Project Details
Project
Colbún Green Financing Framework Second Party Opinion (2021)
Client
Colbún S.A.
Project Type
Green Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Energy efficiency;
Location
Chile
Evaluation Date
Oct 2021
Evaluation Summary
Sustainalytics is of the opinion that the Colbún Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Renewable Energy and Energy Efficiency – are aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically SDG 7: Affordable and Clean Energy.
PROJECT EVALUATION / SELECTION
Colbún will establish a Sustainability Committee to oversee the selection of eligible projects (the “Eligible Green Projects”). The Sustainability Committee will be comprised of representatives from the Finance Division, the Engineering and Projects Division, and the Environmental Department. Colbún’s CFO will be responsible for the ultimate approval of Eligible Green Projects. Colbún’s environmental and social risk management system is applicable to all allocation decisions made under the Framework. Sustainalytics considers Colbún’s risk management system to be adequate and the project selection process to be in line with market practice.
MANAGEMENT OF PROCEEDS
Colbún’s Sustainability Committee will be responsible for tracking net bond proceeds. Colbún expects to fully allocate within 36 months of the respective issuance date. Unallocated proceeds will be held on Colbún’s balance sheet, invested in cash, cash equivalents and/or other short-term liquid instruments in accordance with its Investment Policy. This is in line with market practice.
REPORTING
Colbún intends to publish annual reports containing (i) a description of projects and the amount allocated to each Eligible Green Project, (ii) the unallocated amount, (iii) share of proceeds for financing and refinancing purpose. In addition, Colbún is committed to reporting on relevant impact metrics. This information will be posted on its website on an annual basis until full allocation. Sustainalytics views Colbún’s location and impact reporting as aligned with market practice.