National Australia Bank (NAB) has become the 55th financial institution to adopt the Equator Principles, a set of voluntary set of guidelines on social and environmental issues relating to the financing of development projects.
The principles were launched by 10 banks in June 2003, and then revised in June 2006. In total, it is estimated that 85% of project financing worldwide is conducted by banks adhering to these guidelines.
NAB will now only provide loans to projects greater than US$10mn that comply with international recognized social and environmental standards. The bank worked closely with the IFC to incorporate these principles into its operations.
John Hooper, CEO of NabCapital said the bank’s project finance credit risk policies have already been guided by the Equator Principles for at least the past 10 years.
He adds: “Irrespective of the value of the project financing work we undertake, we apply the Equator Principles to be a responsible lender. The adoption of the standard now formalises the rigour that NAB has applied to all projects in developing countries.
“Borrowers must have action plans to reduce or mitigate environmental and social risks. In some cases they will be obliged to consult with affected communities if projects have potential for significant adverse environmental and social impacts.”