UKEF's implementation of the Equator Principles (1 April 2023 to 31 December 2023)
Published 25 June 2024
© Crown copyright 2024
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/ukefs-implementation-of-the-equator-principles-1-april-2023-to-31-december-2023/ukefs-implementation-of-the-equator-principles-1-april-2023-to-31-december-2023
1. Background
UK Export Finance (UKEF) adopted the Equator Principles (EPs) on 31 March 2016, joining what now comprises 128 other banks and Export Credit Agencies (EP Financial Institutions or EPFIs) in applying this global guidance for environmental, social, and human rights (ESHR) risk management when financing projects.
During the reporting period 1 April 2023 to 31 December 2023, UKEF contributed to the planning and management of the mid-year workshop and celebration event that was held in London to mark 20 years of the Equator Principles. We were nominated and subsequently re-elected to the Steering Committee for a further term in the role of Management Support. We also attended the Annual Meeting in Washington DC in November 2023 where we chaired and participated in a panel session (along with two other EPFIs) on our approach to the implementation and resourcing of the Equator Principles.
UKEF has also contributed extensively to OECD E&S Practitioner meetings, actively seeking to align these with the Equator Principles and acting as a bridge between the two communities.
UKEF continues to follow the OECD Recommendation on Common Approaches for Officially Supported Export Credits and Environmental and Social Due Diligence (OECD Common Approaches), currently dated 25 March 2024, which applies alongside the Equator Principles as outlined in the Policy and Practice on Environmental, Social and Human Rights due diligence and monitoring (ESHR Policy).
This reporting of implementation of the Equator Principles forms part of UKEF’s obligations under Equator Principle 10 (Reporting and Transparency) and as articulated in Annex B of the Equator Principles.
2. Projects supported within the scope of the Equator Principles
Between 1 April 2023 and 31 December 2023, UKEF has reached financial close on 7 transactions that fell within the scope of the Equator Principles. These are reported in Table 1 (Project Related Corporate Loans) and Table 2 (Project Finance).
2.1 Table 1
| Financial product | Transaction name | Category | Sector | Region | EP Country Designation | Has an independent review taken place? |
|---|---|---|---|---|---|---|
| Project Related Corporate Loan | Propav Construction of 3 roads | A | Infrastructure | Europe, Middle East and Africa | Non-designated (United Republic of Tanzania) | Yes |
| Project Related Corporate Loan | Propav Pemba Airport expansion | A | Infrastructure | Europe, Middle East and Africa | Non-designated (United Republic of Tanzania) | Yes |
| Project Related Corporate Loan | Dogus Yerköy-Kayseri High Speed Rail | A | Infrastructure | Europe, Middle East and Africa | Non-designated (Turkey) | Yes |
| Project Related Corporate Loan | Al Hilla Sewage Project | B | Construction | Asia Pacific | Non-designated (Iraq) | Yes |
| Project Related Corporate Loan | ASGC Benguela Infrastructure Project | B | Infrastructure | Europe, Middle East & Africa | Non-designated (Angola) | No |
| Project Related Corporate Loan | EDG SeAH Steel Monopile Factory Investment | B | Renewable Energy | Europe, Middle East & Africa | Designated (UK) | No |
2.2 Table 2
| Financial product | Transaction name | Category | Sector | Region | EP Country Designation | Has an independent review taken place? |
|---|---|---|---|---|---|---|
| Project Finance | Hai Long Offshore Wind Project | A | Renewable Energy | Asia Pacific | Non-designated (Taiwan) | Yes |
UKEF has not reached financial close on any Project Finance Advisory Services, or commenced support for Bridge Loans that fall under the Equator Principles during the reporting period.
3. Implementation of the Equator Principles
UKEF’s ESHR Policy sets out how UKEF implements the Equator Principles alongside the OECD Common Approaches during pre-issue stages (scoping, screening, and due diligence review), which satisfies EPs 1 – 8, and for post-issue monitoring, to satisfy EP 9. UKEF published a Note of Human Rights and Social Risks and Impacts in support of its ESHR Policy in March 2017 and subsequently updated it upon the implementation of EP4 in July 2020. UKEF further updated its ESHR Policy in November 2020 to reflect updates regarding consideration of climate change and post-issue public reporting of cases classified as Category B. The UKEF Sustainability Policy Statement was published in 2023, which sets out the sustainability factors UKEF considers and how these are embedded across business activities. Further information can also be found in UKEF’s Annual Report and Accounts.
UKEF’s Environmental & Social Risk Management Division (E&S Team) is responsible for carrying out the implementation of UKEF’s ESHR Policy. The E&S Team’s staff are professionally qualified and directly undertake and/or manage the necessary ESHR due diligence and liaise with project sponsors and/or exporters and UKEF decision-makers.
Over the reporting period the E&S Team had 13 full-time equivalent staff and reported directly to the Head of Strategy, Sustainability and Impact Group and the Chief Executive. The E&S Team continues to provide internal training to UKEF’s Business Group (including underwriters), and wider staff, to raise awareness of the requirements of the OECD Common Approaches, the EPs, and general ESHR and climate change risk management.