Project Details
Project
Värmevärden Green Finance Framework Second-Party Opinion
Client
Värmevärden
Project Type
Green Bond/Loan
Industry Group
-
Use of Proceeds
-
Location
Sweden
Evaluation Date
Jan 2019
Evaluation Summary
Sustainalytics is of the opinion that the Värmevärden Green Financing Framework is credible and impactful, and aligns with the four core components of the Green Bond and Green Loan Principles 2018. This assessment is based on the following:
USE OF PROCEEDS
The eligible categories for the use of proceeds (i) Pollution prevention and control, (ii) Energy efficiency and (iii) Sustainable water and waste management are aligned with those recognized by the Green Bond Principles 2018 and Green Loan Principles 2018. Sustainalytics considers that the eligible Green Projects will support the provision of district heating by Värmevärden while lowering the company’s environmental footprint. Similarly, Sustainalytics views that the projects will advance the UN Sustainable Development Goals 6, 7, 9 and 11.
PROJECT EVALUATION/SELECTION
Värmevärden’s internal process for evaluation and selection of projects is aligned with market practice. Värmevärden’s Investment and Financial Committee, which oversees the Green Financing Framework and is composed of the CEO, Board of Directors and subject matter experts, is responsible for evaluating and selecting eligible projects.
MANAGEMENT OF PROCEEDS
Värmevärden’s processes for management of proceeds are aligned with market practice. The use of proceeds is administered by Värmevärden’s management team and its CFO. The proceeds allocated to eligible projects will be tracked through Värmevärden’s internal financing system using invoices which are marked against the funds of Green Term Debt. Unallocated proceeds will either be held in cash or invested in shortterm liquid instruments.
REPORTING
Aligned with market practice, Värmevärden will provide an annual update to its investors on the company’s allocation of proceeds, the amount of unallocated proceeds and a description of financed projects. In addition, Värmevärden will also provide annual data regarding the impact of its use of proceeds, through indicators such as amount of energy produced, volumes of biomass and waste used, and avoided CO2 emissions and energy savings.