Project Details
Project
Alinma Bank Sustainable Finance Framework Second-Party Opinion (2024)
Client
Alinma Bank
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Water/waste water management; Pollution prevention and control; Clean transport; Green buildings; Climate change adaptation; Affordable basic infrastructure; Education; Health; Employment generation and Socio-economic empowerment; Socio-economic advancement;
Location
Saudi Arabia
Evaluation Date
Mar 2024
Evaluation Summary
USE OF PROCEEDS
The eligible categories for the use of proceeds1 are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, Green Loan Principles and Social Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 1, 3, 4, 6, 7, 8, 11, 12 and 13.
PROJECT EVALUATION AND SELECTION
Alinma Bank has established a Sustainability Committee which will be responsible for evaluating and selecting projects in accordance with the eligibility criteria under the Framework. Alinma conducts an ESG risk assessment for all allocation decisions using its ESG Due Diligence Toolkit which identifies, manages and quantifies environmental and social opportunities and risks associated with the assets financed under the Framework. Sustainalytics considers the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Alinma’s Sustainability Committee will be responsible for the management and allocation of proceeds and will track the proceeds using its sustainable finance asset register. Alinma intends to allocate proceeds within 24 months of each issuance. Pending full allocation, unallocated proceeds will be temporarily invested in short term sharia-compliant instruments in accordance with the Bank’s local liquidity management guidelines. This is in line with market practice.
REPORTING
Alinma commits to report on the allocation of proceeds on its website on an annual basis until full allocation. Allocation reporting will include the total amount of allocation to eligible categories, project locations, the share of financing versus refinancing and the balance of unallocated proceeds. In addition, Alinma is committed to reporting on relevant impact metrics. Sustainalytics views Alinma’s allocation and impact reporting as aligned with market practice.