Equator Principles

Project finance: The adoption of the Equator Principles reinforces KBC’s long-standing commitment to environmental and social responsibility in all its activities.

We officially adopted the Equator Principles - the leading financial industry benchmark for determining, assessing and managing environmental and social risks in major industrial and infrastructure projects - on 27 January 2004. The Principles are based on well-established policies and guidelines issued  by the International Finance Corporation (IFC, the private-sector arm of the World Bank Group) and the World Bank. KBC has integrated the Equator Principles directly into the KBC General Credit Policy. They are applied throughout KBC’s project finance business worldwide.

In line with the requirements of the Equator Principles, we provide financing or advisory services only when the borrower is willing to comply with the environmental and social processes and policies of these Principles. To this end, we have appointed an Equator Principles coordinator within each entity to act in concert with the central credit department, where ultimate responsibility for reviewing the environmental and social aspects of projects is located.

In April 2014, following the revision of the Equator Principles, we have organised a training for the business divisions and credit risk departments to enhance knowledge and implementation of the Equator Principles.

The fourth update of the Equator Principles was adopted in November 2019 and will come into effect from July 2020. Amendments and new commitments have been made in relation to human rights, climate change, indigenous peoples and biodiversity. The scope of the EPs has also been extended to capture more project-related transactions.

Project finance in 2019

Number of projects financed by risk category:

2019 Category A Category B Category C Total
Project Finance 0 4 7 11
Project Related Corporate Loans 1* 1* 4 6
Project Finance Advisory 0 0 0 0
Total 1 5 11 17

* Relates to one project with several sub-projects.

In 2019, KBC had 17 transactions under the Equator Principles (compared to 11 in 2018), one category A project (projects with potential significant adverse environmental and social risks and/or severe impact), five category B projects (projects with potential limited adverse environmental and social risks and/or impact that are less severe) and 11 category C projects (risks considered minimal and projects in legal compliance in the country of execution).

The Category A project requires strict monitoring of the environmental impact as well as reporting to the competent authorities, which is also included in the credit agreement. Furthermore, the project is required to its own monitoring and present the results to the Authorities, including the regional environmental protection agencies.
 

 Number of projects financed by sector, by region, by designated country and that received an independent review:

2019 Category A Category B Category C Total
Sector        
Infrastructure 0 0 1 1
Power 0 4 6 10
Other 1 1 4 6
Region        
Europe, Middle East & Africa 1 5 11 17
Designated Country        
Yes 0 4 7 11
No 1 1 4 6
Independent Review        
Yes 0 3 5 8
No 1 2 6 9
Project Finance Total 1 5 11 17

The portfolio of closed transactions comprised of ten power projects, of which 8 in the renewable energy sector (2 off-shore wind projects, 1 on-shore wind farm and 5 solar plants), 1 co-generation plant and 1 electricity lighting grid. In addition, there was 1 infrastructure related project and 6 projects related export finance (buyers credit) transactions. For an overview of projects please visit https://equator-principles.com/reporting-kbc-group-n-v-2018/.

The reported statistics do not take account of small projects in the renewable energy sector with total investment costs below the 10 million US dollar threshold in both Belgium and Central Europe.

Last update: 29-03-2019
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