Green Bond Framework
EUROFIMA’s Green Bond Framework has been created in alignment with the Green Bond Principles 2018 ("GBP") defined by the International Capital Market Association (ICMA). As such, it follows the four core components as described by the GBP:
- Use of proceeds
- Process for project evaluation and selection
- Management of proceeds
- Reporting (see separate section)
The eligible category will lead to positive environmental impacts and advance the UN Sustainable Development Goals SDG 9 and 11. EUROFIMA follows the EU taxonomy for sustainable activities and makes substantial contribution to climate change mitigation and adaptation. It finances clean transportation, more specifically zero direct tailpipe emissions passenger interurban rail transport activities.
For further information and details, please download our Green Bond Framework.
USE OF PROCEEDS
Proceeds raised through Green Bond issuances will be exclusively used to finance or refinance purchases, modernisation and refurbishments of Eligible Green Assets owned and in operation by EUROFIMA’s shareholder railways and/or their affiliates for passenger transport only.
The types of rolling stock equipment qualifying as Green Eligible Assets are locomotives, multiple units and coaches. The source of energy to power the rolling stock is electrical, battery or hybrid (both battery and electrical).
Green Bond proceeds can only be used to fund the financing or purchase of newly manufactured rolling stock or existing rolling stock either delivered after January 1st 2000 or which underwent a major upgrade carried out not earlier that January 1st 2000.
PROJECT EVALUATION AND SELECTION
EUROFIMA will conduct a thorough assessment of both the railway(s) and the rolling stock that will be financed with the proceeds raised from a Green Bond issuance. The aim of this assessment process is to evaluate, among other things, the use of the rolling stock (i.e. passenger transport only) and the source of power (i.e. electric, battery or hybrid). The Sustainability Committee will carry out the identification, selection and allocation of eligible Green assets. In case the Management Committee approves the respective project, it sends the notification to EUROFIMA’s Board of Directors.
MANAGEMENT OF PROCEEDS
Within one year of Green Bond issuance and based on the set of selection criteria, EUROFIMA defines a Green Pool of eligible loans pledged with eligible rolling stock assets. As long as Green Bonds are outstanding, EUROFIMA ensures that the Green Pool’s loan volume is at least equivalent to the issued volume of the outstanding Green bonds.
At any time, an amount equal to the net proceeds of the issue of the Green Bonds will be separately earmarked... Green Bond proceeds will be mapped to and reported along the categories of investments as per Use of Proceeds.
The funds will be specially earmarked within the company’s internal accounting systems to ensure that such funds are only disbursed to identified projects qualifying as Eligible Green Assets as defined under the Use of Proceeds.