Equator Banks get poor Marks on Transparency and Disclosure
As a practitioner involved in bankable ESIAs, and supporting developers and financial advisors/institutions for projects ranging from wind farms to mining, I follow the developments around the IFC Performance Standards and the Equator Principles closely. This is why Olaf Weber’s publication “Equator Principles Reporting: Do Financial Institutions meet their Goals?” caught my eye. -- Link: http://wp.me/p27qSt-FG
Olaf Weber, who holds the
Olaf Weber notes that only about half of the
The lack of project-level disclosure by Equator Banks has been lamented by advocacy NGOs in the past. Being used to (and still criticizing) the detailed project-level disclosure offered by multilateral financial institutions, such as the
Olaf Weber concludes that additional mechanisms, such as standardization of reporting or third-party validation would be needed to “guarantee” that the
Looking at the latest
Project Name Reporting for Project Finance
The EPFI will submit project name data directly to the Equator Principles Association Secretariat for publication on the Equator Principles Association website.
Project name reporting is:
- applicable only to Project Finance transactions that have reached Financial Close,
- subject to obtaining client consent,
- subject to applicable local laws and regulations, and
- subject to no additional liability for the EPFI as a result of reporting in certain identified jurisdictions.
The EPFI will seek client consent at any time deemed appropriate but no later than Financial Close.
The EPFI will submit the following project name data directly or via a web link:
- Project name (as per the loan agreement and/or as publicly recognised),
- Calendar year in which the transaction reached Financial Close,
- Sector (i.e. Mining, Infrastructure, Oil and Gas, Power, Others),
- Host country name.
Individual EPFIs may want to publish the data as part of their individual reporting, but there is no obligation to do so.
The above shown disclosure requirements still fall short of those commonly used by the benchmark setting multilateral financial institutions. They generally disclose project details before their board meetings and subsequent financial close to enable stakeholder review and engagement. However, some very excited conversations during
Checking the Equator Principles website today (September 5, 2014), I could not find any listing of project-level disclosures (yet). Do you expect that the new reporting guidelines will become a game changer in terms of project level disclosure and transparency for Equator Banks? Or do you feel that this is only window dressing?
See also Dr. Bill Kennedy's blog on How about Canadian Equator Banks and Transparency?