Second-Party Opinion Download

Sustainalytics is of the opinion that the AES Andes Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2023. This assessment is based on the following: 

USE OF PROCEEDS

The eligible categories for the use of proceeds – Renewable Energy, Energy Storage and Green Hydrogen – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDG 7. 

PROJECT EVALUATION AND SELECTION

AES Andes has established an internal committee that will be responsible for evaluating and selecting eligible green projects. AES Andes’ local internal functional teams and the finance team will be responsible for reviewing and approving the selected projects. AES Andes’ finance team will also be responsible for tracking the allocated proceeds. AES Andes has established internal policies and processes to mitigate environmental and social risks commonly associated with the eligible projects. Sustainalytics considers the project selection process in line with market practice. 

MANAGEMENT OF PROCEEDS

AES Andes’ finance team will be responsible for the management of proceeds. The net proceeds will be tracked using an internal tracking system. AES Andes intends to allocate net proceeds to eligible projects or assets as soon as practicable. Pending full allocation, AES Andes may temporarily use unallocated proceeds to prepay existing debt or will hold the unallocated proceeds in cash or cash equivalents or as per AES Andes’ general liquidity policy. AES Andes has communicated to Sustainalytics that it will not refinance debt associated with carbon-intensive assets and activities. Sustainalytics considers this process to be in line with market practice. 

REPORTING

AES Andes commits to report on the allocation of proceeds and impact annually until full allocation. The allocation and impact report will be made publicly available in a Green Finance Report on AES Andes’ website. Allocation reporting may include the amount of net proceeds allocated to eligible projects, eligible project categories and amount of unallocated proceeds. AES Andes commits to report on relevant impact metrics. Sustainalytics views AES Andes’ allocation and impact reporting as aligned with market practice.