Neoenergia publishes Green Finance Framework to guide sustainable investments


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Document aims to finance and/or refinance investments in eligible renewable energy generation, transmission and distribution projects by issuing instruments for attracting green loans

In July 2019, Neoenergia carried out the largest emission of green debentures in the country, with a total volume of R$ 1.3 billion, using renewable energy ballast (hydro and wind) and transmission. In March 2020, a new issuance of green bonds in the amount of R$ 300 million was carried out to finance a transmission asset. Both had second opinion opinions issued by Sitawi in accordance with the Green Loans Principles.  

In this context and in a rapidly growing environment of its business, the Company has developed a green financing protocol - Green Finance Framework - with the objective of ratifying its commitment to transparency and sustainability in the conduct of its activities. The initiative positions it as a protagonist in the sector for the development and incentive to issue green bonds in the market, contemplating its portfolio of investments in eligible renewable energy generation projects, transmission and distribution to be financed through the issuance of instruments to raise funds from third parties by it or any of its subsidiaries. The document is a pioneer among private companies in the Brazilian electricity sector and aims to establish commitments for the sustainable management of their businesses, ensuring greater transparency to investors regarding the allocation and allocation of funds raised through green financing instruments, such as green bonds or green credits.  

Neoenergia's Green Finance Framework was developed on the basis of the Green Bond Principles (GBP) published by the International Capital Market Association (ICMA) and which promote integrity in the green debt market, through guidelines aimed at ensuring transparency and commitment through the dissemination of indicators that permanently monitor the impact of its activities, from the environmental, social and corporate governance perspectives. The document also follows the Green Loan Principles (LPG), which are based on and refer to ICMA's GBP, with the aim of promoting consistency in the financial market.  

The document in reference has a second opinion opinion with a comfortable classification for Neoenergia's corporate performance in ASG attributed by Sitawi, the first Brazilian organization to evaluate green titles. This "certification" reiterates the company's commitment to establish attested references and submit its management practices to evaluation by an independent institution.  

"The financial sector plays an essential role in mobilising the capital needed to develop sustainable projects, as well as to ensure that the company's activities will be accountable and in line with best practices within the ASG dimensions. Green financing instruments – such as Green Bonds or green bonds – can direct large amounts of private capital to investments that promote actions to prevent and combat climate change, reduce greenhouse gas emissions, sustainable development and preserve the environment. It is a way to connect companies and their creditors to relevant and sustainable projects. Neoenergia's Green Finance Framework meets the social and environmental standards that can be selected for greendebts," says Alex Monteiro, Neoenergia's Deputy Corporate Finance Director.  

The projects generate environmental benefits through the generation, transmission and distribution of renewable energy. Transmission and distribution projects promote the increase of renewable energy in the country's electricity matrix and reduce energy losses through the improvement in the quality of the infrastructure of the National Interconnected System (SIN).  

Among the social contributions, there is development of the economic dynamics of the regions where the enterprises are installed with professional qualification programs to use the labor, generation of income for tenants of the land used for the projects, adequacy of local infrastructure, among others.  

Strategic Objective and ASG

Neoenergia's 2018-2022 strategic plan integrates the company's commitment to sustainable development through its purpose, values and management policies." The company's long-term vision is to contribute to a better future for the planet without compromising present results. Therefore, we adopted a strategy and a business model guided by the objective of carbon neutrality, for the generation of opportunities for economic, social and environmental development. Strategically, the group defines SDDs 7 and 13 as priorities in order to continue providing clean, intelligent and quality energy to Braziliansociety," says Francisco Carvalho, Superintendent of Innovation and Sustainability.  

The company guides its sustainable growth in the strategic expansion of clean energy generation projects, which represents almost 90% of the company's portfolio. In wind, the installed capacity will be tripled by 2023, reaching 1.6 GW. In 2020, Neoenergia announced its entry into large solar generation, with the construction of two plants.  

Since January 2021, the company has been part of B3's Corporate SustainabilityIndex portfolio, which brings together companies with the best corporate governance and sustainability practices. In addition, it became part for the first time in the 11th portfolio of the Efficient Carbon Index (ICO2) of the Stock Exchange and is part of the qualified group of companies recognized with the Pro-Ethics label. The company renewed its commitment in 2007 to the ten principles of the Global Compact, an initiative that advocates action based on respect for human rights, labor rights, environmental preservation and the fight against corruption, and the 17 Sustainable Development Goals (SDGs), both of which are un.

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