LUSAKO  RAPHAEL  SENIOR  ENVIRONMETNAL  CONSULTANT  AUGUST  2015  

•  A  leading  Tanzanian  Company  provider  of  environmental,  health  and  safety,  risk  and  social  consulMng  services    

•  Two  broad  pracMce  areas  are:    –  Impact  Assessment  and  Planning  –  Performance,  Assurance  and  Risk  Management    

•  Served  over  100  companies  in  and  around  Tanzania  and  East  Africa    •  Performance  assurance  by  implemenMng  ISO  9001:  2015  requirements  •  Website:  www.tansheq.com  •  Facebook:  www.facebook.com/tansheq  

Financial  InsMtuMons  involved  in  Project  Finance  recognize  that  social  and  environmental  risks  may  affect  the  ability  of  

the  project  to  generate  revenues  

Project  Finance  is  a  specific  type  of  financial  transacMon  in  which  lenders  rely  solely  on  the  revenues  generated  by  a  “project”  as  the  source  of  repayment  and  security  for  the  

loan  (aka  Revenue  Based  Finance)  

WHY  EQUATOR  PRINCIPLES?  

Which  is  formed  by  

On    Behalf  of  

Are    Created    By    

EQUATOR PRINCIPLES ASSOCIATION

STEERING COMMITTEE

EQUATOR PRINCIPLES ASSOCIATION

EQUATOR PRINCIPLES FINANCIAL

INSTITUTIONS (EPFI)

EQUATOR PRINCIPLES ASSOCIATION SECRETARIAT

Runs  day  to  day  business  of  

Private  sectors  financial  insMtuMons  which  are  members  

of  Equator  Principles  

HOW  DOES    IT  WORK?  

Scope  of  Projects  Covered  by  Equator  Principles  

COVERED  PRODUCTS  1.   PROJECT  FINANCE  

ADVISORY  SERVICES  2.   PROJECT  FINANCE  3.   BRIDGE  LOANS  4.   PROJECT-­‐RELATED  

CORPORATE  LOANS  (including  Export  Finance  in  the  form  of  Buyer  Credit)    

MAIN  CRITERION  (CAPITAL  COST  OF  AT  LEAST  US$  10  M)  

1.   REVIEW(AND(CATEGORIZATION(2.   ENVIRONMENTAL(AND(SOCIAL(ASSESSMENTS(3.   APPLICABLE(ENVIRONMENTAL(AND(SOCIAL(

STANDARDS(4.   ENVIRONMENTAL(AND(SOCIAL(MANAGEMENT(

SYSTEM(AND(EQUATOR(PRINCIPLES(ACTION(PLAN(

5.   STAKEHOLDER(ENGAGEMENT(6.   GRIEVANCE(MECHANISM(7.   INDEPENDENT(REVIEW(8.   COVENANT(9.   INDEPENDENT(MONITORING(AND(REPORTING(10.   REPORTING(AND(TRANSPARENCY(

Principle  1:  Review  and  CategorizaMon  (1)  EPFI  categorize  proposed  finance  bound  project  based  on  the  magnitude  of  its  potenMal  environmental  and  social  risks  and  impacts  

SCREENING  

CATEGORY  A  

potenMal  significant  adverse  env  &  social  risks  and/or  diverse,  irreversible  or  unprecedented  impacts  

CATEGORY  B  

potenMal  limited  adverse  env  &  social  risks  and/or    few  ,  site-­‐specific,  largely  reversible  and  readily  addressed    impacts  

CATEGORY  C    minimal  or  no  adverse  env  and  social  risks  and/or  

impacts  

Principle  2:  Environmental  &  Social  Assessment  

SCREENING(

CATEGORY(A((Significant(env(and(

social(risks)(

ESIA(

SPECIALIST(STUDIES((HUMAN(RIGHT(DUE(

DILLIGENCE)((

CATEGORY(B((limited(adverse(env(and(social(risks)(

ESIA(

SPECIALIST(STUDIES(

CATEGORY(C((minimal/no(adverse)(

LIMITED(ENVIRONMENTAL(

ASSESSMENT((AUDIT)(

Environmental  and  Social  Assessment  Required  

Project  Category  (as  per  screening)  

•  The  Assessment  process  should  address  compliance  with  relevant  country  laws,  regulaMons  and  permits;  

•  Projects  in  Designated  Countries  should  comply  with  relevant  country  laws  and  regulaMons  commensurate  to  Equator  Principles  2,  4,  5  and  6;  

•  Projects  located  in  Non-­‐Designated  Countries  should  comply  with  IFC  Performance  Standards  &  World  Bank  Group  EHS  Guidelines    

Principle  3:  Applicable  Environmental  and  Social  Standards  (1)  

