Ministry of
Finance

Government of Chile

Chile’s Sustainable
Bond Framework
November 2020

2 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

This publication contains the Republic of Chile’s
Sustainable Bond Framework, as published in
November, 2020.
This document is available in the Ministry of
Finance webpage, on the Sustainable Bonds
section.
A publication of the Public Debt Office of the
Ministry of Finance of Chile.
All Rights Reserved

Content
Introduction

Page 05

01

Sustainable Development
Goals and International
Commitments
Page 0802

Chile’s
Priorities

1. Environmental
2. Social
Definition of target population insocial matters

03
Use of Proceeds
Exclusions

Chile’s
Sustainable Bond
Framework

Page 10

Page 11
Page 13
Page 16

Page 18

Page 19
Page 28

04
05

Project Evaluationand Selection
Process
Page 29

Managementof Proceeds

06

Reporting Process Page 35

Allocation Report
Eligibility Report
Impact Report

Page 33

Page 37
Page 37
Page 37

Introduction

6 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Chile seeks to transition from a middle-income
to a high-income economy in a sustainable
manner that considers economic, environmental
and social dimensions. In this sense, the publicprivate investment plan that will support therecovery of the Chilean economy in the coming
years considers these different dimensions, witha particular emphasis on environmental andsocial areas. The incorporation of social criteria
in the issuance of its sovereign bonds, along with
its green bond issuances, are concrete steps
in Chile’s shift towards a sustainable financing
strategy that facilitates inclusive development
and promotes economic growth.
Over the years, Chile has strengthened its
commitment to mitigation of climate change
and to environmental protection. It has clearlyreceived the imminent need to transition
towards a low-carbon economy, and as part of its
actions, various ministries, including the Ministryof Finance (MoF) have created specialized areas
to deal with climate change, promoting publicprivate cooperation, including the considerationof climate change in international negotiations.
The Ministry of Finance, responsible for thecountry’s fiscal policy, has taken on a key rolein channeling public and private capital flows
to support and comply with environmental
commitments, which can be seen in diverse
initiatives that have constituted importantmilestones over time. In particular, the Ministerof Finance of Chile, Ignacio Briones, is the coChair of the Coalition of Finance Ministers for
Climate Action, while on the national side, theMinistry has been leading several initiatives
including the Public-Private Green FinanceRoundtable (Mesa público-privada de Finanzas

Verdes), the publication of the first National
Financial Strategy to deal with climate change
and the first Sovereign Green Bond Framework.
This framework, established in 2019, has served
as a tool to channel investments towards green
assets, and contributes to greater financial
development while promoting financial
innovation that supports the country’s path
towards sustainable development, with low
carbon emissions and strong capacity forresilience to climate change. The issuance ofsovereign green bonds under that framework
in 2019 and 2020, provided positive financial
results on several dimensions while at the sametime demonstrated Chile’s commitment toclimate action.
Recognizing the country’s comprehensive
commitment to sustainable development, and inaccordance with the Sustainable Development
Goals established by the United Nations in 2015,
the Ministry of Finance has decided to incorporatesocial aspects of sustainable development into
its financing strategy.
Chile has made substantial progress in reducing
poverty since the 1990s. In particular, income
poverty, according to the survey from CASEN(Caracterización Socioeconómica Nacional /National Socioeconomic Characterization), has
fallen from 68% in 1990 to 8.6% in 2017, themost recent year for which data is available.
This decrease in poverty reflects the impact of
economic growth on people’s income, along with
policies focused on direct transfers to extremely
vulnerable groups and conditional transfers
aimed at improving people’s employment
income.

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

However, various factors have emerged in theanalysis of poverty. First of all, the decline
in poverty has slowed in recent years, which
demonstrates the need to continue the efforts
made in the past, but also to apply measuresthat deal directly with its root causes. Secondly,
there have been changes in how vulnerability
is understood, and to understand current
vulnerability, new factors have to be considered,beyond just income. This has already been shown
through the modifications made to the CASEN
survey, which since 2015 has allowed for themeasurement of poverty in a multidimensionalmanner, and points to a broader and morecomprehensive direction for designing different
social policies. Thirdly, income inequality has
played a dominant role in the public discussion,
which is why the focus on social programs andimprovements in efficiency in public expenditures
has become a pillar of the social strategy.
The Ministry of Finance has therefore decided to
update its sovereign green bond framework in
2020, to incorporate the possibility of issuing not
only green bonds, but also social and sustainablebonds, moving from a purely environmental
perspective towards a sustainable one, taking
into account the global nature of sustainable
development, while incorporating a more
complex vision of vulnerability. In this manner,
Chile has decided to provide greater emphasis
to social policies in its sustainable financing.
Accordingly, the following have been included as
strategic pillars:• Growth with equality, through policies aimed
at the sources of inequality, such as those to7

improve education for vulnerable groups andothers aimed at improving the pensions ofelderly in a situation of vulnerability;• Greater access to quality education,
increasing access to public services of thisnature;• Access to housing programs;.
• Improvement in vital indicators throughnutritional programs for vulnerable groups
and other health programs; and,• Continuation of poverty reduction, without
neglecting economic growth, through job
support programs.
Finally, COVID-19 has had a significant impact onhouseholds and firms in the Chilean economy. In
this regard, the authorities have implemented abroad set of measures aimed at mitigating the
economic and social effects of the pandemic;
these expenditures are also included in thisSustainable Bond Framework. Sustainable growthis impossible without considering the complex
consequences derived from a crisis such as
this one, which is why the Framework has been
adapted taking into consideration the necessary
funding to manage the current crisis and otherpotential socioeconomic crises stemming fromevents such as a pandemic or other natural
disasters.

