SDF Sustainable Bond Framework - High Yield Bonds Issue 2025

Sustainability Strategies and Policies

Sarvodaya Development Finance PLC (SDF) is dedicated to advancing financial inclusion, promoting gender equality, and addressing key environmental challenges. Grounded in the principles of the Sarvodaya Shramadana Movement, SDF integrates sustainability into its core operations through transparent, accountable practices. By aligning its strategies with the United Nations Sustainable Development Goals (SDGs), SDF empowers communities, fosters inclusivity, and protects the environment. These efforts not only create meaningful social and economic impact but also pave the way for long-term, sustainable growth for future generations. Through its sustainable finance initiatives SDF aims to:

E Promote Renewable Energy: With Sri Lanka's energy sector targeting 70% renewable energy by 2030 SDF plans to support this goal by financing rooftop solar and other small scale renewable energy projects.

S U S T A I N A B L E

G R E E N

E Financing Clean Technology - Committed to providing direct financing to clean technology and sustainable infrastructure projects, fostering the development of resilient industries and stimulating innovation.

E Sustainable Water Management - Through the deployment of dividends to Sarvodaya-related entities, these societies are committed to enhancing sustainable water management and developing infrastructure for clean drinking water in rural areas.

E Enhance Access to Essential Services: More than 25% of rural households struggle to access affordable housing and essential services, a gap that SDF financing seeks to bridge.

SOCIAL

E Support Agricultural Development: By providing financial solutions for agricultural vehicles (Tractors and Harvesters), SDF supports farmers to improve efficiency, increase yields and enhance rural livelihoods.

E Women Empowerment - Develop specialized financial products and services tailored for women entrepreneurs, empowering them to start, grow, and sustain their businesses.

E Increasing Food Security - Provide financial support to the agricultural sector to enhance food security and nutrition in communities.

E Reduced Income Inequalities - Promote financial inclusion by providing services to people living below the poverty line, reducing income inequalities and fostering economic development.

This framework aligns with the ICMA Green Bond Principles (GBP), Social Bond Principles (SBP) and Sustainability Bond Guidelines (SBG), contributing to the United Nations Sustainable Development Goals (SDG). By implementing this framework, SDF channels financial resources to initiatives with measurable positive environmental and social impacts.

Environment, Social and Governance (ESG) Policy

At SDF, the commitment to sustainability is anchored in robust Environmental, Social, and Governance (ESG) measurement and reporting. As a leading development finance institution in Sri Lanka, prioritizing transparency, accountability, and sustainable development is essential across all operations. Effective ESG practices are critical for building trust with stakeholders and driving longterm value. The approach spans a broad spectrum of activities, including environmental conservation, social equity programs, and governance excellence. Rigorous frameworks and standards are employed to track progress, ensure compliance, and continuously improve practices. In alignment with global best practices, SDF integrates the Global Reporting Initiative (GRI) standards into its ESG reporting and compliance processes, further strengthening its commitment to transparency and sustainability.

To strengthen sustainability initiatives, a dedicated mechanism has been implemented for measuring ESG activities. This includes the adoption of the Experienz ESG platform, which enables the quantification, analysis, and management of ESG activities across Environmental, Social, and Governance dimensions.

1. Environmental

   The Environmental policies under SDF's ESG framework emphasize promoting sustainability and reducing environmental impact through:

   1. Sustainable Financing: SDF prioritizes funding projects that align with environmental sustainability, including renewable energy, and waste management.

   2. Financing for Sustainable Agriculture: SDF supports sustainable agriculture practices by providing financial solutions that help farmers adopt eco-friendly techniques, modern equipment, and resource-efficient methods to enhance productivity while preserving the environment.

   3. Partnerships and Initiatives: Through collaborations with stakeholders, SDF invests in projects and innovations aimed at reducing carbon footprints and promoting environmental sustainability.

   4. Green Practices: SDF incorporates environmentally responsible operations within its branches and offices, focusing on reducing energy consumption, minimizing waste, and optimizing resource use. SDF has taken steps towards investing in renewable energy by commissioning rooftop solar panels at the Company's Head Office building.

   5. Monitoring Carbon Emissions: Carbon emission is captured through fuel usage and currently, SDF measures the Greenhouse gas emission scope 1 and 2. "Experienz" platform quantifies energy management of SDF through the consumption of electricity from the main Electricity Grid and solar power.

2. Social

   Sarvodaya Development Finance PLC (SDF) integrates comprehensive social policies within its Environmental, Social, and Governance (ESG) framework to foster inclusive growth and socio-economic development. Key aspects include:

   1. Community Empowerment: Guided by the principles of the Sarvodaya Shramadana Movement, SDF focuses on uplifting rural communities by providing financial services that enable self-sufficiency and economic development.

   2. Women Empowerment: SDF prioritizes empowering women by providing access to financial resources, supporting women-led businesses, and encouraging innovation. These efforts help women contribute meaningfully to their communities while fostering gender equality.

