Tenaga Nasional Bhd (TNB) has unveiled its first Transition Finance Framework, which details the company’s strategy to engage in sustainable finance transactions (SFTs) through loans or sukuk. These transactions will support projects that aim to have positive societal and environmental impacts, aligning with TNB’s decarbonisation and energy transition initiatives.
The framework allows TNB to utilize various financial instruments for its SFTs, including sustainable and responsible investment (SRI), green, social, and sustainability (GSS) bonds, as well as transition loans. The funds raised will be allocated to eligible categories such as renewable energy projects, energy efficiency initiatives, affordable basic infrastructure, clean transportation projects, and low carbon power generation projects.
TNB emphasized that the framework prioritizes transparency and disclosures regarding the governing and decision-making processes involved in SFTs. This includes environmental and social risk management practices in line with market best practices, reinforcing the credibility of such transactions. The company’s overall sustainability strategy and Energy Transition Plan are key considerations in these financial activities.
Maybank Investment Bank Bhd played a crucial role as the sustainability framework adviser for developing the framework, while Sustainalytics provided a second-party opinion on its alignment with relevant guidelines, principles, and standards. The International Capital Market Association’s Climate Transition Finance Handbook 2023 recommendations were also considered in the framework’s development.
Morningstar Sustainalytics, a global leader in environmental, social, and governance risk assessment, has endorsed TNB’s Transition Finance Framework. This recognition adds further credibility to TNB’s commitment to sustainability and responsible financial practices.
In line with its sustainability commitments, TNB has set a target to achieve net-zero emissions by 2050. This ambitious goal is part of the company’s Sustainability Pathway 2050 and Energy Transition Plan, which outline its long-term environmental objectives and strategies.
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