Project Details
Project
New Development Bank Sustainable Financing Policy Framework Second-Party Opinion (2020)
Client
New Development Bank
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Education; Health; Affordable housing; Green buildings; Energy efficiency; Natural resources/land use management; Water/waste water management; Renewable energy; Pollution prevention and control;
Location
China
Evaluation Date
Nov 2020
Evaluation Summary
Sustainalytics is of the opinion that the overview of the New Development Bank ("NDB") Sustainable Financing Policy Framework (“Framework Overview”), which contains a subset of eligibility criteria described under the NDB Sustainable Financing Policy Framework, aligns with the Sustainability Bond Guidelines 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories -- Clean Transportation, Energy-Efficient Buildings, Energy Efficiency, Renewable Energy, Sustainable Land Use and Biodiversity, Sustainable Waste Management, Sustainable Water Management & Irrigation, Basic Sustainable Infrastructure, Education, Healthcare and Well-Being, and Social Housing -- are aligned with those recognized by the Green Bond Principles and Social Bond Principles. Sustainalytics considers that the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDGs 1, 3, 4, 6, 7, 9, 11, 12,15.
PROJECT EVALUATION / SELECTION
NDB's process in evaluating and selecting projects is handled by Treasury and Portfolio Management Division in consultation with the Operations Policy and Project Support Division. Eligible projects undergo a comprehensive environmental and social due diligence to ensure the compliance with environmental and social regulations and the Bank's Environment and Social Framework, which is comprised of the Environment and Social Policy and Environmental and Social Standards. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
NDB will establish a register for the issuance of the bonds (the "Register"). The Register will be managed by Finance, Budget and Accounting Division and Treasury and Portfolio Management Division and include the financing amount, amount of loan disbursed and outstanding, loan maturity and other necessary information to record the aggregate of issuance proceeds and use of proceeds. In the event of pending allocation, unallocated proceeds could be temporarily invested in green, social and sustainability bonds, or money market instruments, or kept in cash in accordance with NDB's Liquidity Risk Management Policy.
REPORTING
NDB intends to report allocation proceeds on its website on an annual basis until full allocation. Allocation reporting will include aggregate amounts of bond proceeds allocated to each of the eligible sectors, together with number and description of projects, the balance of unallocated proceeds and regional distribution of projects. In addition, New Development Bank is committed to reporting on relevant environmental and/or social impact metrics. Sustainalytics views this process as aligned with market practice.