Project Details
Project
Red Eléctrica Group Green Finance Framework Second Party Opinion (2021)
Client
Red Eléctrica de España, S.A.
Project Type
Green Bond/Loan
Industry Group
Utilities
Use of Proceeds
N/A
Location
Spain
Evaluation Date
Sep 2021
Evaluation Summary
Sustainalytics is of the opinion that the Red Eléctrica Group Green Finance Framework is credible and impactful and aligns with the four core components of the Green Bond Principles 2021 and the Green Loan Principles 2021. This assessment is based on the following:
USE OF PROCEEDS
The eligible category for the use of proceeds, Electricity Network, is aligned with those recognized by the Green Bond Principles and the Green Loan Principles. Sustainalytics considers that financing of assets in the eligible categories will lead to positive environmental impacts and advance the UN Sustainable Development Goals, specifically goals 7, 9, and 11.
PROJECT EVALUATION / SELECTION
Red Eléctrica has defined a two-stage project selection process, with final approval from its Sustainability Steering Committee, which includes representatives from Corporate Finance, Sustainability, Energy Networks, System Operation, and Management Control. The Committee will meet on at least a quarterly basis. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
Red Eléctrica will manage the proceeds of green transactions in a portfolio approach, aiming to ensure that, over time, the green portfolio matches or exceeds the balance of outstanding instruments. Unallocated proceeds will be held in line with the Group’s liquidity policy. This is in line with market practice.
REPORTING
Red Eléctrica intends to report on the allocation of proceeds at the category level on an annual basis, including the total amount allocated to the green portfolio, the amount and/or percentage of new and existing projects and the geographical distribution of the assets. In addition, impact reporting including relevant quantitative indicators, case studies, or reports will be provided where feasible. This is in line with market practice.
Alignment with the EU Taxonomy
Sustainalytics has assessed Red Eléctrica’s Green Finance Framework for alignment with the EU Taxonomy, and is of the opinion that the Framework’s eligibility criteria, which map to one EU activity, align with the applicable Technical Screening Criteria (“TSC”) and with the Do No Significant Harm Criteria in the EU Taxonomy. Sustainalytics is also of the opinion that the activities and assets to be financed under the Framework will be carried out in alignment with the EU Taxonomy’s Minimum Safeguards.