   3. Financial Inclusion: SDF is dedicated to extending financial access to underserved populations, particularly in rural areas, ensuring marginalized groups can participate in economic activities.

   4. Support for Micro, Small, and Medium Enterprises (MSMEs): Recognizing the role of MSMEs in economic growth, SDF offers specialized financial products to support their development, sustainability, and job creation.

   5. Employee Welfare and Development: SDF promotes the well-being of its employees by providing training, professional development opportunities, and a supportive work environment that nurtures talent and innovation.

   6. Corporate Social Responsibility (CSR) Initiatives: SDF engages in CSR activities that address social challenges, contribute to community development, and enhance social well-being.

   
   
   

3. Governance

   The governance structure of SDF is built on well described roles and responsibilities, greater transparency & accountability and the establishment of clear reporting lines of the Board and Board's various Subcommittees. Key elements include:

   1. Transparent Governance Framework: SDF operates under a well-defined governance structure, promoting clarity in decision-making processes and fostering trust among stakeholders.

   2. Ethical Standards and Compliance: SDF adheres to the highest ethical standards and ensures strict compliance with all applicable laws, regulations, and industry best practices to maintain operational integrity.

   3. Board Oversight and Independence: The Board of Directors at SDF comprises experienced and independent members who provide strategic oversight and ensure that governance practices align with the company's vision and ESG objectives.

   4. Risk Management and Internal Controls: SDF employs comprehensive risk management systems and robust internal controls to identify, mitigate, and manage potential risks, safeguarding its operations and stakeholders.

   5. Stakeholder Engagement: SDF prioritizes open communication with stakeholders, ensuring their concerns and feedback are integrated into decision-making processes, further enhancing transparency and accountability.

   6. Data Privacy and Security: Recognizing the importance of data protection, SDF enforces stringent policies to safeguard customer information and ensure confidentiality in all transactions.

   7. Sustainability Reporting: Governance policies are supported by rigorous ESG measurement and reporting systems, including the adoption of platforms like the Experienz ESG platform, ensuring that governance performance is tracked, analysed, and continually improved.

   8. Whistleblower Mechanisms: SDF provides secure and confidential channels for employees and stakeholders to report unethical behaviour, fraud, or misconduct, fostering a culture of accountability.

   
   
   

Governance Structure

Sarvodaya has established a Management-Level Committee responsible for overseeing the company's sustainable strategy, environmental practices, and ESG risk management. This committee operates in alignment with SDF's Sustainable Development Policy, ensuring the company's long-term success and viability. Members within the governance structure have been selected based on their expertise, experience, and ability to uphold the highest standards of governance, strategic oversight, and sustainability leadership. Their appointments reflect a rigorous selection process that emphasizes independence, diversity, and alignment with Sarvodaya's core values and sustainable development priorities. Many members also bring specialized knowledge in ESG, risk management, and corporate strategy, ensuring the committee is well-equipped to guide the organization in line with international best practices and regulatory expectations. Across the governance structure, the overall gender composition is approximately 68% male and 32% female, reflecting ongoing efforts to promote gender diversity and inclusion.

Board of Directors

7 Members

4 Non Executive/Independent Directors

3 Non Executive/Non Independent Directors

Board Integrated Risk Management Committee

4 Members

3 Non Executive/Independent Directors

1 Non Executive/Non Independent Directors

Management Sustainability Committee

10 Members

CEO/Chairman to the Committee HOSP - Secretary to the Committee Executive - Sustainability

Five Management Committee Members

Strategic Planning & Sustainability Department

4 Members

Head of Strategic planning Executive-Sustainability

Two Executive Strategic Supporting Staff

71%

75%

80%

33%

29%

25%

20%

67%

Environmental and Social Management System (ESMS)

The proceeds from sustainable bonds issued under this framework will exclusively fund projects that meet the eligibility criteria outlined below. These projects will be evaluated to ensurealignment with the GBP, SBP, and SBG of ICMA. Under the given eligibility criteria, the company will provide financing for new funding requirements and will not include refinancing.

Below is the fund allocation for the green and the social financing.

With over 60 years of experience in social development activities, the company plans to allocate 75% of the funds towards socially impactful financing and 25% towards climate impact financing.The company has already financed such initiatives as outlined below, and the new funds will further strengthen its ongoing contribution to social and climate-related financing.

1. Green Eligible Categories

   GBP Category

   Alignment to SDF's sustainability Targeted Projects

   strategies

   Expected environmental benefits, associated risks &

   mitigation strategies

   Performance Indicators

   SDG Alignment

   Renewable Energy Supports our mission of uplifting

   rural communities through access to sustainable energy and reducing environmental footprint.

   E Financing for the development and implementation of rooftop solar electricity generation facilities including dedicated transmission and supporting infrastructure.

   E Facilitating access to financing for solar equipment vendors.

   Benefits

   Contributes to national electricity generation by replacing fossil fuels, thereby reducing reliance on coal and significantly lowering air and water pollution.

