Project Details
Project
Burgan Bank Sustainability Financing Framework Second-Party Opinion (2022)
Client
Burgan Bank K.P.S.C.
Project Type
Sustainability Bond/Loan
Industry Group
Diversified Financials
Use of Proceeds
Clean transport; Renewable energy; Energy efficiency; Pollution prevention and control; Water/waste water management; Green buildings; Affordable basic infrastructure; Access to essential services; Employment generation and Socio-economic empowerment; SME finance and microfinance;
Location
Kuwait
Evaluation Date
Feb 2022
Evaluation Summary
Sustainalytics is of the opinion that the Burgan Bank K.P.S.C. Sustainable Financing Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2021, and Social Loan Principles 2021. 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. Sustainalytics anticipates that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 3, 4, 6, 7, 8, 9, 11 and 12.
PROJECT EVALUATION / SELECTION
Burgan Bank’s internal process in evaluating and selecting projects and companies will be overseen by its Sustainability Finance Working Group which will comprise of members from the Group Investment Banking & Treasury, Group Risk, Financial Accounting & Control and Corporate Communications departments. The Bank will adopt an environment and social risk management process for the credit/investment analysis of borrowing entities and investee companies and investment decision making processes, which are applicable to all allocation decisions made under the Framework. Sustainalytics considers the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Burgan Bank’s Credit Administration Department will track allocation using an ESG Register. The Bank intends to allocate proceeds within 36 months of issuance and has established a 36-month lookback period for refinancing activities. Unallocated proceeds will be managed in accordance with the Bank’s general liquidity guidelines, as they pertain to the deployment of ESG proceeds. This is in line with market practice.
REPORTING
Burgan Bank intends to report on allocation of proceeds in its Sustainability Report until full allocation. The report will include information on the proceeds, a breakdown of proceeds allocated to eligible projects and pure play companies, proportion of financing to refinancing, projects and pure play companies by geography and the balance of unallocated proceeds. In addition, Burgan Bank is committed to reporting on relevant impact metrics. Sustainalytics views Burgan Bank’s allocation and impact reporting as aligned with market practice.