Environmental matters
EKN makes an assessment of the risk of negative environmental impact with a focus on the operations or project where the product is to be used.
An environmental review is part of EKN’s business risk assessment and can help to reduce both financial risk and environmental risk. Defence material transactions that require a permit from the ISP are exempted from the environmental review.
EKN’s assessment of environmental risks takes into account the impact that the target operations of the export may have on ecosystems, biological diversity and protected areas such as national parks and nature reserves. The impact on the climate is also part of the assessment.
How does EKN’s environmental impact assessment work?
- When the guarantee application is received, EKN conducts a screening to identify transactions with a significant risk of environmental impact. The screening takes into consideration, inter alia, the sector and the country applicable.
- When there is any indication of a material risk of negative impact, the application is subjected to an environmental review. The review is adapted based on the risks that are identified and the design of the financing. If necessary, EKN can request supplementary information from the borrower concerning how risks of environmental impact are managed in the operations where the equipment is to be used.
- EKN uses the IFC’s Performance Standards and the World Bank’s Environmental, Health and Safety Guidelines to evaluate whether the risk of negative impact on the environment is managed in an adequate manner.
- The transaction is given a classification based on the risk of negative impact. Category A means a risk of significant negative impact, B means a risk of some impact and C means limited or no impact. In certain cases, EKN sets environmental conditions on the guaranteed transaction and works to impact the operations or project for the target export in a positive direction.
- If EKN does not receive the information requested or if the risk of negative environmental impact is assessed as too high, EKN declines participation in the transaction.
What should you do as an exporter ahead of EKN’s environmental impact assessment?
Your application will include responses to:
- Where, how and within which industry the good/service is to be used and if the end user is any party other than the buyer
- If the end user is an existing operation or a project such as a newly established or significant expansion
- Any environmental risks and impact
- Proximity to sensitive and protected natural areas
- Any positive environmental effects
- What evaluations you have conducted as an exporter concerning environmental risks and environmental impact, or alternatively, the reasoning behind why no evaluations have been conducted
You must also provide EKN with any questions presented to the buyer.
Keep in mind
You can accelerate the process and make it easier for administration by being well prepared ahead of EKN’s assessment of environmental impact.
- Inform the buyer at an early stage that an EKN guarantee can lead to questions concerning the management of environmental risks to prepare the buyer to answer questions when EKN is involved.
- The more environmental information that EKN receives about the buyer, the quicker the environmental assessment takes.
- If any environmental risks are known, involve EKN at an early stage so that the environmental issues can be managed in parallel with other financing.
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