Full Name of Submitter

Day Month Year

Submission Date 19 2017

Institution Name

Country

Region

Day Month Year

Adoption Date 3 2013

Reporting Period

Hyperlink to Public Reporting

I, Alok Dayal

INSTITUTION DATA

India

authorises me to submit 'Data & Implementation' reporting on their behalf for publication on the Equator Principles Association website.

, confirm that IDFC Bank Ltd.

By submitting the data in this form, I confirm that the Equator Principles Association shall not be held responsible for the accuracy or completeness of the

data submitted and shall not be liable under any circumstances for how or for what purpose website users interpret and apply the data.

2016-2017

June

TERMS & CONDITIONS

December

Alok Dayal

Asia

IDFC Bank Ltd.

I am also authorised to submit 'Project Name Reporting for Project Finance' data (where client consent for disclosure has been received) for publication on

the Equator Principles Assocation website. As required by the Equator Principles Association Governance Rule 6) e), I also submit justifications for non-

disclosure of project names (as applicable) on the understanding that it will be recorded by the Equator Principles Asssociation Secretariat and only

published on the Equator Principles Association website in summary fashion.

IMPLEMENTATION REPORTING

ENVIRONMENT & SOCIAL POLICY FRAMEWORK

1. BACKGROUND

IDFC Ltd. came into existence in the year 1997 based on the recommendations of the

Government of India’s (GoI) Expert Group on Commercialization of Infrastructure Projects under

the chairmanship of Dr. Rakesh Mohan. IDFC Ltd. became India's leading integrated

infrastructure finance player providing end to end infrastructure financing and project

implementation services, its growth being driven by the substantial investment requirements of

the infrastructure sector in India combined with the growth in the Indian economy over the years.

The Reserve Bank of India (RBI) on February 22, 2013 issued the Guidelines for Licensing of New

Banks in the Private Sector (“RBI New Banks Licensing Guidelines”) and granted banking license

to IDFC Bank Ltd. on 23rd July 2015. All lending activities carried out by IDFC Ltd. are transferred

to IDFC Bank vide scheme of arrangements for demerger dated 13th July 2015. IDFC Bank

started its operations from 1st October 2015.

2. IDFC BANK’S COMMITMENT TO ENVIRONMENT

Over the past few decades, there is increasing awareness and sensitivity towards addressing

environment and social impacts by stakeholders for various reasons IDFC Bank firmly believes

that a proper environmental and social management system in an organisation helps to alleviate

such impacts.

IDFC Bank commits and mobilizes capital into a variety of companies and projects, including

those in the infrastructure sector, manufacturing and services sector and extractive industries

that may be associated with environmental and social impacts and risks. Before making a

financing decision, it carefully assesses the extent of these impacts and associated risks and

work with its clients to apply a clearly defined set of environmentally and socially responsible

policies consistent with leading international standards and good practice.

IDFC Bank recognizes that time and cost overruns caused due to delay in regulatory approval,

land acquisition, social unrest and litigation among others could impact its asset quality and,

therefore, needs to be adequately addressed. IDFC Bank’s Environment and Social Policy along

with commitment to Equator Principles guidelines paves the way for a thorough Environment and

Social risk assessment of companies and projects at time of credit appraisal and monitoring of

environmental performance throughout its loan period.

IDFC Ltd. adopted the Equator Principles on 3rd June 2013. It was the first Indian financial

institution to do so. The Equator Principles are a credit risk management framework for

identifying, assessing, and managing environmental and social risk in project finance. The

Project finance businesses of IDFC Ltd. have been subsumed into IDFC Bank and, therefore,

IDFC Bank will follow Equator Principles for its project finance transactions. IDFC Bank’s rigorous

E&S policy along with its commitment to the Equator Principles shall serve as a solid foundation

for screening transactions, advising our clients and promoting innovative & environmentally

sound ways of doing business.

3. ENVIRONMENTAL & SOCIAL POLICY STATEMENT

IDFC Bank recognises that our operations have indirect and direct impacts on environment. The

purpose of the Environment policy is to create a framework for understanding and managing our

indirect and direct environmental impacts, risks and opportunities.

