UKEF's implementation of the Equator Principles (1 November 2018 to 31 March 2019)
Published 10 July 2019
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1. Background: Equator Principles
UK Export Finance (UKEF) adopted the Equator Principles (EPs) on 31 March 2016, joining over 90 other international financial institutions in applying this global guidance for environmental, social and human rights (ESHR) risk management when financing projects. In July 2018, UKEF was re-elected by the Equator Principles Financial Institutions (EPFIs) to remain on the EP Steering Committee in a management support role for a second term.
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 07 April 2016, which it applies in tandem with the EPs as outlined in its Policy and practice on Environmental, Social and Human Rights due diligence and monitoring (ESHR policy).
This reporting of our progress between 1 November 2018 and 31 March 2019 forms part of UKEF’s obligations under Equator Principle 10 (Reporting and Transparency) and as articulated in Annex B of the EPs. It is noted that the 5 months covered in this reporting period has been used to bring UKEF’s annual EP reporting in line with UKEF’s financial year, which will revert to 12-monthly from April 2019.
2. Projects supported within the scope of the Equator Principles
Between 1 November 2018 and 31 March 2019, UKEF has reached financial close on three transactions that fell within the scope of the Equator Principles, and for which it received an exporter application form following UKEF’s adoption of the EPs. These are reported in Table 2.1 (Project-related corporate loans) and Table 2.2 (Project finance).
2.1 Project-related corporate loans
| Category | Sector | Region | EP country designation | Has an independent review taken place? |
|---|---|---|---|---|
| A | Oil and gas | Europe, Middle East and Africa | Non-designated (Kuwait) | Yes |
| A | Oil and gas | Americas | Non-designated (Brazil) | No |
2.2 Project finance
| Transaction name | Category | Sector | Region | EP country designation | Has an independent review taken place? |
|---|---|---|---|---|---|
| Duqm refinery | A | Oil and gas | Europe, Middle East and Africa | Non-designated (Oman) | Yes |
UKEF has not carried out any Project Finance Advisory Services or commenced support for Bridge Loan cases 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 Equator Principles 1-8, and for post-issue monitoring, to satisfy Equator Principle 9. UKEF published a Note of Human Rights and Social Risks and Impacts in support of its ESHR policy in March 2017. Further information can also be found in UKEF’s Annual Report and Accounts 2018 to 2019 .
UKEF’s Environmental & Social Risk Management Team (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. The E&S Team has 8 full-time equivalent staff and reports directly to the Head of Business 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 risk management.