The challenge: Navigating first-time Equator Principles compliance

The Equator Principles (EPs) are an internationally recognized risk management framework for financial institutions to identify, assess, and manage environmental and social risks when financing projects. A leading U.S. LNG developer was seeking EPs-aligned financing for a $4 billion expansion project that would add 10 million tons per annum of liquefaction capacity to its operations. As a first time EPs participant, the developer sought a partner to navigate these unfamiliar requirements with confidence. 

With over two decades of experience supporting EPs-aligned project finance transactions, ERM was a strong fit. Our teams are globally recognized for guiding developers and lenders through the EPs and International Finance Corporation (IFC) Performance Standards. Coupled with expertise in related environmental, social, health, and safety (ESHS) requirements, we help build lender confidence and reduce environmental and social risk in complex high-value projects. 

ERM’s role: Expert guidance on Equator Principles alignment and related ESHS standards 

Drawing on over 20 years of experience conducting environmental and social due diligence for lenders, ERM provided strategic guidance to align the project with EPs, designing the work to support review by the Lenders’ Independent Environmental and Social Consultant (IESC).  

ERM first conducted a comprehensive review of project documentation against applicable standards, covering the following materials: 

  • Environmental and social impact assessments and permitting records 
  • Environmental investigations and ESHS policies 
  • ESHS management systems, including stakeholder engagement programs and grievance mechanisms.  
  • Contractual obligations to ensure contractors adhered to the applicable ESHS standards  

To validate these findings, ERM worked closely with the developer’s project teams responsible for implementing their ESHS management systems, identifying strengths, weaknesses, and areas for improvement. Building on these findings, we coached the teams on EPs requirements, and prepared them to meet the lender’s expectations, including a site visit by the lenders’ IESC.  

Lastly, ERM produced an EPs alignment report designed specifically for lenders and their appointed IESC. The report clearly articulated how the developer was managing and meeting EPs requirements, which streamlined the IESC review process and supported the successful financing acquisition.  

The impact: Achieving first-time compliance and accelerated financing

ERM’s report provided lenders with clear evidence of the project's alignment with EPs requirements, enabling the IESC to complete its review efficiently and with confidence. The developer ultimately secured project finance under the EPs for the first time. The information within the report helped expedite the loan approval process, enabling the client to secure $4 billion in financing and accelerate its project schedule.