Project Details
Project
Bank of Ayudhya (Krungsri) Sustainable Finance Framework Second-Party Opinion (2023)
Client
Bank of Ayudhya Public Company Limited
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Climate change adaptation; Conservation; Natural resources/land use management; Eco-efficient products; Clean transport; Green buildings; Pollution prevention and control; Renewable energy; Water/waste water management; Access to essential services; Employment generation and Socio-economic empowerment; Socio-economic advancement; Affordable housing;
Location
Thailand
Evaluation Date
Jul 2023
Evaluation Summary
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. Sustainalytics considers that investments in the eligible categories are expected to facilitate the transition to a low-carbon economy and advance socio-economic development in Thailand. Sustainalytics considers that the use of proceeds categories contributes to the advancement of the UN Sustainable Development Goals, specifically SDGs 2, 3, 4, 7, 9, 10, 11, 12, 13, 14, and 15.
PROJECT EVALUATION AND SELECTION
The head of each business segment of Krungsri will be responsible for project evaluation and selection in line with the Framework’s eligibility criteria. Each business segment and risk management group will assess environmental and social risks associated with the portfolio of eligible assets. The Bank has sustainable lending guidelines in place that considers ESG risk management. Sustainalytics considers these risk management systems to be adequate and the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
The Bank of Ayudhya Public Company Limited’s Strategic Assets and Liabilities Management Department will manage the allocation of the proceeds on a quarterly basis. The Bank of Ayudhya Public Company Limited has an internal monitoring system in place to track the use of proceeds. The Bank intends to allocate the proceeds within two years of issuance. Pending full allocation, unallocated proceeds will be invested in accordance with the Krungsri Treasury’s existing liquidity management procedures. This is in line with market practice.
REPORTING
The Bank of Ayudhya Public Company Limited intends to report on the allocation of proceeds on its website on an annual basis. Allocation reporting will include the amount of funds allocated to the eligible assets, the amount of funds allocated to replace or replenish eligible assets, the amount of unallocated proceeds and share of financing versus refinancing. The Bank of Ayudhya Public Company Limited will report on the qualitative and quantitative impact of the eligible projects where feasible at the category level. Sustainalytics views the reporting commitments to be in line with market practice.