8 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 202001

Sustainable
Development
Goals andInternational
Commitments

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

In September of 2015, along with 193 member
countries of the United Nations (UN), Chile adopted
the 2030 Sustainable Development Agenda, anaction plan on behalf of the people, the planet
and prosperity, aimed at strengthening universal
peace within a broader concept of liberty. Chile
made the commitment to advance the 17 goals
included in this Agenda, with an emphasis in thesocial realm on poverty, zero hunger, genderequality, quality education and reduction of
inequalities. From the environmental point ofview, emphasis was placed on having accessible
non-polluting energy, sustainable cities andcommunities, responsible production andconsumption on behalf of the climate, submarine
life and the life of terrestrial ecosystems. Of
course, all of these objectives are framed withina fundamental pillar aimed at development, so it
must be remembered that these objectives arepart of global ones, such as decent employment
and economic growth.
The Sustainable Development Goals are useful
not only to establish the country’s commitments
in social, environmental and developmental
matters but also because they help to define ageneral framework upon which to design policies
and initiatives that would guarantee sustainable
and even inclusive growth. In 2019, Chile
presented its second Voluntary National Reporton the 2030 Sustainable Development Agenda.
Chile also has had a tradition of international
cooperation, ratifying a series of treaties
throughout its history. Regarding social
commitments, Chile ratified the Universal
Declaration of Human Rights, which was
amplified through the International Covenantof Civil and Political Rights and the International
Covenant on Economic, Social and Cultural
Rights, both of which are from 1966, and the1989 Convention on the Rights of the Child.
Additionally, the country is a party to the9

Ibero-American Multilateral Agreement on
Social Security (Convenio Iberoamericano deSeguridad Social), which is complemented by
25 agreements with different countries. Parts of
those agreements are included in the currentlyin-effect Political Constitution, which establishes
a series of rights for all people, such as the rightto live in a pollution-free environment, the rightto good health, the right to education, freedomof employment and protection for the right tosocial security.
From an environmental perspective, Chile
ratified the Paris Agreement in February of
2017, by means of Supreme Decree N° 30 of
the Ministry of Foreign Affairs, and presented its
Intended Nationally Determined Contribution(INDC) before the United Nations Framework
Convention on Climate Change in September of2015.
In April of 2020 and in response to therequirements of the Paris Agreement to update
its commitments every five years, Chile formallypresented its updated Nationally Determined
Contribution (NDC). This milestone makes it
one of the world’s first countries to update its
commitments to climate action. The updated
NDC also addresses the major requirementsof the scientific community and considers
commitments in five areas: i) social pillar forjust transition and sustainable development, ii)
mitigation, iii) adaptation, iv) integration, and v)
means of implementation.
On the mitigation side, Chile committed toreplace its previous emissions intensity indicatorwith an unconditional absolute indicator, withthe goal of reaching 95 MtCO2eq for 2030, thepeak year in 2025 and a carbon budget that will
not exceed 1.100 MtCO2eq for the 2020-2030
period.

10 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

02

Chile’s
Priorities

CCHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 202011

The following is a description of Chile’s
current priorities in the following areas: (1)Environmental, (2) Social and (3) Economic andhandling of socioeconomic risks.

1. Environmental
Chile’s greenhouse gas emissions (GHG) accounted
for approximately 0.25% of worldwide emissions
in 2016, with a per capita average slightly above
the worldwide average but still below that of
the OECD countries. Nevertheless, the country’s
emissions have increased constantly over recent
decades (Ministry of Environment - MMA, 2020).
Chile is highly vulnerable to climate change.
According to the Global Climate Risk Index
2019, which measures the impact of extreme
meteorological phenomena based on deaths andeconomic losses, Chile is near the top of the list,
ranking 16th among 181 countries. Among otherresults, this has led to a decrease in available
water resources due to reduced precipitation,
increased temperatures and accelerated meltingof the cryosphere.
In response, Chile is in the process of updating
and improving its policies and commitments
regarding climate change, framed in a longterm vision whose goal is greenhouse gas
emissions neutrality and increased resilience by
2050, aligned with the intermediate objectives
expressed in the NDC.
The country currently has a Draft Framework
Bill on Climate Change under discussion in
the National Congress, which defines concrete
management instruments such as the LongTerm Climate Strategy (ECLP from its Spanish
acronym) currently being drafted and whose goal
is to determine guidelines to be followed by thecountry to achieve emission neutrality by 2050.
In terms of funding, Chile has a Financial Strategy
to face Climate Change (EFCC), which defines aframework for action based on three axes thatguide contributions by the public and private
sectors for consolidation of a low emissions
economy that is resilient to the climate, without
neglecting the country’s capacity for growth anddevelopment. The Strategy will be updated inaccordance with the guidelines defined in the
Draft Bill and the ECLP.
In this context and as part of the third pillar of
the EFCC, Chile is promoting new and profitableways to accelerate emissions reductions,aligning financial flows towards a low carbon
emission and climate resilient economy. The
development of a local and international market
for green bonds to finance the country’s needs
for sustainable development is considered anessential tool.
Issuance of the first Sovereign Green Bonds in2019 was an important milestone, which madeChile the first issuer of sovereign green bonds

12 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020in the Americas, establishing a benchmark for
future sovereign issuances in the region. In thefirst issuance of 2019, the dollar-based green
bonds was oversubscribed by 13X, and achieved
a new issue premium of -5 bps. The eurodenominated issuance met a demand equal
to 4.7X and achieved a new issue premium of-10 bps. Additionally, those issuances achieved
participation by ESG investors of 35% and76%, respectively. During 2020, the green
bonds issued in 2019 were reopened and newones were issued in each currency. Thus, as of
September of 2020, Chile had issued a total of
US$ 6.2 billion in Sovereign Green Bonds, with aportfolio of projects in the Clean Transportation,
Renewable Energy, Water Risk Management andGreen Buildings sectors.
In light of the above, and in line with the country’s
strategic priorities, this framework reaffirms theclimate financing priorities established in 2019,
which define the following typologies of projects
to be financed:• Clean transportation;• Energy efficiency;• Renewable energy;• Natural resources, land use and use ofprotected marine areas;• Efficient and climate resilient water
management;• Green buildings.
The above-mentioned areas reflect therelevance of infrastructure in Chile for thecountry’s sustainable development, providing
support for the progress of key productive sectors
and for social well-being. However, given the

country’s exposure to impacts associated withclimate change, it is essential that infrastructuredevelopment prevent and mitigate thegeneration of greenhouse gases and take into
account future variations in climate patterns in
the different phases of the lifecycle of projects.
Thus, the Government of Chile, in response to thecommitments adopted under the INDC of 2015,
has proposed a change of paradigm in managing
the lifecycle of public works as part of its 20172022 National Action Plan for Climate Change.
In the framework of this Plan, in November of
2017, the Council of Ministers for Sustainability
approved the Plan for Mitigation and Adaptation
to Climate Change for Infrastructure Services,
the first of its kind in Latin America andwhich contributes towards adjusting planned
infrastructure designs to mitigate the mostserious impacts of climate change at thecommunity, regional and national levels.

