Project Details
Project
Aegea Sustainable Finance Framework Second Party Opinion (2023)
Client
Aegea Saneamento e Participações S.A.
Project Type
Sustainability Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Pollution prevention and control; Water/waste water management; Affordable basic infrastructure; Socio-economic advancement; Conservation;
Location
Brazil
Evaluation Date
May 2023
Evaluation Summary
USE OF PROCEEDS
The eligible categories for the use of proceeds – Renewable Energy, Pollution Prevention and Control, Terrestrial and Aquatic Biodiversity, Sustainable Water and Wastewater Management, Affordable Basic Infrastructure, and Socioeconomic Advancement and Empowerment – are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles and Social Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to a positive environmental or social impact and advance the UN Sustainable Development Goals, specifically SDGs 6, 7, 8 and 14.
PROJECT EVALUATION AND SELECTION
Aegea has established an ESG Executive Committee to evaluate and select projects that are in line with the Framework’s eligibility criteria. Aegea has in place processes to identify and mitigate environmental and social risks associated with eligible projects. Sustainalytics considers the risk management system to be adequate and the process for project implementation to be in line with market practice.
MANAGEMENT OF PROCEEDS
Aegea’s Treasury Department will be responsible for the management of proceeds on a portfolio basis, and the Financial Operations Department will be responsible for monitoring the allocation of proceeds. Aegea intends to fully allocate the proceeds within 36 months of issuance, and if a project becomes non-eligible as per the Framework criteria, Aegea will redirect the proceeds to other eligible projects within 12 months. Unallocated proceeds will be temporarily used for other operational, financial and investment activities. This is in line with market practice.
REPORTING
Aegea commits to report on the allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting will include the percentage of proceeds allocated to eligible projects, the percentage of proceeds temporarily allocated to other financial instruments and the percentage of proceeds temporarily allocated to other projects not indicated in the Framework. In addition, Aegea intends to report on relevant impact metrics. Sustainalytics views Aegea’s allocation and impact reporting as aligned with market practice.