Project Details
Project
Comisión Federal de Electricidad Sustainable Financing Framework Second-Party Opinion (2024)
Client
Comisión Federal de Electricidad
Project Type
Sustainability Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Energy efficiency; Clean transport; Green buildings; Pollution prevention and control; Climate change adaptation; Access to essential services;
Location
Mexico
Evaluation Date
Nov 2024
Evaluation Summary
Sustainalytics is of the opinion that the CFE Sustainable Financing Framework is credible, impactful and aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2023, Green Loan Principles 2023 and Social Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds – Renewable Energy, Energy Efficiency, Clean Transportation, Green Buildings, Pollution Prevention and Control, Climate Change Adaptation and Resilience, Access to Free or Subsidized Essential Services (Digital Inclusion) and Access to Free or Subsidized Essential Services (Electricity) – are aligned with those recognized by the Green Bond Principles and Social Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 7, 9, 11, 12 and 13.
PROJECT EVALUATION AND SELECTION
CFE’s internal process for evaluating and selecting projects is overseen by its Corporate Director’s Office for Strategic Planning team along with the Deputy Director’s Office for Investment Evaluation Projects, the Investments Commission and the Strategy and Investments Committee, with final allocation approval by CFE’s board of directors. CFE has environmental and social risk management processes that apply to all allocation decisions under the Framework. This is in line with market practice.
MANAGEMENT OF PROCEEDS
CFE’s process for management of proceeds is tracked by the Company’s Corporate Director’s Office of Finance through an investment folder. Pending allocation, proceeds will be held in cash or cash equivalents, and used to repay debt in accordance with the Company’s Investment Policy. CFE intends to allocate all proceeds within 24 months of issuance and has established a lookback period of 24 months. This is in line with market practice.
REPORTING
CFE commits to publish a report on allocation of proceeds on its website on an annual basis until full allocation. The report will include information on the allocation of net proceeds by individual project or category, the share of proceeds used for financing and refinancing, and the balance of unallocated proceeds. In addition, CFE intends to report on relevant impact metrics. Sustainalytics considers the allocation and impact reporting commitments as aligned with market practice.