS ,[object Object],[object Object],[object Object],[object Object],[object Object]

What is meant by “Sustainable Financing” ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why is Sustainable Financing relevant to Governments – Strategies for Comprehensive Energy Policies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Estimated All-In Cost of New Built Power Stations* Sources: Numerous, including World Bank, Asian Development Bank, OECD Government statistics * Based upon expected capital expenditure costs, expected capacity factors and current fuel costs Average all-in cost for a new power station

Why is Sustainable Financing relevant to Governments and Investors – the Role of Civil Society and Financiers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Why is Sustainable Financing relevant to Financiers – the Management of Risk ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Applicable Standards for Sustainable Financing - The Equator Principles ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What are the Standards and how are they Measured ? Each Bank must provide annual updates of its own compliance with the Equator Principles EP10: Public Reporting For all Category A and most Category B, an independent third party review is required to verify the Action Plan and other obligations for the Banks EP9: Independent Monitoring and Reporting The Borrower will covenant (a) to comply with all local social and environmental laws, permits and standards, (b) to implement the Action Plan, (c) to provide periodic reports to the Banks confirming compliance with required standard, and (d) to decommission the project (where applicable) in accordance with a decommissioning plan EP8: Covenants For all Category A and most Category B, an independent third party review is required for the Assessment, Action Plan and other documentation EP7: Independent Review For all Category A and most Category B, procedures to be implemented to allow affected stakeholders the ability to raise and resolve issues of concern EP6: Grievance Mechanism For all Category A and most Category B, timely consultation of the non-technical findings is to be made available in the local language to encourage early dialogue with stakeholders EP5: Consultation and Disclosure For most countries, for all Category A and B projects, the Borrower must complete an Action Plan to describe, prioritise and implement mitigation measures, corrective actions for any impacts identified in the Social and Environmental Assessment EP4: Action Plan / Management System For most countries, the Assessment is referenced to the IFC Performance Standards EP3: Applicable Standards For Category A and B projects, the Borrower must conduct a Social and Environmental Assessment, prepared by the Borrower or by suitably skilled independent third parties, to identify any impacts caused by the project EP2: Social and Environmental Assessment ,[object Object],[object Object],[object Object],[object Object],EP1: Review & Categorisation Statement of Principles Equator Principle

How are the Standards Implemented ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sustainable Financing - the Implications of Equator Principles for Stakeholders ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Concluding Comments ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Sustainable Financing: The Equator Principles and the Financing of Water and Energy Resource Projects

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Sustainable Financing: The Equator Principles and the Financing of Water and Energy Resource Projects

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