Project Details
Project
Banco de Desenvolvimento de Minas Gerais (BDMG) Green Bond Second-Party Opinion
Client
Banco de Desenvolvimento de Minas Gerais (BDMG)
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Brazil
Evaluation Date
Sep 2018
Evaluation Summary
Sustainalytics is of the opinion that the BDMG 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 seven eligible categories for the use of proceeds (pollution prevention and control, water and effluent management, renewable energy, biofuels, energy efficiency, clean transportation, and natural resources management) are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that the projects will lead to positive environmental impacts and advance various UN Sustainable Development Goals.
PROJECT EVALUATION/SELECTION
BDMG’s project selection process is overseen by the Framework Committee, which is headed by an Executive Director, and consists representatives from various departments. The Committee will evaluate projects based on the credit risk of the borrower, the expected environmental impacts, alignment with the Framework, and alignment with the Bank’s SocialEnvironmental Responsibility Policy to determine eligibility. This is in line with market practice.
MANAGEMENT OF PROCEEDS
BDMG’s Financial Management department will oversee the management of proceeds, which will be registered as a unique source by the Bank’s established internal accounting functions. Pending allocation, proceeds will be held in the Bank’s cash account or invested in high-liquidity low-risk instruments, and will in no case be invested in projects which are misaligned with the goals of the Framework. This is in line with market practice.
REPORTING
BDMG has committed to reporting annually on both the allocation, including a breakdown by eligibility category and region, and the impact, including relevant KPIs and representative case studies, of proceeds. This is in line with market practice.