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The updated NDC includes a commitment to
update that Plan until 2023 and also establishes
that, until 2030, each water-related public
infrastructure project in its evaluation willcontemplate protection for the population andterritory (through water works) and/or deal withdemands associated with urban and/or rural
consumption in their area of influence.

2. Social
The Government of Chile has included attention
for social areas in its administration, considering
the importance of understanding vulnerability
from a multidimensional view, beyond justincome. In this context, the Sustainable
Development Goals defined by the UN acquire apriority role.
While the country has been successful interms of poverty reduction in the last 30 years,
income inequality has been an area where Chile

13

continues to face challenges. Thus, while theincorporation of attention for environmental
matters through sovereign bond issuances has
been an important step, Chile wants to advancefurther, incorporating social issues in its bondissuances.
What follows is a detailed breakdown of the social
topics that are relevant for this Sustainable Bond
Framework.
• Support for vulnerable groups
Different policies have facilitated progress in the
country’s social agenda. In terms of surmounting
poverty, direct transfers have been promoted for
different groups, particularly those of extreme
vulnerability. Also, a series of measures has
been designed such as Charitable Chile (Chile
Solidario) and the Subsystem of Securities andOpportunities (Subsistema de Seguridades y
Oportunidades), which aims to provide support
and opportunities for social integration fordifferent sectors of extreme vulnerability.
Additionally, Chile has intensified the deliveryof targeted conditional transfers to overcome
poverty. One of the most important programshas been the Unique Family Subsidy (SubsidioÚnico Familiar), which has existed for nearly 40
years and to which other programs have been
added that supplement employment income.
In this last group, it is important to mention the
Women’s Employment Bond (Bono al Trabajo dela Mujer) and the Youth Employment Subsidy(Subsidio al Empleo Joven), which progressively
increases the incomes of workers from the mostvulnerable groups to encourage participation in
the formal labor market. Conditional transfers in
the most recent years include the Guaranteed
Minimum Income, which benefits all workers
working full days whose incomes are close to
the minimum wage, with a design similar to thenegative taxes used in different countries of theworld.

14 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

• Pensions
Demographic dynamics have posed important
challenges for pension systems across theglobe, including Chile. The expansion of the socalled Solidarity Pillar (basic Solidarity Pension
and Solidarity Contribution (Aporte Previsional
Solidario) of the national pension system has
been essential for providing better incomes forvulnerable elders. Non-contributory pensions
have their origins in 1975 with the Subsidized
Pension Program (Programa de Pensiones
Asistenciales), but became relevant since 2007
with the creation of the Basic Solidarity Pension(Pensión Básica Solidaria) and the Solidarity
Contribution (Aporte Previsional Solidario). Those
benefits aim to provide a pension for elder adults
who have not contributed enough or to improve
the situation of senior adults with a retirement
or disability pension below a certain threshold.
In 2019, the benefits of the Basic Solidarity
Pension (Pensión Básica Solidaria) and the Aporte
Previsional Solidario rose by 50%, significantly
increasing the benefits received by older adults.
• Health
In the field of health, one of the most importantreforms of the last 20 years has been the Explicit
Guarantees System (Régimen de Garantías
Explícitas, GES), implemented in 2005. The GES
consists of four guarantees: universality, financial
protection, equality and opportunity, with thislast aspect being one of the most relevant for the
population. In its beginnings, the system covered
25 health problems and currently covers 85
pathologies that represent the great majority ofmorbidity at the national level. The GES has alsoenabled access for millions of people to different
health services, which has not caused any
decline in the incomes of those same families.
There is also an improvement in the efficiencyof health systems, both public and private, which
has enabled Chile to reach a life expectancy
similar to the average of OECD economies, withlower per capita health expenditures. Finally,
and as a result of population aging, cancer has
become the main cause of death at the national
level. The National Cancer Law was therefore
recently enacted, which strengthens the network
for public attention with six specialized centersthroughout the country, along with the creationof a fund that facilitates the capitalization of
resources from different sectors.
• Education
The educational system has seen a greater
injection of public funds in recent years. The firststep was the creation of the Preferential School
Subsidy in 2008, which allocates funds according
to the degree of vulnerability of students at
those establishments. Along with the rest of
the subsidies that finance the school education
system, the 2015 School Inclusion Law (Ley deInclusión Escolar), among a series of measures,
eliminates co-payments at establishments
subsidized by the State, increasing the proportion

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020of public expenditure in education. In higher
education, the country has historically sought
to increase scholarships for households thatsatisfy diverse requirements, which have been
supplemented with loans at preferential interest
rates with the State as guarantor. In 2016, freehigher education went into effect for vulnerable
households, which aimed to prevent excessive
indebtedness by students during their higher
education studies.
As a whole, the country’s main challenges,
poverty and inequality, show the need tocontinue with even more effective policies thatwould deal with the root of the problem. This
includes policies for education, food security andprotection for vulnerable groups. These policies
must be complemented with others to mitigate
the effects of unemployment and improvepensions.
As a middle-income country seeking a higher
level of development in the future, Chile aims topursue its sustainable development goal throughgrowth with equality, greater access to quality
education, access to housing, improvements invital indicators and the continuation of poverty
reduction.
In line with the afore-mentioned strategic
priorities, the present framework establishes thefollowing typologies of projects to be funded:• Support for the elderly;• Support for those with special needsfrom vulnerable sectors;• Support for low-income families;• Support for human rights victims;• Support for the community through job
creation;15• Affordable housing;• Access to education;• Food security;• Access to essential services, including
health;• Focus on unemployment stemming fromsocioeconomic crises and support for
SMEs

Definition of target population insocial matters.
As a tool for targeting vulnerable citizens, theHousehold Social Register (Registro Socialde Hogares - RSH) is the main instrument for
selecting beneficiaries of the different social
programs. For its construction, information
reported by the members of each household
is compiled to later be supplemented throughdiverse administrative records.
The households that make up the RSH aregrouped into seven Socioeconomic Classificationgroups (CSE, from its Spanish acronym), in
which each group represents a certain degreeof vulnerability relative to the national
population. The construction of the groups isbased on the autonomous incomes generated
by each household as a whole. Incomes areadjusted according to the household members,
according to age and situation of disability, ifany, a figure known as the index of needs. At thesame time, comparisons are made with diverse
administrative records to correct informationin terms of land tenure, vehicles or high-value
health plans in relation to the national reality. In
this way, seven levels of vulnerability are created,which represent the total national population.
Graph 1 depicts the levels in relation to income.

