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Assessing risks in project finance

Assessing risks in project finance

To showcase its leadership in the Asian market, Cathay United Bank (CUB) wanted to become the first Taiwanese bank to implement the Equator Principles (an international framework to assess environmental and social risks in the finance of large infrastructure and industrial projects).

The bank faced two key challenges. Firstly, knowledge to manage environmental and social risks among its employees was limited. Secondly, the bank needed a more comprehensive process to evaluate environmental and social risks in finance opportunities, in order to comply with the Equator Principles.

KPMG in Taiwan worked with the bank to design a new evaluation process that categorized projects into risk groups aligned with the Equator Principles and helped the bank embed it in its IT system. Subsequently, KPMG designed and implemented a training program to improve employees’ knowledge of environmental and social risks and enable them to apply the Principles in their lending decisions.

As a result, CUB completed the first project finance case in Taiwan to follow the Equator Principles and is now using the Principles to establish CUB’s sustainable finance policy.

For more information, please contact:

Niven Huang, KPMG in Taiwan

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