Equator Principles

The Equator Principles (English Equator Principles ) are a voluntary set of rules for banks to comply with environmental and social standards in the field of project financing. The name, Equator Principles ' symbolizes the global claim of the guidelines.

The participating institutions undertake to finance only those projects where the borrower meet the environmental and social criteria of the principles.

The framework is based on the environmental standards of the World Bank and the social standards of the International Finance Corporation (IFC ), a subsidiary of the World Bank, and applies to projects from a financing volume of an U.S. $ 10 million.

While the Equator Principles are actually limited to project financing, but they have the development of responsible environmental and social standards promoted in other areas of the financial and banking sector.


The spark of these guidelines provided a declaration of non-governmental organizations, which was launched in January 2003 as part of the Public Eye in Davos. On this basis, were developed in collaboration with the IFC, the Equator Principles in June 2003 by ten global banks ( ABN Amro, Barclays, Citigroup, Credit Lyonnais, Credit Suisse, HypoVereinsbank, Rabobank, Royal Bank of Scotland, WestLB Westpac Banking Corporation ) signed.

The principles were revised in June 2006 to take account of the lessons learned so far and make further improvements; so the project relevant threshold as the most important changes were reduced to ten million U.S. dollars, expanded the scope on consultancy work in the context of project financing, and the environmental assessment societal aspects complement ( Equator Principles II).

In 2007, documents, according to the magazine " Infrastructure Journal " of the total 74.6 billion U.S. dollars, which were officially awarded as loans to emerging countries, 52.9 billion U.S. dollars to the Equator Principles. This corresponds to a share of around 71 % of the total allocated for project finance in emerging markets funds.

Until today ( 12 February 2009), the principles of a total of 66 banks from 26 countries have been adopted.

The principles

The Equator Principles require that participating financial institutions provide project financing only under the following conditions:


The principles apply to all new project financings with a volume of 10 million U.S. dollars or more in all industries worldwide.

Principle 1: Review and Categorization

The dangers posed by the project in the environmental and social fields, classified by the participating financial institution in accordance with the selection criteria of the IFC in one of three categories, depending on the type, location, appreciable and scale of the project and the nature and scope of its potential environmental and social effects.

Principle 2: Social and Environmental Impact Assessment

For all projects in categories A and B is a Social and Environmental Assessment (SEA ) is required to determine the environmental and social impacts and risks of the project and determine whether the laws of each country and the other policies of the World Bank and IFC met. The SEA should also propose mitigation and management measures that the nature and extent of the proposed project are appropriate.

Principle 3: Applicable Social and Environmental Standards

For projects outside the high-income OECD countries, the review of the applicable IFC Performance Standards and the industry-specific environmental, health and safety guidelines (" IFC EHS Guidelines " ) is supported. The standards and guidelines to cover sensitive issues such as the relocation of people about the construction of dams and the use of hazardous substances such as cyanide in gold mining. Also among the criteria of protection of human health, cultural property and endangered species and the effects on the local population.

Since the legal requirements in high-income OECD countries usually meet or exceed these requirements of the above standards, here is a successful passage through the national review process as a permitted variant to comply with the following principles 4, 5 and 6 considered.

Principle 4: Environmental Management Plan

For all projects in Category A ( and possibly the category B) the borrower is an environmental management plan must be based on the SUP create (UMP ), and describe in detail how the identified environmental and social risks mitigated, to be monitored and managed. And he shall set up a management system that the impacts, risks and corrective measures of the project controls so that the relevant laws and regulations of the host country are met.

Principle 5: Consultation and Disclosure

For all projects in Category A ( and possibly the category B) must be demonstrated to the lenders in a satisfactory manner, that the borrower a " structured and culturally appropriate " consultation with stakeholders, including indigenous groups and local NGOs, has conducted. The SEA ( or summary ) of the public for a reasonable minimum period in the / official language ( s) must be made ​​available; UMP in the consultations must be taken into account.

Principle 6: complaints mechanism

For all projects in Category A ( and possibly the category B) the borrower must, adapted to the risks and negative impacts of the project, establish a grievance mechanism as part of the management system.

Principle 7: Independent review

For all projects in Category A ( and possibly the category B) has an independent expert, the social and environmental impact assessment, review the environmental management plan and the documents to the consultation process.

Principle 8: covenants

For all projects in categories A and B, the borrower in the loan agreement must undertake to comply with all relevant social and environmental laws of the host country as well as the environmental management plan, among other things; the lending bank periodically to report, and ( where applicable ) the facilities created by the loan according to the agreed decommissioning plan to put out of operation.

Principle 9: Independent Monitoring and Reporting

For all projects in Category A ( and possibly the Category B ) should the borrower during the term of the loan appoint an independent expert who reports to the lending bank regarding the monitoring report.

Principle 10: Reporting of participating financial institution

Each to the Equator Principles compulsory financial institution reported at least once per year publicly about the experience and implementation processes in the context of the principles with regard to the applicable confidentiality provisions.


The Equator Principles are considered internationally accepted standard for project finance. Nevertheless, they are not always fully considered, as for example non- Equator Banks execute the transaction or Equator banks are switched on too late, which means that the standards are only partially implemented. NGOs such as the network Banktrack criticize further, that the implementation of the principles in the banks generally does not go beyond a mediocre commitment, and they complain that, despite having signed the voluntary agreement still controversial projects of participating banks will be financed. Is further criticized the fact that no legally binding commitments made ​​to comply with the principles, and that the principles apply strictly only for project financing.