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Prepared by Arab African International Bank

ARAB AFRICAN INTERNATIONAL BANK

5th ANNUAL EP REPORT APRIL 2015

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Prepared by Arab African International Bank

Claiming Statement:

This Equator Principles Report is covering AAIB project lending operations between the

period November 2014-onwards (continuous projects). This is emerging from AAIB’s

keenness on complying with the EP governance and annual reporting rules

INTRODUCTION

In 2003, Arab African international Bank has spontaneously started giving back to the community,

targeting health & education as main pillars for development in Egypt. With baby steps, AAIB

launched the “AAIB Award” as the first competition for undergraduate students, in public and

private universities in Egypt. The competition encourages students to innovate new feasible

banking products and services. It also aims at bridging the gap between academia and practice in

banking sector. Within

The same year, AAIB has adopted Cairo University Special Pediatric Hospital “CUSPH” with

an aim to turn this hospital into a world-renowned center of excellence.

Codifying the AAIB practice in CSR, the bank adopted the United Nations Global Compact in 2004

as guiding framework in human rights, labor rights, environment and anticorruption aspects of

the banking operations and working environment. In 2007, AAIB adopted the London

benchmarking Group for measuring business and community impact of the bank’s CSR practices.

Two years later, in 2009, AAIB adopted the Equator Principles as a method of moving from strategic philanthropy & CSR organization to a Sustainable Bank.

AAIB is the first and only bank in Egypt &

Second in the MENA Region to adopt the EP in

2009

In 2009, Arab African International Bank (AAIB) subscribed to the Equator Principles (EP) to

broaden its project lending assessment to incorporate social and environmental risks within its

credit and project lending core business operations. The Equator Principles are of voluntary

standards designed to assist banks identify and manage social and environmental risks associated

with direct financing of large infrastructure projects in excess of USD 10 Million.

These principles serve the credit risk management framework for determining, assessing and

managing environmental and social risk in project finance transactions. Signatories are required

to evaluate the environmental and social impact of projects exceeding USD 10 (Ten) million

Dollars based on the policies and guidelines of the World Bank and the International Finance Corporation (IFC).

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Prepared by Arab African International Bank

Adherence to the Principles allows AAIB to work with customers on the management of

environmental and social policy related issues to their investments.

To comply with the EP, AAIB has established internal guidelines in 2010, to evaluate the

environmental and social risks associated with the projects financed by the bank.

During October and November 2009, AAIB took leap steps in working internally through educating and training our corporate and risk staff, whilst also creating awareness externally to other financial intuitions to start taking the initiative of financing projects while taking in consideration environmental and social risk assessment.

Implementing the Equator Principles on projects

financed by the bank is carried out through AAIB’s

specific environmental and social risk policies and

procedures in respect of the Principles.

The policies and procedures outlined the detailed manner in which AAIB corporate finance

projects will abide by the Equator Principles. The procedures also identified how the

responsibilities, in the implementation of these principles, were apportioned between various

departments concerned and committees, where applicable.

Because AAIB understands the seriousness of the environmental crisis and the detrimental consequences of climate change, the bank is committed to promoting green finance and achieving industry impact by supporting environmentally/socially-sound projects and investing in Green economy developments.

The Table below shows the AAIB finances according to EP between November 2013 until April 2015.

AAIB successfully trained 70% credit

and risk staff

Members and managers to best

apply these principles.

