Second-Party Opinion Download

Sustainalytics is of the opinion that the Municipality Credit Iceland 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 categories for the use of proceeds are aligned with those recognized by the Green Bond Principles. Sustainalytics considers production and distribution of renewable energy, green buildings, energy efficiency, waste management, clean transportation as well as water and wastewater management to have positive environmental impacts and advance the UN Sustainable Development Goals 6, 7, 11, 12.

PROJECT EVALUATION/SELECTION

MCI’s internal process for evaluating and selecting projects is aligned with market practice. MCI’s loan officer and CEO will select projects based on the environmental impact assessments of the projects provided by the municipalities and verified by an independent outside advisor. Projects are expected to have a positive long-term net environmental impact. Based on the impact report and upon verification, MCI’s loan officer and the CEO will screen and select eligible projects. This process is aligned with market practice.

MANAGEMENT OF PROCEEDS

MCI’s processes for management of proceeds is handled by MCI’s treasury department. MCI will manage an amount equal to the proceeds of the green bond according to its internal guidelines and hold the funds separate from proceeds of other bonds in a dedicated account. Unallocated proceeds will be invested short-term in government issued securities or other low-risk market instruments until disbursement. MCI’s internal auditor will verify the allocations of the Green Bond funds, which is aligned with best practice. Overall, the process is aligned with market practice.

REPORTING

MCI intends to annually disclose a Green Bond Impact Report, including eligible projects and allocated amounts, total amount allocated to eligible projects, funds yet to be allocated and relevant metrics on the environmental impact of the projects. Sustainalytics views the scope and frequency of MCI’s allocation and impact reporting as aligned with market practice.