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Limiting our adverse impact

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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.

Project finance in 2017

Number of projects financed by risk category:

Equator Principles
2017 Category A Category B Category C Total
Project Finance 0 8 4 12
Project Related Corporate Loans 0 0 0 0
Project Finance Advisory 0 0 0 0
Total 0 8 4 12

In 2017, a total of 12 projects reached financial closing (compared to 13 in 2016), 5 of which were ‘greenfield’ projects, the rest of the projects were related to the refinancing of existing projects.

With respect to the categorisation, 8 projects were classified as category ‘B’ and 4 projects were assigned a category ‘C’. The environmental and social impact of these projects are deemed limited and can be readily addressed through mitigating measures (category ‘B’), or the risks are deemed limited and the projects are in line with host country legislation (Category C).

Over the past 8 years, KBC did not engage in the financing of category ‘A’ projects – projects with potentially significant adverse social or environmental impacts that are diverse, irreversible or unprecedented.

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

Equator Principles
2017 Category A Category B Category C Total
Sector        
Infrastructure 0 4 1 5
Power 0 4 3 7
Region        
Europe, Middle East & Africa 0 8 4 12
Designated Country        
Yes 0 6 4 10
No 0 2 0 2
Independent Review        
Yes 0 7 1 8
No 0 1 3 4
Project Finance Total 0 8 4 12

The portfolio of closed transactions comprised of seven projects, all  in the renewable energy sector (4 wind projects and 3 solar farms) and 5 infrastructure projects. For an overview of projects please visit http://www.equator-principles.com/index.php/members/kbc.

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.

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