Linklaters Comments on the Equator Principles

London - 23 July 2003

The Equator Principles – protecting green shoots

The recent launch of the “Equator Principles” casts a fresh light on the environmental and social impacts of project financing, particularly in the emerging markets. The banks who have adopted the “Equator Principles” aim to address environmental and social issues in their review of project proposals and to require sponsor compliance with environmental and social policies that are based on World Bank/IFC requirements

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RBC Financial Group Adopts Equator Principles

Toronto - 21 July 2003

RBC Financial Group today became the first Canadian financial institution to adopt the “Equator Principles,” a voluntary set of guidelines to manage social and environmental issues related to large-scale project financing in developing countries. These principles will be applied globally to project financings in all industry sectors, including mining, oil and gas, and forestry.

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BG Group Endorses the Equator Principles

Reading, UK - 2 July 2003 - GB Group

BG Group of the UK, a leading sponsor of projects, has endorsed the adoption of Equator Principles by banks. Craig Cowley, Head of Structured Finance of BG Group, in a letter to the adopting banks, said that BG Group believes that "the Principles will make a valuable contribution in encouraging good quality environmental and social management of projects." He also said that BG Group welcomes "financial institutions adhering to a common standard in respect of environmental and social issues when providing finance." 


ING Group Adopts the Equator Principles

Amsterdam - 23 June 2003

ING Groep NV of the Netherlands has announced its adoption of the Equator Principles. This brings the number of leading project finance banks which have adopted the Principles to eleven. ING said that its adoption of the Equator Principles "means that ING will comply with the sustainability regulations for financing various large-scale projects in developing countries as set by the International Finance Corporation."


Equator Principles – New Environmental and Social Guidelines for Project Finance Transactions

New York - 18 June 2003 and London - June 2003

Two prominent project finance law firms, Sullivan & Cromwell in the US, and Norton Rose in the UK, have issued commentary on the Equator Principles to their clients. In its letter to clients, Sullivan & Cromwell said that the Equator Principles represent a step towards the adoption of IFC's environmental standards "even where financing is expected to come primarily from private sources of capital. Sponsors should continue to plan larger projects, especially in low- and middle-income countries, with a view towards adopting these policies and procedures." In assessing the implications of the Equator Principles for lenders, Norton Rose recommends that "lenders should from now on include specific reference to the Equator Principles when negotiating term sheets." In assessing their impact on borrowers, Norton Rose commented that "in many instances the application of the Equator Principles will not significantly increase the compliance burden faced by project sponsors. However, the Equator Principles will impose additional burdens in some areas," particularly in the emerging markets. "The guidelines are significant in that they impose requirements in relation to the social implications of projects."

Full text of Sullivan & Cromwell's letter (pdf - 109k)

Full text of Norton Rose's letter (pdf - 138k)


Leading Banks Announce Adoption of Equator Principles

4 June 2003

Ten leading banks from seven countries today announced the adoption of the "Equator Principles," a set of guidelines developed by the banks for managing social and environmental issues related to the financing of development projects. The banks will apply the principles globally and to project financings in all industry sectors, including mining, oil and gas, and forestry.

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