Banco República and the Equator Principles
Banco República adhered to the Equator Principles in 2008, becoming one of the first banks in Latin America in doing so. It has been the pioneer in Uruguay, still being the only one in the country.
The Equator Principles are a group of guidelines for the management of social and environmental issues related to investment projects. They were prepared at the request of the International Finance Corporation (IFC) – an agency of the World Bank – and voluntarily adopted by financial institutions.
The financial entities that adhere to these principles undertake to evaluate and take into consideration the social and environmental risks of the projects requiring financing for investments over US$ 10 million. Credit will be granted only to those proposals that demonstrate an appropriate management of said risks.
Under this new business management modality, the society -in general- benefits from the implementation of socially responsible projects, and the companies -in particular- benefit from lower operational risks, improved competitiveness and broader access to international markets. For the Bank, these principles represent a guarantee that the loans granted are going to be destined to socially and environmentally sustainable projects, in consistency with its profile as a development bank.
Therefore, Banco República is part of the group of leading international banks adhered to these principles, responsible for more that 95% of the investment projects worldwide.
Our commitment to the application of the Equator Principles standards
All new investment projects requesting financial assistance to our Institution are thoroughly evaluated, as regards their financial and technical feasibility, by a cross-disciplinary team of professionals composed of architects, accountants, economists and engineers.
These professionals, who are employees of the Institution, independent from their business areas, are also in charge of assessing the environmental aspects involved in the projects. To this effect, they receive ongoing training and their representatives take part in national and international events, such as training workshops carried out annually by the IFC after the annual meetings of the banking community adhered to the Equator Principles.
The environmental assessment implies in all cases – regardless of the credit amount– the control of the compliance with the regulations established by the National Environmental Authority and other regulating authorities. For investment projects over US$ 10 million, it is also necessary to:
- Categorise the project as per the provisions of Equator Principles, Principle 1.
- Gather the customers and their advisers on environmental matters with the team of professionals of the Institution, in order to inform them about the requirements they should take into account in the design of environmental impact studies, consistent with national regulations, IFC performance standards and the Equator Principles criteria.
- Analyse the environmental impact studies, for which purpose a series of standardized documents has been developed (checking lists, report models, etc.) to allow to speed up the process and ensure the application of the corresponding standards and regulations.
- Participate through representatives of the team of professionals in public hearings involving projects requesting financing to the Institution.
- Control of the compliance with the Environmental Management Plan during building, operation and disassembling stages, through monitoring reports issued by the regulating authorities and direct inspections of the premises involved in the project.