16 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Graph 1 Levels of Socioeconomic Classification (CSE) according to income
Section 2
41%-50%Section 3
51%-60%Section 6
81%-90%Section 5
71%-80%Section 7
91%-100%

Lower Income

Higher Income

Section 1
0%-40%

Section 4
61%-70%Source: Ministry of Finance.

As shown in Graph 2, Chile focuses 81% of
total targeted social expenditure using the CSE

on levels 1, 2 and 3, which represent the mostvulnerable 60% of the population.

Graph 2 Distribution of allocated social expenditure using the 2017 Socioeconomic Classification of
the Social Registry of Households (Clasificación Socioeconómica del Registro Social de Hogares).
6%

3%

10%

81%

Up to 60%

Up to 70%

Up to 80%

Up to 90%

Source: Report on the Social Registry of Households, Undersecretary for Social Evaluation, Ministry of Social Development (2018).

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Finally, it is worth noting that 11 ministries use
the RSH to target their own programs.
The National Socioeconomic Characterization
Survey (CASEN) is the main survey used at
the national level to determine the country’ssocioeconomic reality. Based on the 2017
CASEN survey (the latest available), one may
determine the characteristics of vulnerability ofthe population at levels 1, 2 and 3 as mentioned
above. Quantitatively, those households arecomposed on average of 3.5 members, andtheir income per head is approximately US$150
per month, whereas the minimum wage at thenational level is around $410. Approximately
45% of the heads of household in this groupare high school graduates, and only 8.6% have
university degrees, which is also reflected in thefact that nearly 30% of heads of household are
unskilled workers. The needs of these households
are also greater compared with the rest of the
population, because around half have at least one
member with some type of disability or difficultyin their daily lives, and 29% include at least
one older adult. Finally, of the most vulnerable
60% of households, approximately 10% live
in medium to low, high or critical conditions ofovercrowding.
Another way to characterize and understand theneeds of households at the top three levels ofvulnerability is to analyze the dimensions thatdefine multidimensional poverty. In education,
42% of such households suffer from lack ofschooling, meaning that there is at least one
person over the age of 18 who has not had theyears of schooling established by law. In health,
7% of households include a child under the ageof six in a state of malnutrition. In employment,
13% of households include an adult who
cannot find work. Social security, particularly
with respect to pensions, is a worrisome aspect
for the group under analysis, because 35% of

17households whose members are employed do notcontribute into the pension system. Additionally,lack of retirement income is another issue that
calls for attention. Of the households belonging
to the most vulnerable 60%, 13% include anolder adult who does not receive any income
other than a pension.
This reality, along with the above-mentioned
priorities in the social realm (fight against
poverty and inequality), somehow determines
the design in which Chile intends to advance interms of social policies, fundamentally throughthe design and implementation of conditionaltransfers to help households overcome thepoverty line and improve their quality of life.

3. Economics and Handling ofSocioeconomic Risks
Finally, the Ministry of Finance seeks to efficiently
and responsibly manage government finances
while promoting and encouraging sustainable
development – in this perspective, andconsistently with Sustainable Development Goal
relative to Decent Employment and Economic
Growth, it considers as well risks stemming fromhealth crises (for example COVID-19) or otherevents with high socioeconomic impact (forexample severe earthquakes). The Government ofChile understands that sustainable development
requires considering environmental and social
variables but also a focus on appropriate funding
to deal with disastrous events that could havelong-term effects on different variables ofdevelopment. Thus, the country’s objectives also
include support for health programs in national
emergencies, along with programs designed
to prevent and/or alleviate unemployment
stemming from socioeconomic crises, financing
SMEs and micro finances.

18

03

Chile’s
Sustainable
Bond
Framework

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The purpose of this document is to present indetail the Framework for Social Bonds, Green
Bonds and Sustainable Bonds of Chile, basedon the country’s general strategy for climatechange and social policies. This Framework may
be updated by the Public Debt Office of the
Ministry of Finance (MoF), as needed.
The Sustainable Bond Framework establishes
the commitments and obligations that the
government, through its Public Debt Office, must
fulfill as an issuer of a thematic bond. From afinancial and legal point of view, these bonds must
fulfill the existing obligations for bond issuances,as established by the Ministry of Finance pursuant
to the State Financial Administration Law (Ley deAdministración Financiera del Estado -D.L. N °1.263) of 1975, article 3 of the Budget Law (LeyN ° 21,192), along with Future Budget laws thatgovern debt issuances. The Ministry of Finance isthe entity responsible for implementation of the
Framework.
Interest and capital payments on the bonds
issued under this Framework shall be theresponsibility of the Treasury. Investors in thebonds issued under this Framework assume norisk associated with any of the projects in theunderlying portfolio. Similarly, bonds issued
under this Framework rank pari passu with other
Bonds of the State of Chile.
This Framework has been developed following thehighest market standards: the eligible categories
established in the Framework are aligned with
the Green Bond Principles of 2018, Social Bond
Principles of 2020, the Sustainability Bond
Guidelines of 2018 published by the International
Capital Markets Association (ICMA), and theUnited Nations Sustainable Development Goals.
The following are the four main components ofthese principles:(i) Use of Proceeds

19(ii) Process for Project Evaluation and Selection(iii) Management of Proceeds(iv) Reporting; including a reference to External
Reviews.

Use of Proceeds
An amount equal to the net proceeds obtained
from any government issue under this Framework
shall be allocated to finance new Green or
Eligible Social Expenditures (as defined below)
and/or refinance existing Green or Eligible Social
Expenditures.
The Green Expenditures and Eligible Social
Expenditures are considered in the budget of thecentral government of Chile, and which fulfill
the requirements for one of the Green Sectors
defined in the section on Green Sectors andSocial Sectors or Socioeconomic Risk Sectors
defined in the section on Social Sectors. These
are aimed at promoting Chile’s transition toan economy with low carbon emissions that isclimate resilient with sustainable development.
Eligible Expenditures may include:• Tax expenditures (fiscal exemptions andsubsidies)• Operational expenditures (funding forstate agencies, local authorities andcompanies that contribute towards
deployment of the country’s social,environmental and climate strategy)• Investments in real assets (land, energy
efficiency,
infrastructure,
hospitalsetc.) and maintenance costs for public
infrastructure

20 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

• Intangible assets (research and innovation,
human capital and organization)• Transfers of capital to public or private
entities.

