Project Details
Project
Inter-American Development Bank Sustainable Debt Framework Second-Party Opinion (2024)
Client
Inter-American Development Bank
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Energy efficiency; Renewable energy; Natural resources/land use management; Climate change adaptation; Clean transport; Water/waste water management; Pollution prevention and control; Access to essential services; Affordable basic infrastructure; Socio-economic advancement; Employment generation and Socio-economic empowerment; Food security;
Location
U.S.
Evaluation Date
Dec 2024
Evaluation Summary
Sustainalytics is of the opinion that the Inter-American Development Bank Sustainable Debt Framework is credible, impactful and aligned with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021 and Social Bond Principles 2023. 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, 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 2, 3, 4, 6, 7, 8, 10, 11, 13, 15, 16 and 17.
PROJECT EVALUATION AND SELECTION
IDB’s treasury division, in collaboration with the Bank’s office of strategic planning and development effectiveness, selects projects in line with the Framework’s eligibility criteria. As part of the project evaluation and selection process, the Bank’s treasury division consults its internal lending specialists. All activities financed under the Framework will be screened for potential environmental and social risks by IDB’s Environmental and Social Risk Management Unit. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
IDB will be managing proceeds on a portfolio basis. An amount equal to the net proceeds will be recorded in a separate sub-account and allocated to credible investments. IDB’s Treasury department will be responsible for management of proceeds. IDB will allocate proceeds fully within 36 months of each issuance. In the case that the selected projects no longer comply with the eligibility criteria in the Framework, IDB will reallocate proceeds to other eligible projects. Pending full allocation, temporary proceeds will be held in cash and cash equivalents, in accordance with IDB’s conservative liquidity investment guidelines.
REPORTING
IDB will make an annual allocation and impact report available on IDB Investor website until full allocation of proceeds. Allocation reporting will include the amount of net proceeds allocated per project or category. Sustainalytics considers the allocation and impact reporting commitments as aligned with market practice.