Project Details
Project
AAIB Sustainability Bond Framework Second-Party Opinion (2024)
Client
Arab African International Bank
Project Type
Sustainability Bond/Loan; Green Bond/Loan; Social Bond/Loan;
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Sustainable agriculture; Sustainable aquaculture/fisheries; Clean transport; Green buildings; Water/waste water management; Pollution prevention and control; Socio-economic advancement; Natural resources/land use management; Food security; Employment generation and Socio-economic empowerment; Conservation; Affordable housing; Access to essential services; SME finance and microfinance;
Location
Egypt
Evaluation Date
Jun 2024
Evaluation Summary
Sustainalytics is of the opinion that the AAIB Sustainability Bond Framework is credible, impactful and aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2023, Green Loan Principles 2023 and Social Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles and Social Loan Principles. The eligible categories are: Renewable Energy; Energy Efficiency; Environmentally Sustainable Management of Living Natural Resources and Land Use – Climate Smart Agriculture; Environmentally Sustainable Management of Living Natural Resources and Land Use – Aquaculture; Clean Transportation; Green Buildings; Sustainable Water and Wastewater Management; Pollution Prevention and Control; Marine Pollution; Sustainable Ports; Sustainable Marine Transport; Marine Ecosystem Management, Conservation and Restoration; Sustainable Coastal and Marine Tourism; Access to Essential Services; Affordable Housing; Employment Generation; Food Security and Sustainable Food Systems; Socioeconomic Advancement and Empowerment; and Women in the Economy. 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, 2, 3, 4, 6, 7, 8, 9, 10, 11, 12 and 14.
PROJECT EVALUATION AND SELECTION
Committee will be responsible for the evaluation and selection of eligible projects in line with the Framework’s eligibility criteria. The committee is composed of members from the Treasury and Capital Markets, Sustainable Finance, E&S Risk departments, and certified subject matter experts. AAIB works with its customers to identify and manage potential environmental and social risks. Sustainalytics considers the risk management process to be adequate and the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
The Sustainable Finance Department will be responsible for managing and tracking the allocation of proceeds using a Sustainability Bond Registry and will ensure that the aggregate nominal amount of all eligible projects included in the sustainable asset portfolio meet or exceed the principal amount of outstanding sustainable bonds issued under the Framework. AAIB intends to fully allocate proceeds within 24 months of issuance. Pending full allocation, unallocated proceeds will be held in cash, cash equivalents or other high quality liquid assets. Sustainalytics considers the management of proceeds to be in line with market practice.
REPORTING
AAIB commits to report on the allocation of proceeds and corresponding impact on an annual basis until full allocation. The allocation and impact report will be published on the Bank’s website. Sustainalytics considers the allocation and impact reporting commitments as aligned with market practice.