Difference between revisions of "Green Loan Principles"

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== Definition ==
 
== Definition ==
The '''Green Loan Principles''' (GLP) have been developed by representatives from financial institutions active in the [[Syndicated Loan]] market, with a view to promoting the development and integrity of the [[Green Loan]] product.
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The '''Green Loan Principles''' (GLP) have been developed by representatives from financial institutions active in the [[Syndicated Loan]] market, with a view to promoting the development and integrity of the [[Green Loan]] product<ref>[https://www.lma.eu.com/documents-guidelines/documents/category/green--sustainable-finance Loan Market Association]</ref>
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== Principles ==
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=== Use of Proceeds ===
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The fundamental determinant of a green loan is the utilisation of the loan proceeds for [[Green Loan | Green Projects]] (including other related and supporting expenditures, including R&D), which should be appropriately described in the finance documents and, if applicable, marketing materials. All designated Green Projects should provide clear environmental benefits, which will be assessed, and where feasible, quantified, measured and reported by the borrower.
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Where funds are to be used, in whole or part, for refinancing, it is recommended that borrowers provide an estimate of the share of financing versus refinancing. Where appropriate, they should also clarify which investments or project portfolios may be refinanced, and, to the extent relevant, the expected look-back period for refinanced Green Projects.
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A green loan may take the form of one or more tranches of a loan facility. In such cases, the green tranche(s) must be clearly designated, with proceeds of the green tranche(s) credited to a separate account or tracked by the borrower in an appropriate manner.
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The GLP explicitly recognise several broad categories of eligibility for Green Projects with the objective of addressing key areas of environmental concern such as climate change, natural resources depletion, loss of biodiversity, and air, water and soil pollution. This non-exhaustive list, set out in Appendix 1, is intended to capture the most usual types of projects supported, and expected to be supported, by the green loan market. However, it is recognised that definitions of green and green projects may vary depending on sector and geography.
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== References ==
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<references/>
  
  
  
 
[[Category:Sustainable Finance]]
 
[[Category:Sustainable Finance]]

Revision as of 17:29, 15 January 2020

Definition

The Green Loan Principles (GLP) have been developed by representatives from financial institutions active in the Syndicated Loan market, with a view to promoting the development and integrity of the Green Loan product[1]

Principles

Use of Proceeds

The fundamental determinant of a green loan is the utilisation of the loan proceeds for Green Projects (including other related and supporting expenditures, including R&D), which should be appropriately described in the finance documents and, if applicable, marketing materials. All designated Green Projects should provide clear environmental benefits, which will be assessed, and where feasible, quantified, measured and reported by the borrower.

Where funds are to be used, in whole or part, for refinancing, it is recommended that borrowers provide an estimate of the share of financing versus refinancing. Where appropriate, they should also clarify which investments or project portfolios may be refinanced, and, to the extent relevant, the expected look-back period for refinanced Green Projects.

A green loan may take the form of one or more tranches of a loan facility. In such cases, the green tranche(s) must be clearly designated, with proceeds of the green tranche(s) credited to a separate account or tracked by the borrower in an appropriate manner.

The GLP explicitly recognise several broad categories of eligibility for Green Projects with the objective of addressing key areas of environmental concern such as climate change, natural resources depletion, loss of biodiversity, and air, water and soil pollution. This non-exhaustive list, set out in Appendix 1, is intended to capture the most usual types of projects supported, and expected to be supported, by the green loan market. However, it is recognised that definitions of green and green projects may vary depending on sector and geography.

References

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