I. Green Sectors

expenditures, and which could be considered
as eligible Green Expenditures. Six sectors havebeen defined: (1) clean transport, (2) energy
efficiency, (3) renewable energy, (4) living natural
resources, land use and use of protected marine
areas, (5) efficient and climate resilient water
management and 6) green buildings.

The following is a list of green sectors thatcan be relevant when classifying budgetary
Table 1 Eligible Green Sectors
Green Sectors

Eligible Green Expenditures
Promote public transport and support forintermodal transport stations
Eligible green expenditures include:»»Investment in public infrastructure,
assets associated with intermodal
stations and electric public transport• Metro lines: new lines, enlargement
and renovation

Clean
Transportation• Electric buses, charging stations
for electric vehicles• Other public transport such as
streetcars and trains• Intermodal infrastructure toconnect different means of clean
public transportation, monitoring
and control systems, passenger
safety systems and infrastructure
along with bicycle paths andparking»»Subsidies or incentives to promote
public transportation

Environmental Benefits
Climate change mitigation
Air quality improvement
Greenhouse gases reduction
through the promotion of low
carbon mean of transportation

Contributions

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Green Sectors

Eligible Green Expenditures
Support improved energy efficiency inbuildings and public spaces
Eligible green expenditures include:

EnergyEfficiency

Environmental Benefits

Contributions

Climate change mitigation
Energy savings
Greenhouse gas reduction»»Investments in energy efficiency inpublic buildings which result in savings
higher than 20%: including (but notlimited to) retrofit, thermal insulation
and/or updgrades of air-conditioning
system»»Subsidies dedicated to energy
efficiency improvements in housing,including (but not limited to) a)
improvements on houses’ insulation, b)
solar heating systems, c) photovoltaic
systems»»Public lighting improvements (e.g.
replacements with LEDs)
Promote the development of renewableenergy technologies
The eligible green expenditures include:»»Investments in projects for non-fossil
fuel renewable energy sources, such as

Climate change mitigation
Long-term provision of lowcarbon infrastructure
Greenhouse gases reduction• Wind energy1 (onshore)
Renewable
Energy21• Solar energy1 (onshore)• Small run-of-river hydro plants(under 25MW)»»Investments in solar/wind power
projects (onshore) that include energy
generation and storage (batteries)»»Training programs to increase technicalknowledge in vocational education
centers for renewable energy
installations

1 The solar and wind power installations must not have more than 15% of their electricity generated from nonrenewable sources (CBI
certification requirements CBI).

22 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Green Sectors

Eligible Green Expenditures
Promote proper care in land use,biodiversity preservation and protectedmarine areas
The eligible green expenditures include:»»Forestry

Living natural
resources, land
use and marine
protected
areas

Environmental Benefits
Climate change mitigation
Conservation and sustainable
use of terrestrial ecosystems
Conservation of biodiversity
and protection for terrestrial
ecosystems• Programs for conservation andrestoration of native and exotic
forests• Management and maintenance of
National Parks and conservation
areas»»Protection and oversight for protectedmarine areas (including research)

Efficientand climate
resilient water
management

Promote sustainable water management
to guarantee water supply

Conservation of water
resources»»Water distribution: installation or
upgrade of water efficient irrigation
systems, construction or improvementof sustainable infrastructure for potablewater (including research or studies)

Climate change adaptation»»Wastewater management: installation
or improvement of wastewater
infrastructure, including transport,
treatment and elimination systems»»Conservation of water resources:
including protection for water
catchment zones and prevention ofpollution that affects water supplies»»Systems for defense against riverflooding: including building reservoirs tocontrol water flows

Reduction of water
consumption
Climate change adaptation andresilience, considering extreme
meteorological events

Contributions

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Green Sectors

Eligible Green Expenditures
Construction and modernization of
public buildings, with a 30% minimum
reduction in carbon in line with the CBIstandard
The eligible green expenditures include:Greenbuildings(ecologicalbuildings)

Environmental Benefits

23

Contributions

Climate change mitigation
Energy savings
Greenhouse emission reduction»»Design and construction of publicbuildings certified under the
National System for Certification ofEnvironmental Quality and Energy
Efficiency for buildings of public use(“Sistema Nacional de Certificaciónde Calidad Ambiental y Eficiencia
Energética para Edificios de Uso
Público”) (CES)»»The costs associated withmodernization of existing publicbuildings to comply with “Sustainable
Building Certification” or to improve thecurrent certification level

The green sectors comply with the international
climate bonds taxonomy and, when feasible, arealso adjusted in accordance with the relevant
eligibility criteria by virtue of the climate bonds
standard (in other words, when criteria are
available for the corresponding expenditures).
Additionally, when available, other conventions
may also be taken into account, such as:
taxonomies and local, regional or national
certifications to determine that an asset is
low-carbon and climate resistant (for example,
references from the Joint Report on MultilateralDevelopment Banks’Climate Finance; standards
for buildings, etc.).

II. Social Sectors
The following is a list of the Eligible Social
Expenditures. Nine sectors have been defined:(1) Support for the elderly or people with special
needs in vulnerable situation, (2) Support for lowincome families, (3) Support for the community

through job creation, (4) Support for humanrights victims, (5) Access to affordable housing,(6) Access to education, (7) Food security, (8)Access to essential health services and (9) Social
programs designed to prevent and/or alleviate
unemployment derived from socioeconomic crisis,
and financing SMEs and micro-finance.

24 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Table 2 Eligible Social Sectors
Eligible
Category

Support for
the elderly or
people withspecial needs
in vulnerable
situation

Eligibility Criteria

Social Benefit

Finance basic pensions for the most vulnerable(those belonging to the 60% of the population withthe lowest income according to the Social Registryof Households/Registro Social de Hogares). Some of
the included programs are as follows:»»Improvement onsocial inclusion andcohesion»»Pensión Básica Solidaria de Vejez y Aporte
Previsional Solidario de Vejez (Basic Solidarity
Old-age Pension and Solidarity Old-age
pension)●»»Poverty reduction»»Pensión Básica Solidaria de Invalidez y Aporte
Previsional de Invalidez (Basic Solidarity
Disability Pension and Disability Contribution
Pension) aimed at people certified as disabledby the Regional Medical Disability Commissionsof the Superintendence of Pensions.
»»Transfers per Child (contribution to pensions forvulnerable mothers)

Support for
low-income
families

Finance actions and measures aimed at thecountry’s most vulnerable families* using subsidies
or contributions for low-income families, throughsuch programs as:»»Aporte Familiar Permanente (Permanent
Family Subsidy)»»Family Subsidy»»Winter Bond*one of the requirements is to be in the lowest
60% of the population in terms of income
according to the Social Registry of Households(Registro Social de Hogares).

