Project Details
Project
NMB Bank PLC Sustainable Financing Framework Second-Party Opinion (2023)
Client
NMB Bank PLC
Project Type
Sustainability Bond/Loan
Industry Group
Banks
Use of Proceeds
Renewable energy; Energy efficiency; Pollution prevention and control; Water/waste water management; Green buildings; Clean transport; Climate change adaptation; Natural resources/land use management; Affordable housing; Access to essential services; Employment generation and Socio-economic empowerment; Socio-economic advancement; Food security;
Location
Tanzania
Evaluation Date
Aug 2023
Evaluation Summary
Sustainalytics is of the opinion that the NMB Bank PLC Sustainable Financing Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2023, Green Loan Principles 2023 and Social Loan Principles 2023. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds1 are aligned with those recognized by the Green Bond Principles, Social Bond Principles, Green Loan Principles and Social Loan Principles. Sustainalytics considers that investments in the eligible categories will lead to positive environmental and social impacts and advance the UN Sustainable Development Goals, specifically SDGs 1, 2, 3, 4, 6, 7, 11, 12, 14 and 15.
PROJECT EVALUATION AND SELECTION
NMB’s Asset Originating Businesses will be responsible for evaluating and selecting eligible projects in line with the Framework’s eligibility criteria. The Bank’s Credit Committee, comprising members from the Business Banking, Wholesale Banking, Treasury, and Risk and Credit departments, will be responsible for the final approval of eligible projects, which will be allocated by the Treasury team. NMB Bank has an environmental and social management system in place to address environmental and social risks associated with projects being financed. This is in line with market practice.
MANAGEMENT OF PROCEEDS
NMB ’s Credit Administration department will manage proceeds using a portfolio approach, ensuring continuous allocation until bond maturity. For unsecured bonds issued under the Framework, NMB Bank has confirmed to Sustainalytics that it will match 100% of the proceeds on an ongoing basis until bond maturity. NMB intends to fully allocate proceeds within 18 months of issuance. Pending full allocation, unallocated proceeds will be invested in accordance with the Bank’s liquidity asset management investment policy in short-term money market products from sovereign, supranational, agencies, development banks and financial institutions. This is in line with market practice.
REPORTING
NMB commits to report on the allocation and impact of proceeds via impact reports on its website on an annual basis until full allocation. Allocation reporting will be done at the category level and will include the total amount of proceeds allocated to eligible loans or assets, number of eligible loans or assets, balance of unallocated proceeds and amount or percentage of new financing and refinancing. Additionally, NMB commits to report on indicative impact indicators on a category level to the extent that data is available from clients and subject to permitted disclosures in accordance with relevant confidentially agreements and privacy, competition or other relevant regulation. Sustainalytics views NMB Bank PLC’s allocation and impact reporting as aligned with market practice.