The UAE’s largest lender in terms of assets, National Bank of Abu Dhabi (NBAD), announces that it has signed up to the Equator Principles (EP), an internationally recognised risk-management framework in the financial industry for identifying, assessing and managing environmental and social risk in bank-financed projects.
NBAD is the first bank in the UAE to adopt the EP, which was launched in 2003 and is considered to be the financial industry’s gold standard for sustainable project, the bank said in a statement emailed to AMEinfo.
“The adoption of the Equator Principles resonates with the bank’s core values and demonstrates its leadership on environmentally and socially responsible lending practices,” says Nathan Weatherstone, NBAD’s head of renewable energy.
“This is part of a wider initiative at NBAD to focus on the renewable energy sector with the objective of creating value for our core clients and, in so doing, building a profitable venture which addresses their needs and interests.”
EP are applied to new project financing with capital costs exceeding $10 million across a range of industry sectors, as well as to corporate loans and advisory assignments related to projects.
“Currently, 80 Equator Principles Financial Institutions (EPFIs) in 35 countries have officially adopted the EPs, covering more than 70 per cent of international project finance debt in emerging markets,” according to the website of the Equator Principles Association.
“EPFIs commit to implementing the EP in their internal environmental and social policies, procedures and standards for financing projects and will not provide project finance or project-related corporate loans to projects where the client will not, or is unable to, comply with the EP.”
Belinda Scott, NBAD’s head of citizenship and corporate sustainability, says that the bank has faced sustainability, environment and social responsibility challenges. “Adopting the Equator Principles will crystallise our evaluation of environmental and social issues in a more systematic manner that is consistent with international best practice.”