ECIC AR 2024 9TH

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Integrated Report 2024

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Economic and Political Outlook The global economy is still making a slow recovery from the COVID-19 pandemic taking cognisance of the impact of the Ukraine and Russia conflict which still looms large. On the African continent, sovereign governments are facing fiscal challenges, which amongst others, resulted from reprioritisation of financial resources to fund COVID-19 related expenditures in containing or managing the pandemic. ECIC has paid claims in Ghana, because of the Minister of Finance’s failure to honour its debt obligations. Ghana is currently in negotiations with its creditors seeking a debt restructuring and/or forgiveness in order to access further disbursements under the International Monetary Fund (IMF) bail-out of US$3 billion. In the first half of 2024, Ghana announced that it had reached an agreement with the country’s Official Creditor Committee to restructure its external debt with bilateral lenders while Zambia finalised its debt restructuring. Refer to the External Environment section on page 43 for more detail on the economic and political outlook of the Corporation. During the financial year the Corporation implemented its updated Environmental, Social and Governance (ESG) Policy, which is Equator Principles (4) compliant, and amongst others, addresses Climate Change issues. Furthermore, it approved the implementation plan for the ESG sustainability reporting, focusing on funds management activities and ESG activities on underwritten projects. Environmental, Social and Governance (ESG) Issues • The ECIC Board approved an ESG Sustainability Reporting Implementation Plan, which details the sustainability reporting. • ECIC has amended the ESG Policy including underwriting activities, fund management activities and social responsibility projects. • ECIC further embedded the ESG practices within its premises or corporate environment under the theme “Greening ECIC office and creating a sustainable working environment.” Highlights of the financial year under review

• A total of eight (8) new applications were screened using the Early ESG Screening Tool. Four (4) applications were from medium- and long-term insurance (MLT) and the other four (4) were from short-term insurance (STI). All those applications were screened to determine the ESG issues, impact, categorisation and mitigation measures that will be put in place to manage the identified ESG risks. • Within the existing ECIC portfolio of underwritten projects, ECIC has monitored the ESG risks and classified five (5) projects as medium risk and four (4) projects as high risk projects. These projects were reported to the Social and Ethics Committee on a quarterly basis, and provided a detailed update on the mitigation measures that were implemented by the various projects to manage the identified ESG risks. • ECIC engaged with more than 20 non government organisations on the Moz LNG project on the ESG matters that they raised. • ECIC engaged with its fund managers on the updated ESG Policy and the Exclusion List, including their reporting requirements on the implementation and compliance with the ESG Policy. ECIC’s approach to ESG sustainability reporting is a critical component of ECIC’s operation and fundamental to sustainable economic development The ECIC views sustainable development and responsible financing practices as integral considerations of its business activities and decision-making process. ECIC believes that ESG impacts need to be assessed to establish the ESG embedded risks and the mitigation measures that are implemented to manage those risks. Of importance, ECIC recognises the reputational risks associated with bad publicity emanating from supporting projects that have a negative record of dealing with ESG matters. Compliance with ESG best practices and standards influences how ECIC supports transactions. Best-practice benchmarking In setting the standards for ESG compliance, ECIC is informed by international best-practices and guidelines such as the Equator Principles; World Bank Group Environmental, Health, and Safety

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