Our objective is to:

To review and monitor transactions of Wholesale Banking (large corporate and mid-

market), Bharat Plus Banking (SMEs and MSMEs) and Bharat Banking (rural banking)

covered by E&S Policy throughout the loan tenure

To strengthen environmental risk management process and reduce the risk arising from

E&S issues in our portfolio so that we can better manage the cost and associated risk of

doing business and enhance long term shareholder returns.

4. SCOPE

The Policy covers the operations of the Wholesale Banking, Bharat Plus Banking and

Bharat Banking businesses of IDFC Bank.

5. ENVIRONMENT AND SOCIAL POLICY

The environment and social policy of IDFC Bank is as follows:

E&S conformance by the client as per Equator Principles/

applicable national legislative requirements

Adequacy of environment and social documents developed

for the transaction / project

Identification and assessment of E&S Risks associated with

the transaction

Monitoring and review of E&S performance of the

transaction / project

Managing E&S risks in

IDFC Bank

Engage our customers, stakeholders on mainstreaming E&S Risk management

Ensure our lending is made to environmentally sustainable, socially acceptable and

economically viable projects;

Ensure environmental and social safeguards as defined by the applicable Indian

legislation and The Equator Principles are complied with by all transactions;

Ensure a project’s environmental and social risks are properly addressed throughout the

loan tenure;

Integrate environmental risk in our internal risk management analysis

Influence interested parties to carry out environmentally and socially responsible

businesses and contribute to overall goal of sustainable development;

Ensure transparency in IDFC Bank’s EMS&P activities.

Manage and reduce IDFC Bank’s impact on the climate through optimizing its internal

operations, and as part of its business in its services and products

6. ORGANIZATION AND RESPONSIBILITY

Environment and

social risk

management process

at IDFC Bank is driven

by Environment Risk

Group (ERG) team

and ERG Head under

the aegis of Chief Risk

Officer (CRO) and

overall guidance of

the Founder MD and

CEO (Figure 1).

Figure 1: Organizational Responsibility

Founder MD & CEO

7. RESOURCES AND CAPABILITIES

The ERG of IDFC Bank is primarily responsible for ensuring adherence to environment and social

policy by various business verticals of IDFC Bank including wholesale banking, bharat plus

banking and Bharat banking. The ERG consists of three environmental professionals with

qualifications in Environmental sciences, Environmental Planning and Environmental

Management and more than 16 years of experience of having worked in infrastructure and

industrial projects in various capacities.

Environment Executives (EE) of the ERG will have oversight on environmental and social issues

of the project/ transactions. ERG Head will ensure that these procedures are implemented for

each project and that records of environmental reviews are maintained. The responsibilities of

EE include:

At the due diligence stage, review and evaluate Environment Category A and Category

B projects’/ transactions’ environmental compliance with applicable national regulatory

and EP requirements.

ERG EE will ensure that all investments decisions are supported by appropriate E&S due-

diligence documentation required for appraisal note of the projects/ transactions.

Monitoring and supervising Environment Category A and Category B projects/

transactions in portfolio for on-going compliances with the applicable E&S requirements

In case of any non-compliances, flag-out the issues and if required include in

environment watch-list wherein the critical and high risk cases will be presented to senior

management of IDFC Bank and Credit Risk Management Committee (CRMC).

CRO with the help of ERG head will work with management to ensure that adequate

resources have been committed for effective implementation of environment policy and

procedure of the company. Qualified external consultants shall be deputed on case to case

basis for undertaking review work. EE will maintain a list of qualified environment consultants

as applicable, who can be called upon to assist in conducting environmental reviews.

