Reporting – Access Bank Plc (2019)

Adoption Date:4 June 2009
Country of Headquarters:Nigeria
Region of Headquarters:Africa
Institutional Reporting Hyperlink:https://www.accessbankplc.com/pages/sustainable-banking/Our-Reports-and-Publications.aspx
Current EPFI Reporting Year/Period:2019
EPFI Reporting in Compliance:Yes

Please read the important notes and disclaimer for further information on ‘EPFI Reporting’, compliance and publication on the Equator Principles Association website.

Further information on this EPFI may be obtained through the Institutional Reporting Hyperlink above.

PROJECT FINANCE ADVISORY SERVICES

Total number mandated in the reporting period: 0

PROJECT FINANCE TRANSACTIONS

Total number that reached financial close in the reporting period: 2

Totals200
Totals200
SectorCategory ACategory BCategory C
Mining
Infrastructure
Oil & Gas2
Power
Others
Region
Americas
Europe, Middle East & Africa2
Asia Pacific
Country Designation
Designated1
Non-Designated2
Independent Review
Yes
No2

1Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment. For the list of Designated Countries, go to: https://www.equator-principles.com/index.php/ep3/designated-countries

PROJECT NAME REPORTING FOR PROJECT FINANCE TRANSACTIONS

No.Project NameSector Host Country Name/ Project LocationYear of Financial Close
1NEWCROSS EXPLORATION AND PRODUCTION LTDOil & GasNigeria2019
2BESTAF TRADING CO. LIMITEDOil & GasNigeria2019

PROJECT-RELATED CORPORATE LOANS

Total number that reached financial close in the reporting period: 4

Totals040
Totals040
SectorCategory ACategory BCategory C
Mining
Infrastructure2
Oil & Gas2
Power
Others
RegionCategory ACategory BCategory C
Americas
Europe, Middle East & Africa4
Asia Pacific
Country DesignationCategory ACategory BCategory C
Designated1
Non-Designated4
Independent ReviewCategory ACategory BCategory C
Yes
No4

1Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment. For the list of Designated Countries, go to: https://www.equator-principles.com/index.php/ep3/designated-countries

IMPLEMENTATION OF THE EQUATOR PRINCIPLES

Access Bank’s Implementation of the Equator Principles

Access Bank adopted the Equator Principles in 2009, to create a risk management framework for identifying, assessing and managing environmental and social risks in projects we finance. Access Bank is strongly committed to managing environmental and social risks inherent in our lending activities. Our approach to environmental and social risk management is based on a combination of policy, local legislation and global standards and guidelines. The Bank conducts Environmental and Social Due Diligence on all potential project finance transactions in line with the Equator Principles as well as the IFC’s Performance Standards.

Access Bank has a dedicated Sustainability & Environmental and Social Risk Management (ESRM) Team. The Sustainability & ESRM Team is comprised of 14 members of staff with requisite skillset and experience that currently implement the Environmental and Social Management System (ESMS) procedure and by extension Equator Principle implementation. Staff have requisite academic qualification in Environmental science / Engineering e.g BSC in Environmental Management/Toxicology and Environmental Sciences.

The Head, Sustainability and Head, Environmental &Social Risk Management are responsible for the implementation of the Bank’s strategic thrust to ensure environmental and social risk considerations according to global best practices are integrated in the Bank’s credit risk architecture. Other roles and responsibility include: training and development of staff, creating awareness of environmental and social risk that may be material to the Bank’s business activities, providing support to strategic business units (SBUs) and Legal teams from an environmental advisory perspective; control of budget and expenditure for the environmental team and environmental enterprise wide risk management.

To demonstrate our commitment to environmental considerations in project finance, we are the first financial institution in Nigeria to deploy a customized Sustainable Finance toolkit (developed in conjunction with PwC) that helps us screen projects to identify potential environmental and social consequences. Market facing members of staff are trained and retrained on the business case of embedding sustainability and E&S Risk management into the credit lifecycle of customers, environmental and social risks and impacts on balance sheet, climate change etc. They also receive regular training through direct engagement, presentations and internal newsletters.

Access Bank’s commitment to integrating Environmental and Social Risk Management into our business activities has garnered both local and international recognition. The Bank emerged winners of over 15 National and International awards in 2018, which affirms the Banks leadership in the implementation of Environmental and Social Management System. The Bank, on the back of its strong Sustainablity and Environmental and Social Risk Management System, successfully issued Africa’s premiere Climate Certified Corporate Green Bond.

Access Bank’s Environmental and Social Risk Management Policy

Access Bank applies the Equator Principles for enhanced due diligence on large-scale oil and gas, agriculture, mining and power projects exceeding USD10million in our Investment and Commercial Bank portfolio. This requires an assessment of the E&S risks associated with the projects asset and the client’s commitment, capacity and track record in managing E&S risk issues.

Access Bank’s ESRM procedures comprise of five distinct phases for the management of E&S risks that emerge in our project finance activities. These phases are:
• E&S Screening
• E&S Risk Assessment
• Decision and Documentation
• Monitoring; and
• Reporting

Environmental and Social Screening

In line with our procedure, an initial screening exercise is conducted on the project by our Account Officer using the bank’s sustainable finance toolkit. The toolkit is used to check the project in line with the exclusion list as contained in our ESMS. Upon substantiation that the project does not fall under our Exclusion List; the project is reviewed.

Access Bank requires an Environmental and Social Impact Assessment (ESIA) report (duly prepared by an independent external consultant) for all projects we finance. Valid permits and licenses are also obtained to ensure that the project is in compliance with local laws and regulation

Environmental and Social Risk Assessment

Under this process, the E&S risk issues identified in the project are categorised based on due diligence and independent assessment of the project. Due diligence visits are conducted and Corrective action plans are agreed and put in place to mitigate all identified E&S risk issues. Access Bank’s Environmental and Social Risk Management Team as well as Projects and Structured Finance Team effectively supervise this process.

Decision and Documentation

In line with our review and the extent of compliance with environmental and social issues on the project, certain requirements, conditions precedent and subsequent to disbursement as well as affirmative and negative covenants for the project are incorporated into the facility documentation. Affirmative covenants include implementation of the agreed Environmental Management Action Plan; while negative covenants include not financing activities that fall within the Bank’s exclusion list.

Monitoring

The main Objective of this procedure is to clearly identify procedures for managing post-loan disbursement compliance with agreed E&S conditions and timelines.

In case an obligor has declined to oblige agreed E&S terms and conditions in the offer letter, the following shall become applicable;

a. A reminder notice shall be sent by the ESRM/applicable Relationship Manager (RM) managing the relationship within 30 days of missing deadline/activity.
b. Reminder notice shall be sent in writing by the ESRM/applicable RM to the obligor requesting explanation for the missed deadline/activity after 30days of the first notice in the event of non-performance.
c. The E&S Risk Manager has an obligation to submit a report on obligor who have not complied after the second reminder notice to the CRO/Executive Management.
d. In the event that the non-compliance does not show satisfactory improvement after 24 months, at the instance of Executive Management based on the E&S Manager’s recommendation.
e. The Bank may call in this facility if all remediation procedure is exhausted when dealing with the client on this specific matter.

Reporting

In line with the Banks adoption of the Equator Principles, and being a member of the Equator Principles Financial Institution, projects are regularly reported in our Equator Principles report.