The ‘Greening’ of Project Finance : Is this a Viable ‘Project’?

This paper will analyze the way whereby the notion of sustainable development is incorporated into the field of Financial Law, Banking Law and Company Law. This takes place mainly by soft law means. The various Financials Institutions (FIs) and companies have an important impact on sustainable development, not directly but indirectly through the loans, the investments, the guarantees, and the project financing which they offer to various enterprises. It is well-known that many companies need the financing of banks and other FIs in order to expand their business activities and to complete various technical projects. The responsibility for the environmental pollution arising from the business activities of these companies could be partly shared with their financiers. Hence, the areas of law mentioned above must provide the necessary safeguards that financing and other investments would not be granted to companies or construction projects which could possible have an adverse impact on environment. The Equator Principles (EPs) play an important role towards the achievement of this goal. The EPs are a code of conduct which was drawn up under the auspices of the World Bank group and which is adopted voluntarily by banks and other FIs which grant loans and other methods of financing to companies and projects of developing countries. The developing countries rely more on project financing than the developed countries which own the necessary capitals; thus, the adoption of these principles by the investment banks is very important for the environmental protection in the developing countries