Principle  3:  Applicable  Environmental  and  Social  Standards  (2)  

Others  which  might  be  used  by  EPFIs  in  non  designated  countries:  •  World  Bank  Safeguard  Policies  •  World  Bank  Group  EHS  Guidelines  •  ILO  Core  Labor  Standards  •  EU  Environmental  LegislaMon  •  World  Commission  on  Dams  •  EA  and  Involuntary  Reseklement  Sourcebooks  •  Pest  Management  Guidebook  •  Regulatory  Framework  for  Dam  Safety  •  PolluMon  PrevenMon  Abatement  Handbook  •  OPCS  Guidance  Notes  

Principle  4:  Environmental  and  Social  Management  System  &  Equator  Principle  AcMon  Plan  

Category  A  &  B  Projects  client  develops  Environmental  and  Social  Management  System  (ESMS)  detailing  a  systemaMc  way  of  implemenMng  an  Environmental  and  Social  Management  Plan  (ESMP)    

Where  the  applicable  standards  are  not  met  to  the  EPFI’s  saMsfacMon,  the  client  and  the  EPFI  will  agree  an  Equator  Principles  AcMon  Plan  (AP)  

Principle  5:  Stakeholder  Engagement  

•  Category  A  and  Category  B  Projects,  requires  effecMve  Stakeholder  Engagement    

•  Stakeholder  Engagement  should  be  an  ongoing  process  in  a  structured  and  culturally  appropriate  manner  with  Affected  CommuniMes  and  Other  Stakeholders  

•  This  process  should  be  free  from  external  manipulaMon,  interference,  coercion  and  inMmidaMon  

Principle  6:  Grievance  Mechanism  

Required  for  Category  A  and,  as  appropriate,  Category  B  Projects,  as  part  of  the  ESMS  

The  client  will  inform  the  Affected  CommuniMes  about  the  mechanism  in  the  course  of  the  Stakeholder  Engagement  process  

Principle  7:  Independent  Review  

•  Independent  Environmental  &  Social  Consultant  shall  do  independent  review  for  Category  A  and/or  B  projects,  or  projects    with  high  risk  impacts  

 •  High  risk  impacts  includes,  but  not  limited  to,  following:  

adverse  impacts  on  indigenous  peoples;  CriMcal  Habitat  impacts;  significant  cultural  heritage  impacts  and  large-­‐scale  reseklement    

•  Independent  Review  check  compliance  to  EP,  documentaMon  to  be  reviewed  include  ESMPs,  ESMS,  and  SEP  and  propose/opine  EPAP  

Principle  8:  Covenants    

•  All  Projects:  Client  will  covenant  in  the  financing  documentaMon  to  comply  with  relevant  host  country  environmental  &  social  laws  &  regulaMons  

•  Category  A  &  B  Projects:  Client  will  covenant  the  financial  documentaMon:    –  to  comply  with  the  ESMPs  and  EPAP  during  construcMon  &  operaMon;    

–  to  provide  periodic  (at  least  annually)  reports;  and    –  to  decommission  the  faciliMes  in  accordance  with  decommissioning  plan  

Principle  9:  Independent  Monitoring  and  ReporMng  

Category  A  and/or  B  Projects,  require  the  appointment  of  an  Independent  Environmental  and  Social  Consultant,  to  verify  project’s  monitoring  informaMon  which  would  be  shared  with  the  EPFI  

Principle  10:  ReporMng  Transparency  

•  Client  shall  ensure:  

–  a  summary  of  the  ESIA  is  accessible  and  available  online  

–  publicly  report  GHG  emission  levels  (combined  Scope  1  and  Scope  2  Emissions)  during  the  operaMonal  phase  for  Projects  emiong  over  100,000  tonnes  of  CO2  equivalent  annually  

•  EPFI  will  report  publicly,  at  least  annually,  on  transacMons  that  have  reached  Financial  Close  and  on  its  Equator  Principles  implementaMon  processes  and  experience.    

What  Tansheq  Offers  

•  E&S  due  diligence  for  Project  Lenders;  •  ESIA/ESMP  for  Project  proponents;  •  Lenders’  Environmental  and  Social  Advisor  reviewing  the  

Project  ESIA,  ESMP,  management  system  and  loan  covenants  

•  EHS  management  systems  for  Projects  on  behalf  of  Project  proponents  

•  Training  on  EP  and  IFC  PSs  •  Monitoring  implementaMon  of  ESMP  and  compliance  with  

loan  covenants    

Contacts  

Lusako  Raphael  Plot  No.  83,  Wakulima  Road,  Hananasif  Estate  

P.  O.  Box  31517,  Dar  es  Salaam.  Tel:  +255713695552/+255684884665;  

E-­‐mail:  lusako@tansheq.com;  Website:  www.tansheq.com