Standard Chartered Annual Report 2010
Equator Principles
The Equator Principles are a voluntary set of standards for determining, assessing and managing E&S risk in project financing and apply to projects of USD10 million or more in capital costs.
We adopted the Equator Principles in 2003 and apply them to all our project and advisory transactions irrespective of the capital costs.
Under the Equator Principles, E&S risks are classified as: low (Category C); medium (Category B); or high (Category A). All Category A projects are automatically referred to our WBRRRC for approval. Reflecting the level of potential risk, some Category B projects may also require the approval of the WBRRRC.
We report annually on the number of advisory and lending mandates executed by Standard Chartered, as indicated in Tables 1–3 below. In 2010, 46 per cent of our lending was classified as Category A. The proportion of such transactions in our total project and advisory transactions reflects the Group’s presence in emerging markets and the rapid growth in demand for metals, minerals and other commodities as well as food, energy and water and sanitation.
Table 1: Equator Principles lending and advisory mandates
| Lending Mandates | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
|---|---|---|---|---|---|---|
| Cat A | 5 | 5 | 8 | 5 | 3 | 12 |
| 28% | 25% | 24% | 18% | 20% | 46% | |
| Cat B | 10 | 12 | 22 | 19 | 10 | 13 |
| 56% | 60% | 65% | 68% | 67% | 50% | |
| Cat C | 3 | 3 | 4 | 4 | 2 | 1 |
| 17% | 15% | 12% | 14% | 13% | 4% | |
| Total | 18 | 20 | 34 | 28 | 15 | 26 |
| 100% | 100% | 100% | 100% | 100% | 100% |
| Advisory Mandates | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 |
|---|---|---|---|---|---|---|
| Cat A | na | na | na | na | 4 | 5 |
| Cat B | na | na | na | na | 0 | 2 |
| Cat C | na | na | na | na | 1 | 3 |
| Total | na | na | na | na | 5 | 10 |
Table 2: 2010 lending and advisory mandates by regions
| Asia | Africa | Middle East | America | Europe | |
|---|---|---|---|---|---|
| Cat A | 6 | 6 | 3 | 2 | 0 |
| Cat B | 4 | 5 | 6 | 0 | 0 |
| Cat C | 1 | 2 | 0 | 0 | 1 |
| Total | 11 | 13 | 9 | 2 | 1 |
Table 3: 2010 lending mandates by industrial sectors
| Split between sectors | Bank share of project value | Total Project value | Standard Chartered Bank % | |
|---|---|---|---|---|
| Oil & Gas | 9 | 1,195.5 | 42,224 | 3% |
| Power | 6 | 301.0 | 7,100 | 4% |
| Mining | 6 | 362.5 | 6,078 | 6% |
| Infrastructure | 3 | 178.5 | 1,705 | 10% |
| Other | 2 | 71 | 5,730 | 1% |
Our Equator Principles achievements in 2010:
- Developed standard Terms of Reference for clients to use when hiring consultants for EP due diligence to ensure that due diligence is fit for purpose
- Strengthened training and awareness programmes for our staff in project finance, credit and legal functions, emphasising our commitment to raise the bar on E&S performance to international levels, over and above local standards and regulations
- Developed a system of collating greenhouse gas (GHG) emission data for our power projects, paving the way for a better understanding of the GHG profile of Standard Chartered’s power project financing