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Equator Principles

The Equator Principles (EP) are a voluntary set of standards adopted by financial institutions for determining, assessing and managing environmental and social risks in project-related transactions. NatWest Group has been a member since 2003.

All transactions that fall within the scope of EP undergo an initial environmental and social risk screening (using a questionnaire). Typically for project finance deals, a suitably qualified technical advisor is engaged, who provides an opinion on potential environmental and social impacts of the project and compliance with the EP.

Additionally, such transactions are subject to enhanced due diligence by an ESE advisory team. This includes a review of the project-related transaction for compliance with the EP. The end result is documented and forms part of the credit application pack submitted for approval. The EP use a scale of categorisation – A to C – to determine the scale of environmental and social impacts, with Category A being projects with the highest impacts and Category C, the lowest. Depending on the risk category, the prospective financing may be subject to a further and separate review by a Reputational Risk Committee.

The requirements of the EP are embedded in the bank’s ESE Risk Policy.

 

Summary of 2019 EP deals

The reporting period for data and implementation is from 1 January 2019 to 31 December 2019 (2018 data is provided for comparison).

During this period, ten Project Finance transactions to which we had applied the EP reached financial close. Six of the deals were located in Europe, and four deals were located in the US. In comparison, the total number of project-related transactions financed in 2018 was 6, and all were located in Europe.

2019 and 2018 Project Finance categorised against Equator Principles by industry sector (there were no Project related Corporate Loans)

2019 and 2018 Project Finance loans categorised against Equator Principles by Region

2019 EPIII Project Finance transactions

Project

Category

Sector

Region

Designated Country?

Independent Review

1

B

Power (waste to energy)

Europe, Middle East & Africa

Yes

Yes

2

B

Power (hydroelectric) 

Europe, Middle East & Africa

Yes

Yes

3

B

Power (wind)

Europe, Middle East & Africa

Yes

Yes

4

B

Power (solar)

Americas

Yes

Yes

5

C

Power (hydroelectric)

Europe, Middle East & Africa

Yes

Yes

6

B

Power (wind)

Europe, Middle East & Africa

Yes

Yes

7

B

Power (solar)

Americas

Yes

Yes

8

B

Power (solar)

Americas

Yes

Yes

9

B

Power (solar)

Americas

Yes

Yes

10

B

Power (solar)

Europe, Middle East & Africa

Yes

Yes