Paris Agreement is the instrument under the United Nations Framework Convention on
Climate Change adopted on 12 December 2015 and which entered into force on 4 November
2016 (UNFCCC Dec 1/CP.21 (2015) UN Doc FCCC/CP/2015/10/Add.1).
A Project is a development in any sector at an identified location (the location does not need
to be contiguous – a Project may be located over one or more geographic areas). It includes
an expansion or upgrade of an existing operation. Examples of Projects that trigger the
Equator Principles include, but are not limited to; a power plant, mine, oil and gas Projects,
chemical plant, infrastructure development, manufacturing plant, large scale real estate
development, real estate development in a Sensitive Area, or any other Project that creates
significant environmental and/or social risks and impacts. Projects can include new
developments, expansions, or upgrades both in greenfield areas or previously developed
areas. In the case of Export Credit Agency supported transactions, the new commercial,
infrastructure or industrial undertaking to which the export is intended will be considered the
Project.
Project Completion is the date at which a Project has been finished, functions, and performs
according to certain pre-defined measures (usually defined in a completion test). After this
date the Project's cash flows become the primary method of repayment.
Project Development Lifecycle is the overall process of developing and executing a Project. It
includes the design and planning, construction, production, closure, decommissioning and
restoration of a Project site, as well as the procurement of supplies, permissions, permitting
and licensing, and financing and repayment. Indicatively, the lifecycle can range from one
year for simple Projects to 15 years (or longer) for larger Projects.
Project Finance is a method of financing in which the lender looks primarily to the revenues
generated by a Project, both as the source of repayment and as security for the exposure.
This type of financing is usually for large, complex and expensive installations that might
include, for example, power plants, chemical processing plants, mines, transportation
infrastructure, environment, and telecommunications infrastructure. In such transactions,
the lender is usually paid solely or almost exclusively out of the money generated by the
contracts for the Project’s output, such as the electricity sold by a power plant. The client is
usually a special purpose vehicle that is not permitted to perform any function other than
developing, owning, and operating the installation. The consequence is that repayment
depends primarily on the Project’s cash flow and on the collateral value of the Project’s assets.
For reference go to: “Basel Committee on Banking Supervision, International Convergence of
Capital Measurement and Capital Standards ("Basel II")”, November 2005. Reserve-Based