Support forhuman rights
victims

Monetary transfers for beneficiaries of the Statethrough the Leyes Reparatorias de Derechos
Humanos (Human Rights Reparatory Laws) aimed at
victims directly affected by human rights violations,exonerated politicians and family members ofvictims of human rights violations or politicalviolence between 1973 and 1990.

»»Improvement
on socialinclusion andcohesion

Supportfor thecommunity
through job
creation

Financing of projects to generate employment in, forexample, regions with the highest unemployment(unemployment levels above the national average),through the financing of intensive projects in theuse of manpower aimed at generating a positive
impact in the community. This includes, but is not
limited to, projects such as the Programa Inversión
en la Comunidad (Program for Investment in theCommunity).

»»Generar empleo

Contribution to
MDGs

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Eligible
Category

Eligibility Criteria
Financing for families of vulnerable sectors* for theacquisition, repair, enlargement, improvement andrefurbishment of housing.
Eligible programs (or part of them) include:»»Fondo Solidario de Elección de Vivienda DS49
(Solidarity Fund for Choosing Housing)Access to
Affordable
Housing»»Mejoramiento de Vivienda – (Housing
Improvement) - DS 27 Chapter II (Ex Protection
for Family Patrimony, Repair and Improvementof Housing);

Social Benefit»»Reduce
inequalitie»»Guaranteedaccess toaffordable
housing forvulnerable
population»»Reduce thehomeless
population»»Sistema Integrado de Subsidio Habitacional- DS1 (Integrated System for Habitational
Subsidy)»»Programa Habitacional de Integración Social
DS. 116-2014 and DS. 19-2016 (Habitational
Program for Social Integration)*Families in the 40% or 60% of the population with
low incomes (depending on the program) according
to the socioeconomic qualification established in
the Social Registry of Households.
Financing of programs aimed at improving quality
and access to nursery school, basic, middle andhigher education for vulnerable children andyoung people* or those with special needs.
The eligible programs include:• Gratuidad en Educación Superior (Free higher
education)

Access to
education• Subvención Escolar preferencial (Preferential
School Subsidy)• Jardines Infantiles y Salas Cuna Modalidad
Convencional (Conventional Modality ofKindergartens and Nursery Schools)• Jardín Clásico Administrado por Junji y Vía

Transferencia de Fondos (Classic Kindergarten
Administered by Junji and through FundTransfers)• Fondo de Apoyo a la Educación Pública (Public
Education Support Fund)• Beca Bicentenario (Bicentenary Scholarhips)»»Provide equal
access toaccessible andquality education
to include nurseryschool, basic,
middle, high andhigher education.

25

Contribution to
MDGs

26 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Eligible
Category

Eligibility Criteria

Access to
education*one of the requirements to be considered as apriority student pursuant to the definition by the
National Board for School Aid and Scholarships(Junta Nacional de Auxilio Escolar y Becas JUNAEB), is to be in the 60% of the population
with low incomes according to the Single Form forSocioeconomic Accreditation (Formulario Único de
Acreditación Socioeconómica - FUAS) or the Social
Registry of Households.

Financing of programs for access to healthy andnutritious food service for the most vulnerable
users * of the educational system.
The eligible programs include:• Programa de Alimentación Escolar;• Beca de Alimentación para Educación
Food Security

Superior;• School food program• Food scholarship for higher education)*students from families in the most vulnerable
60% or those with greater economic disadvantage(according to the Social Registry of Households)
who attend subsidized municipal or private
universities or educational establishments(affiliated with the PAE) in the pre-basic, basic andmiddle levels of education.
Financing the development of a healthcare
network with both preventive and curative
functions associated with locally declared statesof emergency stemming from health events,
including pandemics (i.e.: COVID-19).

Access to
Essential
HealthServices

The eligible social expenditures include:• Construction and/or expansion of medical
centers, laboratories and medical support
infrastructure• Purchase of medical consumables to deal withthe pandemic (Personal Protection Elements- PPE), installation of modular beds, monitors,
ventilators, diagnostic equipment, etc.)

Social Benefit»»Guarantee accessfor vulnerable
population to ahealthy, sufficient,
healthy and proper
nutrition.
»»Avoid malnutrition

Contribution to
MDGs

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Eligible
Category

Eligibility Criteria• Expenditures that enable access andaccessibility of diagnostics (i.e. free tests forbeneficiaries of Fonasa, setting of a maximum
price in private systems)

Access to
Essential
HealthServices• Expenditures that enable strengthening ofhome care• Reuse and/or conversion of services/

installations for medical care in response to
the pandemic

Social Benefit

Contribution to
MDGs»»Guaranteed
Access to healthcare system»»Strengthen the
response of thehealth system
in Chile to apandemic (i.e.:
COVID-19)• Other expenditures associated withpreventive care, treatment and public healthin relation to the pandemic

Socialprograms
designed toprevent and/or alleviate
unemployment
derived fromsocioeconomic
crises,includingthrough thepotential
effect offinancing SMEs
and micro
finances.

Financing of programs aimed at supporting
people whose income is strongly affected bysocioeconomic crises stemming from a declarationof a State of Catastrophe2 by the national
authorities (i.e.: pandemics, earthquakes, etc.), suchas:»»Strengthen family
incomes• Ley de Protección al Empleo (Job Protection
Law)• Bono de apoyo a los ingresos familiares(Support Bond for Family Incomes)• Ingreso Familiar de Emergencia (Emergency
Family Income)• Fondo solidario municipal (Municipal
Solidarity Fund)

Loans or other financial support for MSMES3
that face financial stress due to socioeconomic
crises stemming from the declaration of a Stateof Catastrophe4 by the national authorities (i.e.:
pandemics, earthquakes, etc.)

27»»Preventor reduce
unemployment

2For the purposes of the bond, the declaration of a State of Catastrophe due to wars is excluded as an eligible expenditure.

3According to the definition by the Internal Tax Service of Chile (Servicio de Impuestos Internos de Chile) http://www.sii.cl/contribuyentes/empresas_por_tamano/pymes.pdf
4For the purposes of the bond, the declaration of a State of Catastrophe due to wars is excluded as an eligible expenditure.