8. TRAINING, AWARENESS AND COMPETENCE

The objective of training on environmental and social risk management is to create awareness

on E&S aspects of corporate finance and mainstreaming E&S risk management in the deal

appraisal and monitoring process. To integrate E&S risk management and sensitize the internal

and external stakeholders a multi-pronged approach is planned that includes:

a) Sensitization and awareness programmes on E&S Risks,

b) Knowledge sharing workshops on emerging Environmental and social trends in

infrastructure sector, manufacturing and services sector and extractive industries.

c) Showcasing international best practices in managing E&S Risks in infrastructure sector,

manufacturing and services sector and extractive industries,

d) Participation in knowledge forums on sustainability and environmental management and

e) Interaction with peer institutions in adopting a holistic approach to enhanced E&S due

diligence and risk mitigation.

EP sensitization and awareness programs shall be conducted to ensure that the internal

stakeholders in the ESDD and ESMR process consisting of executives of corporate banking and

credit group understand and adopt procedures and practices regarding EP. Awareness on EP

and national EHS compliance among borrowers is to be inculcated through engagement with

their finance team during the deal negotiation stage and by augmenting their systems,

procedures and disclosure requirements by providing guidance on best practices in managing

environmental and social risks during the tenure of the loan.

The training and development agenda on E&S risk management is an evolving process and

based on the above template, training is to be imparted to business and credit risk executives to

ensure effective and efficient management of E&S Risk.

9. IDFC BANK’S ENVIRONMENTAL MANAGEMENT SYSTEMS AND PROCEDURES

IDFC Bank’s E&S policy along with the management systems and procedures enunciated in this

manual will guide the overall businesses by providing an E&S framework that incorporates the

National regulatory frameworks and the Equator Principles. EMS&P for IDFC Bank has been

formulated to reflect the requirement of wholesale banking, bharat plus banking and Bharat

banking. The systems and procedures are further elaborated in subsequent sections.

10. IDFC BANK’S EXCLUSION LIST

IDFC Bank has developed and adopted an exclusion list comprising of sectors in which IDFC

Bank will not engage in any financing activity. The exclusion list includes the following:

Production or activities involving harmful or exploitative forms of forced labour1.

Production or activities involving harmful or exploitative forms of child labour2.

Illegal logging.

Production or trade in any product or activity deemed illegal under host country laws or

regulations (including those ratified by host countries under international conventions and

agreements) (such as pharmaceuticals, pesticides/herbicides, ozone depleting

substances, PCBs, etc.)

1 Forced labour means all work or service, not voluntarily performed, that is extracted from an individual under threat of force

or penalty.

2 Harmful child labour means the employment of children that is economically exploitative, or is likely to be hazardous to, or

interfere with, the child’s education, or be harmful to the child’s health, or physical, mental, spiritual, moral, or social

development

Gambling, casinos and equivalent enterprises3

The production or trade in biological and chemical weapons

Production or trade in wildlife or products regulated under CITES (the Convention on

International Trade in Endangered Species of Wild Fauna and Flora).

Drift net fishing in the marine environment using nets in excess of 2.5 km in length.

11. SENSITIVE SECTORS

For the purpose of financing activities, IDFC Bank has identified two sensitive sectors, which

have potentially high impacts on the environment and communities, and where IDFC bank may

have to deal with critical E&S related issues. IDFC bank has identified the following as sensitive

sectors:

1) Defence sector

2) Nuclear Power Generation

All sensitive sector projects/ transactions irrespective of environmental categorisation will be

referred to ERG by the business team for review and opinion. Environment Category A and

Category B projects/ transactions in sensitive sectors will undergo E&S screening and review as

per the procedures defined for wholesale banking, bharat plus banking and bharat banking,

12. POSITION STATEMENT ON SENSITIVE SECTORS

Position statements explain IDFC Bank’s position and approach towards addressing national

laws and regulatory framework, the Equator Principles requirement as applicable, international

conventions and ESG risks associated with financing companies/ projects in sensitive sectors.

13. ENVIRONMENT AND SOCIAL MANAGEMENT SYSTEM

IDFC Bank’s environment and social management system (ESMS) comprises of the following

procedures wherein ERG undertakes project/ transactions specific analysis and identifies

specific environmental aspects and the corresponding environmental impacts, risks and their

mitigation measures.

