Project Details
Project
Bank of Bahrain and Kuwait Sustainable Finance Framework Second Party Opinion (2025)
Client
Bank of Bahrain and Kuwait
Project Type
Green Bond/Loan; Sustainability Bond/Loan; Social Bond/Loan;
Industry Group
Banks
Use of Proceeds
Water/waste water management; Sustainable agriculture; Socio-economic advancement; SME finance and microfinance; Renewable energy; Pollution prevention and control; Natural resources/land use management; Health; Green buildings; Food security; Energy efficiency; Employment generation and Socio-economic empowerment; Education; Climate change adaptation; Clean transport; Circular economy adapted products, production technologies and processes; Affordable housing; Access to essential services; Affordable basic infrastructure;
Location
Bahrain
Evaluation Date
Nov 2025
Evaluation Summary
The Bank of Bahrain and Kuwait B.S.C. has developed the Sustainable Finance Framework, dated November 2025, under which it intends to issue bonds, sukuk, trade facilities, working capital facilities, current accounts and savings accounts, term deposits, derivatives1 and other debt instruments, and obtain loans to fund projects in Bahrain, Kuwait, the United Arab Emirates, Saudi Arabia, Qatar, Oman, Turkey, India and Egypt in eight environmental and four social categories.
We have assessed the overall Sustainability Contribution of the Framework as Significant based on the average Sustainability Contribution of the Framework’s 12 use of proceeds categories. As per our methodology, we have applied equal weighting across categories.
Investments under the Renewable Energy, Energy Efficiency, Clean Transportation, Sustainable Water and Wastewater, and Climate Change Adaptation categories will strongly support a low carbon economy. However, desalination plants, one of the projects the Bank plans to finance, lack defined energy efficiency thresholds despite having high energy demands. Under Pollution Prevention and Control, measures will enhance waste management practices. Meanwhile, financing under Living and Natural Resources may include smallholder livestock farms with high environmental footprints, although these expenditures still promote sustainable agriculture. Green Buildings will contribute to a low carbon built environment but may not always meet minimum energy efficiency thresholds.
For social categories, the Bank’s financing for Access to Essential Services, Affordable Housing, Employment Generation and Food Security does not specifically target regions or groups with the greatest unmet needs. However, affordability will be ensured through heavily subsidized mortgages and services provided at no or subsidized cost, although cost reductions in MSME financing are less clearly defined. Overall, these expenditures are expected to significantly enhance access to such services and facilities in the countries of financing.
We have assessed the Framework as Aligned with the Green Bond Principles 2025, Social Bond Principles 2025, Sustainability Bond Guidelines 2021, Green Loan Principles 2025 and Social Loan Principles 2025.