28 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Exclusions
Any project, asset or expenditure associatedwith the following activities will be excluded
from eligible expenditures:• Exploration and production of fossil fuels• Energy generation exclusively based onburning fossil fuels or hybrid plants withmore than 15% fossil fuel support• Construction of railtransport fossil fuels

infrastructure• Generation of nuclear energyto• Electricity transmission infrastructure andelectricity systems where an average of 25%
or more is fossil-fuel-generated;• Industries for alcohol, arms, tobacco, gamblingor palm oil• The production or trade of any product or
activity that is considered illegal according tonational laws or regulations or international
agreements and conventions• Deforestation, degradation of forests• Activities in protected areas or activities that
violate indigenous rights.

04

Project
Evaluationand Selection
Process

30 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The MoF has established a decision-making
process to determine the eligibility of projects,
assets and expenditures as part of the Sustainable
Bond Framework, including:• A declaration about the objectives(environmental or social) of the bond
• A process to determine the eligibility of the
project, assets and expenditures• The associated eligibility criteria, criteria
for exclusion or any other process used to

identify and manage environmental and/or social risks associated with the project.
As part of the process to determine theeligibility of projects, assets and expenditures(Figure 1), the MoF heads an inter-ministerial
committee called the “Sustainable Bond
Committee”, with the goal of supervisingcomplete implementation of this Framework,
including the allocation of funds received for
eligible projects and delivery of the reports toinvestors as referred to in the Reports Section.

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Figure 1

Evaluation and Selection process for Eligible Sustainable Expenditures6

Minister ofFinance

MoF requests Sustainable Project, Asset andExpenditure information from DIPRES (Budget
Office) and Ministries

Ministries

DIPRES

MoF & Ministry of Environment (MoE) or theSocial Politics Division (SPD) analyze and selectSustainable Project, Asset and Expenditure

MoF and
MoE/SPD

MoF issues Sustainable Bond against selectedSustainable Bond Project, Asset and Expenditure
portfolio

Ministry of
Finance

Treasury
MoF, through the Treasury, transfers proceeds to theGeneral AccountGeneral AccountMinistry A

Ministry B

Ministry n

Project 1

Project 2

Project 3

Selection
Allocation

6 Budget Office (Dipres)

Proceeds are nominally allocated to the different
eligible projects, by an amount equal to theissued amount31

32 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The Sustainable Bond Committee shall becomposed of representatives from the main
ministries responsible for governmental budget
execution. For the use of proceeds for green
activities, the included ministries shall be:
Ministry of the Environment (MoE), Ministryof Public Works, Ministry of Energy, Ministry ofTransport and Ministry of Agriculture, among
others. When dealing with the use of social
proceeds, the Department of Social Policies of the
Ministry of Finance along with the International
Finance Unit shall carry out the analysis andselection process.
The Ministry of Finance shall be responsible forthe following:• Review and validate the selection of eligible
green and social projects, assets andexpenditures, as established in the section
on the Use of Proceeds• Supervise the allocation of funds for eligible
projects, assets and expenditures• Manage any future updating of the Framework• Coordinate the preparation of reports, as
described in the Framework.
The Ministry of Finance has the final responsibility
to determine the list of eligible projects, whereas
the other ministries shall be responsible forproviding the requested documents and anyother additional information to verify eligibility.
Eligibility of these social programs is ensured
through ex-ante evaluation and periodic followup. The ex-ante evaluation is made by the Subsecretariat for Social Evaluation of the Ministryof Development and Family, which is usedas the basis for a report on relevance of thedesign of the program. If that evaluation wereto identify errors, both in its target populationand its components, the program could betechnically contested, which means that it must be
reformulated in the short-term. Additionally, andperiodically, follow-up reports are made on the
different social programs, in which the beneficiaries
of each component are analyzed. If a projectcontemplated in the bond is involved in a trial
associated with activities carried out in protectedareas, indigenous rights violations or nonfulfillment of labor legislation, the corresponding
project shall be withdrawn from the bond bydecision of the Sustainable Bond Committee. On
the other hand, the ex-post evaluations of thediverse social programs are made by the Budget
Office (Dirección de Presupuestos) with the aim ofidentifying potential errors in the design of eachone, evaluating their social impact and identifying
the relevance of its beneficiaries in the targeting
criteria, among others.

05

Managementof Proceeds

34 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

This Framework is a general approach applicable
to one or more future issuances. Each issuancespecifies the bonds under this framework that will
be linked to a specific group of eligible projects.
Management of the eligible expenditures
does not imply a direct link between funds andallocation (notional basis).
The Ministry of Finance will carry out followup activities on the eligible expenditures,
guaranteeing that an amount at least equal to thenet proceeds of the issuances completed under
this framework will be allocated to financing
and/or refinancing of expenditures that fulfill theeligibility criteria established in this document.
If one or more of the projects initially included
in an issuance no longer fulfills the abovementioned eligibility criteria, due to changes in
its nature or implementation, the expenditures
for financing or refinancing associated with thespecific bond shall not be considered. That is why
the total value of eligible projects, assets andexpenditures associated with a particular bondwill be greater than the amount of the issue, toavoid the need to include new projects in casesome projects are no longer eligible, there aredelays in execution and/or possible cancellationsof projects.

In the context of this Framework, expenditures
shall include recent expenditures (allexpenditures made in the previous year) andCurrent Expenditures (all expenditures to bemade in the current year) and, if necessary,
could also include future expenditures (inother words, to be made in coming years). For
each bond and prior to its issuance, Chile shallissue a report that at a minimum contains theestimated percentage of recent expenditures
financed through the bond, and the estimatedperiod of disbursement. This report shall be
published on the Ministry’s website.
The net proceeds from the issuances will betransferred to the general account of Chile(the “Cuenta General”). While awaiting total
allocation of the revenue from the Bond, theMinistry of Finance will administer the revenues
pursuant to article 12 of Law number 20,128(“Fiscal Responsibility Law”), which establishes
that investment of the proceeds shall bedecided by the Ministry of Finance, pursuant
to the regulation contained in article 3 of Law
Decree No. 1,056.
The Ministry of Finance guarantees that
allocation of the revenues does not permit thesame project to be counted twice.