14. PROJECT CATEGORIZATION

IDFC Bank categorises project/ transaction for their environmental impact at the due diligence

stage. The categorization of project/ transaction as either Category A or B or C is based entirely

on the extent of impacts and not on type of the sector or project and is in accordance with the

environmental and social screening criteria of the International Finance Corporation (IFC). The

3 This does not apply to project sponsors who are not substantially involved in these activities. "Not substantially involved"

means that the activity concerned is ancillary to a project sponsor's primary operations.

following basis will be used at IDFC to classify projects/ transactions as either Category A or B

or C:

Category A – Use of proceeds is expected to have significant adverse environmental and social

risks and/or impacts that are diverse, irreversible or unprecedented;

Category B – Use of proceeds is expected to have limited adverse environmental and social risks

and/or impacts that are few in number, generally site-specific, largely reversible and readily

addressed through mitigation measures; and

Category C – Use of proceeds is expected to have minimal or no adverse environmental and

social risks and/or impacts.

15. ENVIRONMENT AND SOCIAL DUE DILIGENCE AND MONITORING OF PROJECTS

AND TRANSACTIONS

In line with IDFC Bank’s Environment Policy objectives, ERG conducts environment risk

assessment of projects/ transactions at two stages as described below:

i. Environment and Social Due Diligence (ESDD)

ERG undertakes Environment and Social Due Diligence (ESDD) of Projects prior to sanction to

ensure the project have adequately identified the E&S risks and designed the environmental

management practices commensurate with the project phase - construction or operational

phases - in line with the requirements of applicable Indian Environmental Legislations and the

Equator Principles. ESDD includes a review of E&S documents and identification of issues to be

addressed by the project proponent, project site visits to verify E&S information provided,

appointment of independent consultants to assess compliance with Equator Principles (for high

risk category projects), a review of applicable EP and regulatory requirements, E&S appraisal

and preparation of ESDD report. IDFC Bank stipulates specific loan covenants to mitigate

Environment risks associated with the project.

ii. Environment and Social Monitoring & Review

ERG also undertakes Environment and Social Monitoring & Review (ESMR) of Category A and

Category B portfolio projects after sanction to monitor and ensure compliances to the

requirements of applicable Indian Environmental Legislations, Equator Principles and E&S

related loan covenants on an ongoing basis. Our ESMR process includes a review of the national

regulatory and E&S loan covenant compliances, project site visits to verify Environment, health,

safety and social performance, labour amenities and environmental emission levels with respect

to the National as well as the EP Standards and identification of any latent or emergent E&S

issues and risks. This entire process is documented in an ESMR report prepared as part of our

annual review of our porfolio projects.

Figure 2 shows the integration of E&S due diligence and monitoring in the credit appraisal and

review process.

Figure 2: Integration of E&S due diligence and monitoring process

Compliance

check w.r.t ESDD

conditions

Total number mandated in the reporting period 11

Automatically Generated

Sector Total

Mining 0

Infrastructure 0

Oil & Gas 0

Power 11

Others

Sub Total 11

Region Total

Americas 0

Europe, Middle East & Africa 0

Asia Pacific 11

Sub Total 11

PROJECT FINANCE ADVISORY SERVICES

VERIFICATION MESSAGE

Great! Your sub totals match, you can move on

to the next tab.

Category A Transactions Great! Your sub totals match.

Total number that reached financial close in the reporting period 11 Category B Transactions Great! Your sub totals match.

Automatically Generated Category C Transactions Great! Your sub totals match.

