The Equator Principles

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Transparency and Accountability

Policy, Legal and Contractual Framework

Sector Organization and Institutions

Fiscal Design and Administration

Revenue Management and Distribution

Sustainable Development

The Equator Principles

The extractive industry is capital-intensive by nature. Due to this, extractive industry companies do often resort to financial institutions to finance the development of a natural resource project. Project financing - a method of funding in which the lender looks primarily to the revenues generated by a single project both as the source of repayment and as security for the exposure - plays an important role in financing development throughout the world.

However, project financiers sometimes encounter social and environmental issues that are both complex and challenging, particularly with respect to projects in the emerging markets. The Equator Principles constitute a financial industry benchmark for determining, assessing and managing social and environmental risk in project financing. They are a set of ten “precepts” which serve as a common baseline and framework for each financial institution in its project finance activities.

Many financial entities - The Equator Principles Financial Institutions - have consequently adopted these Principles in order to ensure that the projects are developed in a manner that is socially responsible and reflect sound environmental management practices.

Information on how to adopt the Principles is available on the website below. Also available on it are the reporting mechanisms on the project financed and the best practices assessing and managing social and environmental risk.

 

Click here to visit the 'The Equator Principles' website

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