Equator principles 4 enter into force - how does this impact EPFIs and others?

Posted in Financial institutions Infrastructure, mining and commodities Risk advisory

Version 4 of the Equator Principles (EP4) will come into force on 1 October 2020. EP4 heralds several changes that will impact lenders and borrowers involved in project finance and project-based corporate finance loans.

The Equator Principles in brief…

The Equator Principles (EPs) provide a management framework to gauge sustainability risk for projects. To date, been the main adopters of that have EPs have been financial institutions (EPFIs) involved in project finance. In practice, however, the EPs are becoming much more widely used in the sector. The EPs framework provides a methodology to identify, evaluate and manage the environmental and social risks and impacts of projects both prior to entering into project financing documentation as well as throughout the project lifetime.

The global framework is applicable across all industry sectors and applies to certain financial products (subject to value thresholds) offered by EPFIs. Currently the EPs have been adopted by over 100 financial institutions across 38 countries.

To discover more about the Equator Principles and how they are used in practice, read our latest article here.

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