Environmental Protection Requirements During Advancement of Loan for Projects: The Case of Commercial Bank of Ethiopia

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The objective of this study is to offer some understanding on what the policy and legal landscape of Ethiopia look like when it comes to governing the issue of protecting the environment especially during execution of investment or some other developmental projects with financial support of Banks. The safety and sustainable management of the environment is not only one but at the heart of ensuring sustainable development, development which ensures both inter- and intra-generational aspirations.This means that it‟s one of important factors affecting decision making processes of financial institutions whenever they happen to assess loan proposals for a given project. The thesis tries to shed some light on how this makes its way in to the arrays of laws and policy schemes meant to govern viability of proposals for advancement of loans for projects. Ensuring the sustainability and environmentally- friendlynature of projects seeking bank loans is, just one of numerous tools used to assess credit worthiness of projects. The paper is focusing on the availability of both legal and policy instruments to ensure the safety of the environment before loans are advanced for a given project work. And it also tries to shed some light on how seriously banks are supposed or expected to abide by such legal and policy schemes. Environmental Impact Assessment has now become one of the buzz words whenever and whenever there is an agenda or discourse about sustainable development. Ethiopia is one of numerous least emerging economies in the world and one of poorly performing states in the Sub-Saharan Africa in terms of achieving comprehensive development: both the legal and policy environment is quite known to be underdeveloped.Both the government and other institutions involving in the process adopt and apply deregulatory schemes which are ever projecting downwards so as to attract as many investors as they manage. The race is down to the bottom, where there are hardly any encumbrances on operating any developmental endeavor. In light of this general framework of understanding that the research tries to give some clue over the general stature of the topic by employing both primary and secondary resources as a guiding design and methodology and both descriptive and explanatory designs blended together. The research approach utilized, are both qualitative and quantitative. The study finds out that majority of the respondents/interviewees are dissatisfied or satisfied by either on the availability andefficacy of legal and policy instruments to govern the affair or by the level of commitments that banks display to operate in conformity with regulatory mechanisms while they entertain loan applications. Future researchers have many issues to delve into, especially by enlarging the topic to embrace other banks and possibly by diversifying variables. The researcher commends further steps should be taken to ensure maximum resultsto ensure the safety of the environment which is quite likely affected by developmental efforts having adverse spillover impacts.CBE is showcased to breathe some soul onto the topic.



EIA, CBE, Policy Instruments, Legal Mechanism, Project Loa, banks