Equator Principles

For ICO, risk analysis which includes and considers the indirect impacts of the financing projects does not respond solely to the fiduciary duty conferred by its public nature and its vocation as a Development Entity, but also to the demands of all its stakeholders.

Under this premise, ICO will rigorously analyse all social and environmental risks of operations falling under the "scope" of the Equator Principles, and which will be applied to new financing projects in all countries and all economic sectors.

• Project finance advisory services where total Project capital costs are US$10 million or more.
• Project finance with total project capital costs of US$10 million or more.
• Project-related corporate loans  where all of the following three criteria are met:

1. The majority of the loan is related to a Project over which the client has Effective Operational Control (either direct or indirect).
2. The total aggregate loan amount and the EPFI’s individual commitment (before syndication or sell down) are each at least US$50 million.
3. The loan tenor is at least two years.

• Bridge loans with a tenor of less than two years that are intended to be refinanced by Project Finance or a Project-Related Corporate Loan that is anticipated to meet the relevant criteria described in 2 and 3 above.
• Project-related refinance and project-related acquisition finance, where all of the following three criteria are met:

1. The underlying Project was financed in accordance with the Equator Principles framework.
2. There has been no material change in the scale or scope of the Project.
3. Project Completion has not yet occurred at the time of the signing of the facility or loan agreement.

While the Equator Principles are not intended to be applied retroactively, the EPFI will apply the Principles to the financing of expansions or upgrades of an existing Project.
 

* Project-related corporate loans include loans to government-owned corporations and other legal entities created by a government to undertake commercial activities on behalf of the government and Export Finance in the form of Buyer Credit.

Project-related corporate loans exclude Export Finance in the form of Supplier Credit (as the client has no Effective Operational Control) and other financial instruments that do not finance an underlying Project, such as Asset Finance, hedging, leasing, letters of credit, general corporate purposes loans, and general working capital expenditures loans used to maintain a company’s operations.
 

During the year 2017, the ICO implemented the Ecuador Principles in its operations, integrating new obligations into its usual internal processes for approving and managing operations. With the entry into force of the fourth version of the Principles in 2020, the ICO has updated its internal procedures to respond to the main changes introduced.


Transversally, the areas and departments taking part in ICO's direct financing have assumed part of the Equator Principles guidelines integrating them into its financing processes:

To achieve an efficient integration of the Equator Principles management at ICO, the internal training process has been developed in two phases, the first part from HR and CSR with the aim of raising awareness about the importance of appropriately managing the social and environmental risks. The second phase, as part of the training plan on our adherence to the Equator Principles and the necessary training of the different working teams and areas:

• 1st Phase: Awareness and training for all ICO staff focused on explaining ICO's commitment to sustainable development due to its public nature and the need to ensure that the projects we finance are executed in a sustainable, appropriate manner and in accordance with standards and norms recognised by the international financial community.
• 2nd Phase: Training teams involved in credit analysis, on the specific analysis of environmental and social risks and on Equator Principles standard requirements.

These training lines remain open in the ICO's training plan, especially for all the employees involved in monitoring the environmental and social impact of ICO's activity and associated risks.

Due to the update of the IV version of the Ecuador Principles and to facilitate the understanding and application of the same, the ICO staff has an online training tool available to deepen into the process of applying the standard.
 

ICO has successfully completed the implementation process and now relies on a new standard to help it pursue the SDGs and contribute to a low carbon economy which slows down climate change.

Through its Sustainability Policy, ICO seeks to ensure that all its activity transversally generates the trust and transparency demanded of its stakeholders and, therefore, through the Equator Principles, ICO establishes more stringent due diligence procedures for its financing and credit risk analysis procedures.

ICO adopts these Principles voluntarily, which complement its mission and through which it is obliged to classify and establish management plans to mitigate the social, environmental or climate change impact of the large investment projects in which it plays a part.

In this regard, ICO undertakes to publicly disclose all the projects financed which fall under the "scope" of the Equator Principles annually and following the reporting guidelines indicated in the Principles themselves.

Reporting Operations according to the Equator Principles 2021 (PDF)

Reporting Operations according to the Equator Principles 2020 (PDF)

Reporting Operations according to the Equator Principles 2019 (PDF)

Reporting Operations according to the Equator Principles 2018 (PDF)