Project Details
Project
New York Power Authority Green Bond and Green Commercial Paper Notes Framework Second-Party Opinion (2024)
Client
New York Power Authority
Project Type
Green Bond/Loan
Industry Group
Utilities
Use of Proceeds
Renewable energy; Energy efficiency; Green buildings;
Location
U.S.
Evaluation Date
Sep 2024
Evaluation Summary
Sustainalytics is of the opinion that the New York Power Authority Green Bond and Green Commercial Paper Notes Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds Renewable Energy, Energy Efficiency and Green Buildings, are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental and social impacts and advance the UN Sustainable Development Goals (SDGs), specifically SDGs 7 and 9.
PROJECT EVALUATION AND SELECTION
Through joint coordination, NYPA’s Operations Group, Budgets and Enterprise Portfolio Management Office, along with assistance from the Treasury and Legal Departments, will be responsible for evaluating and selecting projects in line with the Framework’s eligibility criteria. NYPA has a process in place to address environmental and social risks associated with the projects financed. Furthermore, NYPA has communicated to Sustainalytics that it is in the process of establishing a scoring system for complementing its existing environmental and social risk assessment process. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
NYPA’s treasury department will be responsible for overseeing the management and allocation of proceeds. Proceeds will be tracked using internal tracking systems. NYPA intends to allocate proceeds within three years of the respective issuance date. Pending full allocation, proceeds will be held in temporary liquid and readily available investment instruments including cash, term deposits with commercial banks, mutual funds and government securities, in accordance with NYPA’s investment guidelines. This is in line with market practice.
REPORTING
NYPA commits to reporting on the allocation and impact of proceeds, which will be published on its website on an annual basis until full allocation, as part of the organization’s reporting. Allocation reporting will include the use of proceeds (project type, capacity and location) for each green bond issued, the current allocated and outstanding amounts and contractual maturity dates and alignment of the use of proceeds with the Framework. Sustainalytics notes that NYPA will include impact reporting by project or on an aggregate basis. Based on the above, Sustainalytics considers this process to be in line with market practice.