Sector Category A Category B Category C

Mining 0 0 0

Infrastructure 0 0 0

Oil & Gas 0 0 0

Power 0 11 0

Others 0 0 0

Sub Total 0 11 0

Region Category A Category B Category C

Americas 0 0 0

Europe, Middle East & Africa 0 0 0

Asia Pacific 0 11 0

Sub Total 0 11 0

Country Designation Category A Category B Category C

Designated Country For the list of Designated Countries, go to:

Non-Designated Country (Automatically Generated) 0 11 0 http://www.equator-principles.com/index.php/ep3/designated-countries

Sub Total 0 11 0

Independent Review Category A Category B Category C

Yes

No (Automatically Generated) 0 11 0

Sub Total 0 11 0

Total Number of Category A Projects 0

Total Number of Category B Projects 11

Total Number of Category C Projects 0

PROJECT FINANCE TRANSACTIONS

VERIFICATION MESSAGE

Automatically Generated

Automatically Generated

If you have checked your data, and have corrected any mistakes (if highlighted above), you can move

on to the next tab.

Independent Review Great! All of your Category A transactions were subject to an Independent

Review.

Automatically Generated

DESIGNATED COUNTRIES

Designated Countries (previously named High-Income OECD Countries) are those countries deemed to

have robust environmental and social governance, legislation systems and institutional capacity

designed to protect their people and the natural environment.

Category A Transactions Great! Your sub totals match.

Total number that reached financial close in the reporting period 0 Category B Transactions Great! Your sub totals match.

Automatically Generated Category C Transactions Great! Your sub totals match.

Sector Category A Category B Category C

Mining 0 0 0

Infrastructure 0 0 0

Oil & Gas 0 0 0

Power 0 0 0

Others 0 0 0

Sub Total 0 0 0

Region Category A Category B Category C

Americas 0 0 0

Europe, Middle East & Africa 0 0 0 For the list of Designated Countries, go to:

Asia Pacific 0 0 0 http://www.equator-principles.com/index.php/ep3/designated-countries

Sub Total 0 0 0

Country Designation Category A Category B Category C

Designated Country 0 0 0

Non-Designated Country (Automatically Generated) 0 0 0

Sub Total 0 0 0

Independent Review Category A Category B Category C

Yes 0 0 0

No (Automatically Generated) 0 0 0

Sub Total 0 0 0

Total Number of Category A Projects 0

Total Number of Category B Projects 0

Total Number of Category C Projects 0 Automatically Generated

If you have checked your data, and have corrected any mistakes (if highlighted above), you can move

on to the next tab.

VERIFICATION MESSAGE

PROJECT-RELATED CORPORATE LOANS

Automatically Generated

Automatically Generated

Designated Countries (previously named High-Income OECD Countries) are those countries deemed to

have robust environmental and social governance, legislation systems and institutional capacity

designed to protect their people and the natural environment.

DESIGNATED COUNTRIES

No.

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

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25

26

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28

29

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31

32

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64

65

66

67

68

69

70

71

72

73

74

75

Number of transactions that could not be disclosed due to applicable local laws and regulations.

Number transactions for which the EPFI received client consent to disclose the project name.

Sector

Power

Power

Power65 MW SOLAR PV BASED POWER PROJECT - ASTRA SOLREN PRIVATE LIMITED

PROJECT FINANCE TRANSACTIONS THAT RECEIVED CLIENT CONSENT FOR DISCLOSURE

3

8

0

0

Automatically Generated

2016

VERIFICATION MESSAGE

Host Country Name/Project

Location

India

India

PROJECT FINANCE TRANSACTIONS (CONSENT RECEIVED & JUSTIFICATIONS FOR NON-DISCLOSURE TOTALS)

11

Calendar Year of

Financial Close

2016

2017

India

Great! You have submitted sufficient data and/or

justifications for non-disclosure for all of the

transactions reported in tab 4 'Project Finance

(PF)'.'

Total number of transactions that reached financial close as per tab 4 'Project Finance (PF)'.

Number of transactions for which the EPFI did not receive client consent.

Automatically Generated

Number of transactions that could not be disclosed due to increased liability for the EPFI in a certain jurisdication.

Project Name (as per the loan agreement/publicly recognised)

148.9 MW WIND POWER PROJECT- MYTRAH VAYU (TUNGABHADRA) PRIVATE LIMITED (MVTPL)

140 MW SOLAR PV BASED POWER PROJECT - SOLAIRE SURYA URJA PRIVATE LIMITED