Hafslund Eco Hydropower Portfolio

Hafslund's Green Finance Framework Second Party Opinion – Dark Green Rating • • • • Aligned with ICMA Green Bond Principles and LMA/LSTA/APLMA Green Loan Principles Defines assets and projects that can be financed with Green Bonds and Green Loans Use of proceeds exclusively for low-carbon solutions and climate change adaption. All projects take into account environmental concerns, social impacts, landowner and potential local resistance. Green Finance Framework March 2021 °C • Green Finance Committee includes member(s) with sustainability expertise. • Green Finance Report will be published annually as long as there are Green Finance Instruments outstanding or until full allocation. °C °CICERO Dark Green Fair Good °C Excelle Hafslund Eco "CICERO Shades of Green Hafslund Eco AS Green Finance Second Opinion March 10th, 2021 Hafslund Eco AS ("Hafslund Eco") is a renewable energy group that is wholly owned by the City of Oslo, Norway. Hafslund Eco is Norway's second largest power producer with business areas power generation and electrification solutions, in addition to a 50% ownership of Eidsiva Energi. Hafslund Eco is operating annual production of more than 21 TWh, and owns hydroelectric power plants which together produce more than 17 TWh. The power plants are located in Oslo and the counties of Viken, Innlandet, Vestland Agder. The eligible green project categories Hafslund Eco's green finance framework are Renewable energy, Climate change adaptation and Clean transportation. Expected shares of proceeds going to the different categories are approximately 70% for renewable energy projects, 30% to climate adaptation projects (mostly dams) and minor share to clean transportation (charging stations). Net proceeds from green finance instruments can be used for the financing of new assets and projects, as well as for refinancing purposes. Initially, new assets and projects will receive the majority of net proceeds and are defined as green projects taken into operation less than 12 months prior to the issuance of a green finance instrument. Thus, a fair share of net proceeds will go to new hydro power plants. Investments linked to fossil energy generation are excluded. asset swap Hafslund Eco acquired Eidsiva Vannkraft as part of transaction in late 2019. The establishment of quantitative environmental goals is therefore still at a planning stage. When finalised, the expectation is that they will cover more than 'in-house' emissions and be quite ambitious. The selection process and criteria for eligible projects are both well defined, as is the management of proceeds. Screening for controversial projects is always carried out and climate resilience issues are also considered. At this stage, there remain some uncertainties with respect to the methodology (grid factor) chosen for reporting reductions in greenhouse gas emissions. Hafslund Eco's green finance framework is likely aligned with the technical mitigation criteria and minimum social safeguards in the proposed EU taxonomy. Some of the Do-No-Significant- Harm criteria relevant to this framework may be only partly aligned (such quantitative recycling criteria). the Based on the overall assessment of the eligible green assets and governance and transparency considerations, Hafslund Eco's green finance framework receives a CICERO Dark Green shading and a governance score of Good. To improve the framework, Hafslund Eco could conduct life cycle assessments of major projects and instil stricter environmental criteria for their suppliers. Better climate reporting, qualitative climate targets and a clear roadmap towards those targets would strengthen the goverance structure supporting the framework. SHADES OF GREEN Based on our review, we rate the Hafslund Eco's green finance framework CICERO Dark Green. Included in the overall shading is an assessment of the governance structure of the green finance framework. CICERO Shades of Green finds the governance procedures in Hafslund Eco's framework to be Good. GREEN BOND and GREEN LOAN PRINCIPLES Based on this review, this Framework is found in alignment with the principles. CICERO °C Dark Green 'Second Opinion' on Hafslund Eco's Green Finance Framework 32 32

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