06

Reporting
Process

36 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The Ministry of Finance shall provide an
Allocation Report along with an Impact Reportfor the investors (Figure 2), according to thefrequency defined below, for all of the bonds
issued under this Framework, being responsiblefor its consolidation. This information will be
published on the website of the Ministry in
Figure 2

April of each year, using the following link:
https://www.hacienda.cl/english/work-areas/international-finance/public-debt-office. The
published information will be subject to theavailability of the fiscal accounts. The first reportwill be published during the year following issue.

Reporting process

Project 1

Project 2

Project n

Ministry A

Ministry B

Ministry n

Allocation and Eligibility
Report Information

Impact Report
Information

Ministry of
Finance

MoE/SPD

Allocation andEligibility Report

Impact Report

External
Audit

Ministries collect information related to Sustainable
Projects: amounts allocated and impact onenvironment. That information is necessary to
produce the Allocation, Eligibility and Impact report

MoF and MoE/SPD consolidate information fromsustainable projects, assets and expenditures into an
Allocation, Eligibility and Impact report

External Auditor reviews the Allocation Report

Ministry of Finance(Final Report)

MoF produces and publishes final report toinvestors

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Allocation Report
The Ministry of Finance, through the Treasury
and the Budget Office (DIPRES), will provide
information about net proceeds allocation fromits Bonds until complete allocation of funds,
including:• A brief description of the projects andamounts disbursed• Percentage of revenues allocated per projector program• Percentage of revenues
financing and refinancing

allocatedfor• Remaining balance of unallocated revenue• Percentage of co-financing per project orprogramConfidentiality agreements or considerationsof competition that could limit the amount ofdetails that can be divulged may be applied,in response to which the information would bepresented in generic terms and/or aggregates.

Eligibility Report
Besides publishing the resource allocations
for the projects of the certified portfolio, theMinistry of Finance will report on the conformityof the projects with the eligibility criteria
described in the section of this document on Use

37of the Proceeds and according to the Taxonomy
described in the section on Use of the Proceedsof the present Framework.

Impact Report
As long as the green, social or sustainable bondremains in effect, and to the extent possible, anannual impact report will be provided. Regarding
the green or sustainable bond, the MoE will
be responsible for establishing contacts withthe appropriate ministries to include all of the
impact indicators in an impact report that will
be considered by the Ministry of Finance toinform investors. With respect to a social bond,the Ministry of Finance will be responsible forconsolidating the information about social
indicators. The Impact Report may include thefollowing, where there is available information:• The expected impact of projects and assets• Qualitative performance indicators and,
when feasible, measurements of quantitative
performance of the impact of the projects• The underlying suppositions and methodology
used to prepare the performance indicatorsand metrics that will be disseminated.
At least one indicator for each eligible category
will be reported. This indicator will be equal orsimilar to the examples provided in the following
tables.

38 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Table 3 Examples of Green Indicators and Metrics
Eligible Green
Category

Clean
Transport

Example of Indicator

Environmental Impact
Indicator

Number of km of new electric train lines created / maintained
Number of km of the new electric bus lines created /maintained»»Annual emissions ofgreenhouse gases (GHG)
reduced/avoided (tCO2e)

Number of km of the new electric bus lines created /maintained»»Tons of avoided MP2.5
articlesNumber of people who use new ecological public transport

EnergyEfficiency

Number of households/private buildings benefited with energy
efficiencies»»% of annual energy
savings

Number of private buildings benefited with energy efficiencies»»kWh of annual energy
savings.

Number of public lighting benefited with energy efficiency

Installed Capacity (MW)
Renewable
EnergyAnnual renewable energy generation (MWh)»»annual emissions of GHG
reduced/avoided (tCO2e)»»Annual GHG emissions
reduced /avoided(tCO2e)Number of people who benefited from training programs

NaturalResources,
Use of Land
and Protected
Marine Areas

Area of land or ocean conserved/recovered (km2)
Area (km2) of marine/forest reserves under active monitoring
Number of climate observation stations installed (for gradualand extreme changes)
Number of efficient pumps installed
Km of new wastewater piping installed

Water
Management»»Protected areas andreserves: CO2 captured(per year)»»% Reduction in water
consumption

Number of new reservoirs/defenses against flooding
constructed
Number of studies (research)
Gross annual quantity of wastewater treated, reused or
avoided, before and after the project (m3/a)
Annual volume of clean potable water in m3 supplied forhuman consumption

Green Buildings(Ecological
Buildings)

Number of buildings with green certification, which indicatesthe specific certification level attained»»% of annual energy
savings»»Annual GHG emissions
reduced/avoided(tCO2e)CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Table 4 Examples of Social Indicators
Eligible Social Category

Example of Indicator

Support for older adults or
persons with special needs
who belong to vulnerable
sectors• Number of older adults/persons

Support for low-income
families• Number of low-income persons benefited

Support for human rights
victims• Number of victims of human rights

Support for the community
through job creation• Number of jobs createdbenefitedviolations benefited

Access to basic housing• Number of homes (broken down according to

Access to education• Number of vulnerable students benefited,

Food security

whether built or improved)

broken down according to level of education• Number of beneficiaries broken down
according to level of education• Number of and/or value of medical supplies
Access to Essential
Health Services

and equipment financed• Number of new hospital beds
• Number of beneficiaries

Social programs designed
to prevent and/or alleviate
unemployment stemmingfrom the socioeconomiccrisis, even through thepotential effect of financingof the SMEs and microfinances• Number of beneficiaries• Loans to MSMEs (value and number of loans)

39

40

External certification
Chile reserves the right to request external
certification in the case of its Green Bonds. Thisapplication shall be analyzed case-by-case.

External auditing
The Ministry of Finance shall contract an
independent external auditor to provide
guarantees about the allocation report and its

MARCO DE BONO SOSTENIBLE DE CHILE 40

compliance with the Framework. This process
shall be undertaken annually until total allocationof proceeds.

Amendments to this Framework
The MoF reserves the right to modify thisframework according to international bestpractices or in accordance to Chile’s international
commitments.

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Contacts
Investors Relations Office
Ministry of Financeiro@hacienda.gov.cl

41

42 CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

The content of this document has been
prepared by the Ministry of Finance withthe collaboration of the Interamerican
Development Bank.
We thank the advise of HPL for the support in
the elaboration of the eligibility criteria andthe impact and results indicators.

CHILE’S SUSTAINABLE BOND FRAMEWORK - NOVEMBER 2020

Ministry of
Finance

Government of Chile

43