During the One Planet Summit in Paris in 2017, the European Commission encouraged banks to take up the topic of financing activities for positive climate change and to offer mortgage loans for energy-efficient projects.

The Framework Program of the European Union, Horizon 2020, indicates the need to introduce standards for unified European "energy-efficient mortgages" (mortgage loans) that would encourage property owners to take measures to increase the energy efficiency of real estate or to acquire such properties using preferential financing conditions.

The pilot program of the "energy-efficient mortgages" (EeMAP) project was announced on February 12, 2018. EeMAP is an abbreviation of Energy Efficient Mortgages Action Plan - action plan for mortgage loans financing energy-efficient residential real estate. PKO Bank Polski and PKO Bank Hipoteczny, as the first banks in Poland, have joined the Energy Efficient Mortgages (EEM) Pilot Scheme.

The bank's participation in the financing of environmentally friendly housing investments should allow access to additional or supplementary sources of financing through the issue of Green Covered Bonds.

Green Covered Bonds are type of covered bonds where the proceeds will be exclusively applied to finance or re-finance, in part or in full, new and/or existing eligible green projects.
Such bonds should meet the criteria set out by the International Capital Market Association (ICMA) as the Green Bond Principles (GBP). The rules are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond.

The Green Bond Principles have four core components:

  1. Use of Proceeds
  2. Project Evaluation and Selection
  3. Management of funds
  4. Reporting

Each Green Bond issuer draws up a summary illustrating their key features in line with the GBP guidelines as a Green Bond Framework document.

It is recommended that in connection with the issuance of a Green Bond, issuers appoint an external review provider to confirm the alignment of their bond with the core components of the GBP. An institution with environmental expertise that is independent from the issuer may issue a Second Party Opinion. PKO Bank Hipoteczny has obtained second party opinion as a confirmation of compliance of the Green Covered Bond Framework with GBP from Sustainalytics - the certified international provider.

The criteria for assessing energy efficient buildings financed by PKO Bank Hipoteczny, taking into account market data and legal regulations in force, were developed for the Bank by a green buildings consultant - the German company Drees&Sommer. These criteria have been approved by the independent international organization Climate Bonds Initiative under their Low Carbon Buildings Criteria as proxy for the green residential properties in Poland.

Green Covered Bonds issued by PKO Bank Hipoteczny are certified by Climate Bonds Initiative. The certification is awarded to bonds meeting the highest international standards in terms of positive environmental impact.





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