Project Details
Project
KOMIPO Green Bond Framework Second-Party Opinion
Client
Korea Midland Power
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
South Korea
Evaluation Date
Dec 2018
Evaluation Summary
Sustainalytics is of the opinion that the Korea Midland Power (“KOMIPO”) 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 three green categories for eligible use of proceeds – (i) Renewable Energy, (ii) Low Carbon Transport, and (iii) Green Buildings - are aligned with those recognized by the Green Bond Principles 2018. Sustainalytics considers the eligible green project categories to have positive environmental impact and to advance the UN Sustainable Development Goals, specifically 7 and 11.
PROJECT EVALUATION/SELECTION
A dedicated Green Bond Working Group will oversee the internal process in evaluating and selecting projects. The cross-functional working group will consist of senior representatives from various departments, including the CEO, and the Climate Change & Environment Team. This is in line with market practice.
MANAGEMENT OF PROCEEDS
KOMIPO will track the net use of proceeds through a Green Bond Register. The proceeds of transaction will be deposited in the general funding accounts and earmarked for allocation to eligible projects. Pending allocation from proceeds will be held in accordance with KOMIPO’s general liquidity management policy and can be invested in money market instruments, cash, cash equivalents, investment grade securities or other marketable securities and short-term instruments with satisfactory credit ratings and market liquidity. This is in line with market practice.
REPORTING
KOMIPO intends to provide a Green Bond Progress Report published within its Investor Relations website within one year of issuance, and on an annual basis until the proceeds are fully allocated. The allocation reporting will include the aggregate amount allocated to eligible projects, as well as its proportion of total disbursements, and impact reporting will include relevant metrics. Sustainalytics views KOMIPO’s allocation and impact reporting as aligned with market practice.