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Prepared by Arab African International Bank

Company Name Project Name Category Agent Bank Consultant

Report

Calendar

(transaction

reached

financial close)

Sector Host

Country

Name

Palm Hills for

Development

Palm Hills for Development C AAIB On Hand 2014 Real Estate Egypt

Upper Egypt

Electricity

Production

Company

Project one: South Helwan

Project Two: Assuit

A* National

Bank of Egypt

On Hand 2015 Electricity Egypt

Egyptian

Chemical

Industries

Company

Project Name: KIMA A National

Bank of Egypt

On Hand 2015 Fertilizers Egypt

(Aswan)

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Prepared by Arab African International Bank

AAIB HAS JOINED

THE EQUATOR

PRINCIPLES

OUTREACH

WORKING GROUP

FOR AFRICA

AND MIDDLE EAST

IN 2012

Members: AAIB, ABSA, Barclays, BMCE,

Credit Agricole CIB, First Rand, Societe Generale, Standard Bank

These Sub-working Groups develop and

implement strategies to communicate,

support and train, in cooperation with

multilateral institutions and development

agencies/banks, other financial institutions

in all regions of the world, which undertake

project finance and could benefit from adopting the EPs (ongoing).

FIRST PLATFORM TO

PROMOTE

SUSTAINABLE

FINANCE IN EGYPT

In the year 2013, Arab African International

Bank has celebrated a decade of

sustainability; ten years of various practices,

maturing from Strategic Philanthropy

towards Sustainable Banking & Finance.

Throughout this decade, AAIB has

experienced a long learning journey of

practices that acted as ongoing gap analysis

to guide future-maturity within its

sustainability practice.

This journey of sustainability has polarized

into Mostadam, the first platform for

Sustainable Finance in Egypt and the MENA

Region. Mostadam will embrace

Sustainability into the banking operations,

aiming at Socially Responsible Banking

products in all banks in Egypt.

The platform was launched in 2014 by AAIB (funder & Co—founder), UNDP (Co-founder) and Egyptian Corporate Responsibility Center (UN Global Compact Focal point in Egypt as Managing Partner). The platform has various arms such as research, training & development, stakeholders’ management, regulatory advocacy & policies & procedures.

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AAIB & INDUSTRY ADVOCACY: MOSTADAM

VISION To empower the banking sector in Egypt to become forerunner in sustainable finance on a

global level. MISSION

Developing a national model for sustainable finance in Egypt.

MAIN OBJECTIVE

Contextualize sustainable finance through initializing a platform that advocates for

Financial Inclusion, Clean Energy Funding, Entrepreneurship, Corporate Governance; and

sustainability reporting.

GOALS

Professional Training & Bankers Dialogue

Introducing New Banking Products

Sustainability Reporting Blueprint/National Model for Sustainable Finance

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Prepared by Arab African International Bank

AAIB’S ENVIRONMENTAL ENGAGEMENT

There are many ways in which the financial sector could contribute to reducing its impact on

climate change and the environment.

AAIB has been the first bank in Egypt to measure its Carbon Footprint and publish its first report

AAIB has been the first bank in Egypt to measure its Carbon Footprint and publish its first report highlighting areas of environmental responsibility on both the organizational as well as the individual (employees) level.

Accordingly, the bank new branches are all

supported by LED light for both cost

efficiency as well as to reduce its carbon emissions and hence its footprint.

Individual Social Responsibility (ISR) is a

mission we are keen about promoting among

our employees. Engaging our staff with global

sustainability issues and planet conservation

tips is a way of educating them on how to live

sustainably. Our message was to demonstrate

how each individual has a significant role in saving the environment.

In light of the annual Earth Day (April 22nd), under the slogan, Live Sustainably, AAIB Sustainability used

innovative approaches to promote environment protection among its employees through distributing

environmentally friendly products (LED lambs, recycled bags, and a plant. In 2014, AAIB announced an

internal competition for best environment initiative. In 2015, AAIB intends to focus on energy efficiency to

reduce electricity consumption.

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Prepared by Arab African International Bank

Note:

The projects’ categorized as “A” project are according to the World Bank criterion, which is equivalent to the same category (A) under the EPs.

http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/EXTPOLICIES/EXTOPMANUAL/0,,c

ontentMDK:20064724~menuPK:64701637~pagePK:64709096~piPK:64709108~theSitePK:50

2184,00.html

Arab Investment Company was listed in 2013 report; however, the client fully settled his balances (project completed).