Equator Principles

In October 2007, EDC joined a growing list of international financial institutions committed to the Equator Principles, a financial industry benchmark for the determination, assessment and management of social and environmental risk in project financing.

Prior to adopting the Equator Principles, and since 2003, EDC has also been applying the Organisation of Economic Co-Operation and Development’s Common Approaches on the Environment, which binds export credit agencies to specific environmental and social review practices. EDC views the Equator Principles as a complement to the Common Approaches, and enables EDC to bridge the leading practices of both ECAs and commercial financial institutions. EDC’s other commitments to assessing projects is cemented in its corporate Environmental and Social Risk Management Policy and the EDC Environmental and Social Review Directive (ERD). The ERD sets out the process by which EDC will assess the environmental and social impacts (and mitigation measures) of a project, and is a legally-binding requirement for EDC under the laws of Canada.

The Equator Principles, the Common Approaches, and the ERD are aligned in the requirement for projects to meet the elements of the same international standards, namely the International Finance Corporation’s Performance Standards on Social and Environmental Sustainability and sector-specific Environmental, Health, and Safety Guidelines. By aligning these requirements, clients of ECAs and commercial financial institutions benefit from meeting the same standards when undertaking environmental and social impact assessments.

Further detail on EDC’s project review process is described in Understanding EDC’s Project Review Process.

EDC’s Implementation of the Equator Principles

Dedicated Resources

EDC has a dedicated team of environmental and social specialists, tasked with implementing EDC’s environmental and social review processes and procedures, including conducting reviews under the Equator Principles. The Environmental Advisory Services (EAS) team consists of environmental and social advisors, reporting to the Director of Environmental Advisory Services and the Vice-President of Corporate Social Responsibility. With different backgrounds including environmental science, biology, engineering, business, and international development, the team draws on a breadth of experience and knowledge relevant to the environmental and social risk assessment field.

Integration of Environmental and Social Review

Projects are examined by EAS for potential adverse environmental and social impacts.

Initially, EDC has various forums in place including team alignment meetings, huddles, and a triaging committee, that help identify deal related issues. At this point in time, EAS then look for areas that may not be aligned with our internal policies on human rights, environmental and social responsibility. Depending on the degree to which projects measure up to the internationally recognized standards noted above, we will either engage project sponsors in further dialogue, discuss ways to deal with any serious issues, or, if gaps cannot be addressed, we decline the project outright.

Should we proceed to the next stage, EDC takes an in-depth look at the project design and evaluates the Environmental and Social Impact Assessment provided by the project developer/sponsor. Information requirements and the depth of EDC’s review are linked to the project categorization: Category A, B or C. In some cases, a lender’s group, of which EDC is a member, hires a number of specialized advisors to assist with a more detailed review. An independent environmental and social expert will provide unbiased input about the project’s potential impacts, adequacy of the mitigation measures and the project’s ability to meet international standards. Transactions supporting projects are reviewed by senior leadership during the due diligence process prior to signing of the loan.

EAS also ensures the project developer/sponsor formulates an environmental and social action plan. The plan will describe and prioritize time-limited commitments to complete any additional measures that the project will satisfy EDC and that it has fully met the requirements of the IFC Performance Standards. If the outcome of this stage is favourable, the environmental and social review must be authorized by EDC's President. After the loan agreement is signed, EDC continues to monitor the project for compliance.

For a list of transactions that underwent a review under the Equator Principles, see table below.​

Equator Principles transactions reaching financial close during 20151

Six Project Finance transactions and one Project Related Corporate Loan transaction, reached financial close during 2015.

​Project Name ​Project Description ​Sector ​Region ​Project in Designated Country2 Project Finance (PF) or PRCL​3 ​Independent Review Performed ​International Standards Applied
​ ​Category A Projects
Gahcho Kué Diamond Mine Project Construction and operation of a new open pit diamond mine project located in the Northwest Territories Mining Americas (Canada)​ ​Yes PF​ ​Yes ​Host Country Standards
Crossrail Project Construction, operation and maintenance of a 118 km commuter rail line and associated facilities, rolling stock and depot in London, England Mining Europe Middle East and Africa
(United Kingdom)
​Yes PRCL​ ​No ​Host Country Standards 
SOCAR Turkey Aegean Refinery Development and construction of a greenfield refinery Other Europe Middle East and Africa
No​ ​PF ​Yes IFC Performance Standards​
Category B Projects​ ​ ​ ​ ​ ​ ​ ​
Ararat Windfarm The Project consists of the construction and operation of a wind farm with a design capacity of up to 242MW, comprised of up to 75 wind turbine generators in rural land located northeast of town of Ararat in Victoria, Australia. Power

Asia Pacific (Australia)

​Yes PF​ Yes Host Country Standards​
Minera Valle Central (MVC)​ Expansion of MVC’s infrastructure for the collection of Codelco’s mine tailings for secondary processing within MVC’s enhanced copper recovery plant.​ Mining​ Americas (Chile)​ Yes​ P​F​ Yes Host Country Standards, IFC Performance Standards​
Nordsee One GmbH​ Development and operation of a 332MW wind farm consisting of 54 wind turbine generators located in the German North Sea.​ Power​ Europe Middle East and Africa
​Yes​ PF Yes Host Country Standards​
BioAmber BioSuccinic Plant Construction of a 30,000 metric tonnes per annum biosuccinic plant in Sarnia, Ontario Other

Americas (Canada)

​Yes ​PF ​No ​Host Country Standards

A summary of EDC’s assessment of the environmental and social impacts is prepared for all Category A projects. Those reviews can be found in this table.

 1 Equator Principles III requires reporting on transactions which have reached financial close.  For additional detail see The Equator Principles, June 2013
2 Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment.
3 Project-Related Corporate Loans are corporate loans, made to business entities related to a single Project, either a new development or expansion, where the Known Use of Proceeds is related to a single Project. For additional detail see The Equator Principles, June 2013.


​Project Finance ​ ​Project-Related Corporate Loans ​
​Sector ​Category A Category B Category A Category B​
​Mining 1 1​ 1​​
​Power 2​
Others​  1 1​
​Totals 2​ 4 ​1 0
​Americas 1 2​  
​Europe, Middle East and Africa 1​ 1​ 1​
​Asia Pacific 1
​Totals 2 4 1 0
Country Designation
​Designated Country 2​ 4​
​Non-Designated Country 1
​Totals 3 ​4 0 0
Independent Review Performed
​Yes 2 3​ ​​
​No 1 1​
​Totals 2 4 1 0