Project Details
Project
Caribbean Development Bank’s Sustainable Finance Framework Second-Party Opinion
Client
Caribbean Development Bank
Project Type
Sustainability Bond/Loan
Industry Group
Financials
Use of Proceeds
Climate change adaptation; Energy efficiency; Renewable energy; Water/waste water management; Education; SME finance and microfinance; Food security;
Location
Barbados
Evaluation Date
Dec 2022
Evaluation Summary
Sustainalytics is of the opinion that the Caribbean Development Bank’s Sustainable Finance 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 – Climate Change Adaptation; Energy Efficiency; Renewable Energy; Sustainable Water and Wastewater Management; Access, Quality and Equity of Public Education; Financing and Support for MSMEs; and Sustainable Food Systems and Food Security – 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 will lead to positive environmental and social impacts and advance the UN Sustainable Development Goals, specifically SDGs 1, 2, 4, 5, 6, 7, 8, 11 and 13.
PROJECT EVALUATION / SELECTION
Caribbean Development Bank’s Adjudicatory Review Committee oversees project evaluation and selection and consists of the Vice President of Operations, the Director of the Projects Department, the Director of the Economics Department, the Director of Finance and Information Technology Solutions, General Counsel and the Chief Risk Officer. Caribbean Development Bank has adopted an internal procedure to address environmental and social risks associated with the projects financed under the Framework. This is in line with market practice.
MANAGEMENT OF PROCEEDS
Caribbean Development Bank’s Accounting Unit will be responsible for the management of proceeds. Caribbean Development Bank intends to reach full allocation within 24 months of the respective issuance date. Pending full allocation, net proceeds will be invested in liquid, highly rated, short-term securities or investments in line with Caribbean Development Bank’s Ordinary Capital Resources Financial Policies and Operating Guidelines. This is in line with market practice.
REPORTING
Caribbean Development Bank intends to report on the allocation and impact of proceeds in an Annual Sustainable Finance Report, on its website on an annual basis until full allocation. Allocation reporting will include a list of eligible green and social projects financed or refinanced through the instruments, a brief project description and the amounts allocated, the percentage of financing versus refinancing of the proceeds, the proceeds allocated per eligible category with information on the types of temporary investments and the remaining balance of unallocated proceeds at the reporting period end. Additionally, Caribbean Development Bank is committed to reporting on relevant impact metrics. Sustainalytics views Caribbean Development Bank’s allocation and impact reporting as aligned with market practice.