For most refining and petrochemical expansions, Equator Principles (EPs) have become an increasingly important variable in the ability to obtain financing. EPs have stood the test of time, evolving since their inception in 2003. The original 10 commercial banks agreeing to lend to projects complying with these principles have now become almost 70 Equator Principle Financial Institutions (EPFIs). Along with this growth in EPFIs, the EPs themselves have evolved to take account of many stakeholder concerns and emerging environmental and social issues. This evolution has, and will, improve the effectiveness of the EPs and the way they are implemented. Some of the changes are secondary and rely on, for example, the revision of the IFC Sustainability Principles that will address a more prescriptive approach to Climate Change, Biodiversity, Human Rights Impacts and Consultation. Changes include the establishment of Rules for the EPFIs that have addressed a number of key issues including transparency (whilst avoiding the breaching of Competition Laws) and reporting. The wide scope of the EPs lends them open to criticism but they have made a major contribution to global sustainable development. However, despite the evolution of the EPs in response to various pressures, are they as effective as they could be? This paper identifies the strengths and weaknesses of the EPs and uses case studies and recent project understanding and experience to examine how the EPs will affect future project finance in the global oil and gas sector. Issues of particular focus include: the need for consistency of EP application across and within both the EPFIs and Borrower organisations; the emergence of the need for Impact Assessment in new areas such as Climate and Human Rights; the more effective management of consultation; and remedial actions to bring projects back into EP compliance, particularly during construction and operation.

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