Project Details
Project
KEPCO Green Bond Framework Second-Party Opinion
Client
KEPCO
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
South Korea
Evaluation Date
Jun 2019
Evaluation Summary
Sustainalytics is of the opinion that the KEPCO Green Bond Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible category for the use of proceeds – (i) Renewable Energy, and (ii) Clean Transportation – are aligned with those recognized by the Green Bond Principles 2018. Sustainalytics considers that the eligible projects will lead to positive environmental impacts by expanding renewable energy capacity as well as electric vehicles (EVs) and related infrastructure. Sustainalytics also `considers that the eligible projects will advance the UN Sustainable Development Goals (SDGs), particularly SDG 7 and 11.
PROJECT EVALUATION/SELECTION
KEPCO’s eligible projects are evaluated and selected by its Treasury Department and the relevant departments and teams under the KEPCO New Energy Business Department and Global New Business Department based on the established eligibility criteria. This process is aligned with market practice.
MANAGEMENT OF PROCEEDS
The net use of proceeds will be managed by KEPCO’s Treasury Department on a portfolio basis. Pending full allocation, the unallocated proceeds will be used for the payment of outstanding indebtedness, and/or will be temporarily invested in cash, cash equivalents, investment grade securities or other marketable securities and short-term instruments. This process is in line with market practice.
REPORTING
G KEPCO intends to report annually on the allocation and impact of proceeds on the company’s website until full allocation of the bonds. Allocation reporting will include the balance amount of allocated and unallocated net proceeds, portion of financing and refinancing as well as the description of projects while the impact reporting will include relevant impact metrics, i.e. annual GHG emissions avoided in tons of CO2 equivalent, and number of EV purchases. The scope and frequency of allocation and impact reporting is aligned with market practice.