JBIC announced the loan into a facility for Irkutsk Oil (IRK), a Russian upstream oil and gas operator, in order for IRK to equip a petrochemical plant in Eastern Siberia. We again recommend investors to review whether the risk-premiums of the JBIC bonds offered in the market are proportionate to the potential carbon emission funding liabilities through the entity’s balance sheet.
We expect the carbon intensity of SSA portfolios to come under further scrutiny in 2022. Furthermore, with JBIC having roadshowed a green bond framework in Dec 2021 and a deal just being announced, we opine that potential investors should conduct a thorough due diligence on the climate strategy of the issuer as well as potential reputational risk factors associated with these investments.
