Lender Compliance, Due Diligence and Gap Analysis
Loans from international finance institutions (IFI) such as the World Bank, International Finance Corporation (IFC), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB), Asian Development Bank and African Development Bank are subject to strict environmental and social performance criteria being met and maintained by the project. Private lending banks have also adopted the Equator Principles or other standards similar to those of the IFIs.
RSK has extensive experience of gap analysis with lender requirements. The company has worked directly for lenders and their borrowers in developing supplementary lender information packages (SLIP), environmental and social action plans (ESAP), and disclosure packages (non-technical summary and stakeholder engagement plans), and providing ongoing support for implementation (environmental and social management systems and plans, and construction phase monitoring).
Our audit and due diligence processes provide lenders and borrowers with the confidence that risks are fully understood and that lender requirements will be met.
Understanding the risks and liabilities: Gap analysis
RSK provides gap analysis reports identifying any areas of non-compliance and clearly assessing the significance and associated risks that any gaps pose to the lenders and borrowers.
To do this, RSK bring together in-house, multidisciplinary teams to evaluate compliance with the environmental, biodiversity and social (including land access and resettlement, human rights, labour and occupational health and safety) elements of the performance requirements.
Common gaps with lender requirements encountered by our specialists include informed consultation with affected communities and vulnerable groups, critical habitat screening and land acquisition, and livelihood and resettlement issues.
Finding pragmatic solutions: SLIPS and ESAPs
Once gaps are understood, our experienced team will define clear actions to fill them that are practical, workable and cost-effective, while protecting the lender interests and enabling the borrower to move forward with the project.
Depending on the risk assessment, this is usually presented as an ESAP and, if needed, a SLIP.
Where appropriate, we either facilitate or undertake the corrective actions required, which can include: execution of additional consultation, undertaking critical habitat assessment, additional biodiversity surveys, physical modelling, developing livelihood restoration and resettlement action policy frameworks and plans, and developing the formal disclosure package (stakeholder engagement plan and non-technical summary).
Ultimately, we understand that different clients need different things. We concentrate on sticking to the programme, alerting clients to problems as early as possible, and being pragmatic and proportionate.
Support for borrowers and lenders during implementation
Our team understand the realities of the construction industry and provide a pragmatic approach to the implementation of the ESAP and other lender conditions.
During detailed design, construction and operation we prepare environmental and social management plans and systems.
On behalf of the borrower, we provide environmental and social monitors tasked with ensuring and demonstrating ongoing project compliance.
On behalf of the lender, we undertake audits during construction to assess and verify compliance with all lender requirements.
A worldwide reach
Our network of local RSK offices and trusted associates and partner companies around the world enables us to deliver projects in most locations to international standards while also complying with national standards and local content requirements.
Our international capability is clearly visible in the range of languages in which we can work: English, French, Italian, Dutch, Spanish, Arabic, Russian, Azerbaijani and Kazakh. We know that it is important to understand the bigger picture and the context in which the project exists. We have worked hard to build good relationships with our clients and finance organisations so that they can trust that we will carry out the work with everyone’s best interests in mind.