London, 18 May 2020
In November 2019 the Equator Principles Association released the latest iteration of the Equator Principles, ‘EP4’. EP4 was due to come into effect for all EPFIs on 1 July 2020, however, we find ourselves in unprecedented times.
The Association has carefully considered how best to proceed with EP4 when many member financial institutions are facing ongoing practical challenges caused by the Covid-19 situation. In light of these challenges, the EP Association has approved a 3 month extension of the current transition period, meaning that all EPFIs must now implement EP4 by 1 October 2020.
This extension provides a short delay that allows an additional ‘grace’ period for those EPFIs not able to implement by 1 July 2020 due to the extenuating circumstances, while also ensuring that the EPA is able to push forward with implementing EP4 this year. The EPA is working to finalise guidance that will be available to support EPFIs and stakeholders to implement EP4.
Some EPFIs are already implementing EP4, and the Association continues to encourage any EPFI that is in a position to implement any time prior to 1 October 2020 to do so. All EPFIs will be required to implement EP4 on any new Projects (including term sheets or mandates) signed on/after 1 October 2020.