Green Loan – greenfinance

A type of loan instrument that is used to finance or re-finance eligible green projects

Green Loan Principle

Internationally recognized voluntary issuance guidelines
Can be applied on a deal-by-deal basis
With 4 main components which is the same as Green Bond Principle:
1. Use of Proceeds
2. Process for Project Evaluation and Selection
3. Management of Proceeds
4. Reporting

Enhancement of sustainability management
Promoting green projects and resolve environmental issues
Raising funds on relatively favorable terms

Green Loan e-Assessment (launched by HKQAA)

Purpose: For companies to conduct green assessments to prove their loan projects have:
1. Green nature
2. Conducted environmental impact reporting
Assessment Criteria:
1. Proceeds of the Loan are clearly defined for the use of Green Projects;
2. Project nature can match with the Use of Proceeds of Green Loan Principles and Sustainable Development Goals;
3. Select key indicators for environmental impact and prepare for data collection

Assessment Types:

Assessment Type	Initial Assessment	Surveillance Assessment
Focus	If the Loan has green nature	If the Loan has conducted environmental impact reporting
Result	Green Nature (Green or Non-Green)	Green Type (AAA \| AA \| A \| BBB \| Unclassified)

Bank of China (Hong Kong) Limited & Sweetheart Garden Restaurant

Borrower:	Sweetheart Garden Restaurant
Lender:	Bank of China (Hong Kong) Limited
Use of Proceeds:	Shop renovation – Installing energy-saving lamps and air-conditioning system

DBS Bank (Hong Kong) Limited & Xinyi Glass Holdings Limited

Borrower:	Xinyi Glass Holdings Limited
Lender:	DBS Bank (Hong Kong) Limited
Use of Proceeds:	Investing in comprehensive green production and products

Green Bond and Green Loan Comparison

Green Loans	Green Bonds
Usually from Financial Institutes	Usually from Investor Markets
Flexible interest rates	Fixed interest rates
Repay principal periodically	Repay principal on maturity
Lenders cannot demand early repayment if loan term has not been agreed	Investors can trade their Green Bonds before maturity