Project Details
Project
Metro Green Financing Framework Second-Party Opinion (2024)
Client
Empresa de Transporte de Pasajeros Metro S.A
Project Type
Green Bond/Loan
Industry Group
Transportation
Use of Proceeds
Clean transport; Renewable energy; Energy efficiency; Water/waste water management; Eco-efficient products; Climate change adaptation;
Location
Chile
Evaluation Date
Feb 2024
Evaluation Summary
Sustainalytics is of the opinion that the Metro Green Financing Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and Green Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
Sustainable Water and Wastewater Management, Circular Economy Adapted Products, Production Technologies and Processes, Climate Change Adaptation - are aligned with those recognized by the Green Bond Principles and Green Loan Principles. Sustainalytics considers that investments in the eligible categories will have a positive impact on the decarbonization of Santiago’s public transportation and advance the UN Sustainable Development Goals, specifically SDGs 6,7, 9, 11, 12 and 13.
PROJECT EVALUATION AND SELECTION
Metro’s Sustainability Committee, which includes four members of its Board of Directors, will be responsible for identifying, evaluating and selecting eligible projects in line with the Framework’s eligibility criteria. In this process, the committee will also be supported by the Finance, Legal and Sustainability teams of Metro. The Sustainability Committee will also be responsible for providing the final approval for the selected eligible projects. Metro has adopted internal processes and policies to address environmental and social risks commonly associated with the financed projects. This is in line with market practice.
MANAGEMENT OF PROCEEDS
Metro’s Area of Finance and Budget Control will be responsible for tracking and managing proceeds via an internal register. Metro intends to allocate proceeds within 36 months of issuance. Pending full allocation, unallocated proceeds will be invested in cash or cash equivalents, used to repay existing borrowings, or held in accordance with Metro’s general liquidity policy. Metro has confirmed that it will exclude temporary allocations towards carbon-intensive activities. This is in line with market practice.
REPORTING
Metro commits to report on the allocation of proceeds in an annual report, which will be published on its website on an annual basis until full allocation. In addition, Metro intends to report on the environmental or social impact of the use of proceeds using relevant impact metrics. Sustainalytics views Metro’s allocation and impact reporting as aligned with market practice.