   Risks

   Potential changes in government policies and regulations regarding the purchase of electricity for the national grid, due to the lack of power storage capacity.

   Mitigation Strategies

   Engage proactively with regulatory authorities to stay informed about potential policy changes and contribute to policy discussions. Invest in or partner

   with power storage solution providers to pilot scalable storage technologies.

   E Number of kWh generated from solar panels

   E Equivalent amount of fossil fuel replaced

   SDG 7:

   Affordable and Clean Energy

   
   
   

   SDG 12:

   Responsible Consumption and Production

   
   
   

   SDG 13:

   Climate Action

   
   
   

   GBP Category

   Alignment to SDF's sustainability Targeted Projects

   strategies

   Expected environmental benefits, associated risks &

   mitigation strategies

   Performance Indicators

   SDG Alignment

   Clean Transportation

   Aligns with our commitment to low-carbon development, the green mobility initiatives and our strategic goal of achieving carbon neutrality by 2030.

   E Providing loan and affordable leasing facilities to support the purchase of electric vehicles.

   E Financing low-carbon public transportation infrastructure projects, such as electric vehicle (EV) charging centres.

   Benefits

   Promotes reduced fossil fuel consumption by encouraging electric vehicle use and supporting compatible solar-powered charging infrastructure, thus mitigating air pollution.

   Risks

   Inadequate national EV infrastructure and evolving regulatory frameworks could impact project viability and slow adoption rates.

   Mitigation Strategies

   Collaborate with government agencies and private sector stakeholders to support the development of EV infrastructure.

   E Number of Electric Vehicles

   E Equivalent amount of fossil fuel replaced

   SDG 11:

   Sustainable Cities and Communities

   
   
   

   SDG 12:

   Responsible Consumption & Production

   
   
   

   SDG 13:

   Climate Action

   
   
   

   Estimated allocation: The proceeds for these projects will be allocated from the estimated Green Eligible Financing portion of the bond, which accounts for 25% of the total proceeds as specified above. Each GBP Category will receive a minimum allocation of 30% from the Green Eligible Financing portion. Fund utilization will be integrated into SDF's annual report, ensuring transparent and comprehensive updates are made publicly available.

2. Social Eligible Categories

   SBP Category

   Alignment to SDF's

   sustainability strategies

   Targeted Projects

   Excepted Social Benefits & Risks Associated

   Performance Indicators

   SDG Alignment

   Affordable Housing

   Supports our strategy to enhance financial inclusion and improve living conditions for underserved communities by providing access to basic housing finance.

   Loans to underserved communities for affordable housing projects such as:

   E Purchase an existing house

   E Construct a house

   E Purchase a bare land to construct a house for residential purposes

   E Complete construction of a partially-built house

   E Renovate or modify an already constructed house

   Benefits

   The company provides financing to un-bankable customers who lack sufficient documentation for traditional bank borrowing-such as daily wage workers, farmers, and village-based small

   entrepreneurs. Through this support, SDF aims expand to provide access to better housing and uplift their standard of living.

   Risks

   Possibility of delays or legal complications due to unclear land titles or changes in housing-related policies or regulations.

   Mitigation Strategies

   Conduct thorough due diligence on land titles and legal documentation prior to project initiation. Work closely with legal experts and local authorities to resolve ambiguities early.

   E Number of individuals/ families benefiting from subsidised housing

   SDG 1:

   No Poverty

   
   
   

   SDG 11: Sustainable Cities and Communities

   
   
   

   SBP Category

   Alignment to SDF's

   sustainability strategies

   Targeted Projects

   Excepted Social Benefits & Risks Associated

   Performance Indicators

   SDG Alignment

   Employment Generation

   Aligns with our focus on sustainable economic development through the empowerment of MSMEs and community-based entrepreneurship.

   E Providing SME financing solutions specifically designed to support business startups and enhance the capacity of existing small and medium enterprises owned by

   or serving underserved and marginalized groups, including youth, persons with disabilities, and low-income communities.

   Benefits

   The company provides financing to SMEs primarily to support business growth and startups, especially those without access to formal financial services.

   Many of these businesses rely on informal borrowing methods at unreasonably high interest rates. SDF aims to generate more employment by financing the SME sector and ensuring their continuity by offering funds at reasonable rates.

   Risks

   Funds may not always be used for intended business purposes, reducing the impact of the financing and increasing credit risk.

   Mitigation Strategies

   Implement strict loan monitoring mechanisms, including periodic site visits, usage audits, and milestone-based disbursements. Include clear covenants in loan agreements that define permitted uses of funds.

   E Number of loans to SMEs and/or micro-enterprises

   E Number employment opportunities created

   SDG 8:

   Decent Work and Economic Growth

   
   
   

   SBP Category

   Alignment to SDF's

   sustainability strategies

   Targeted Projects

   Excepted Social Benefits & Risks Associated

   Performance Indicators

   SDG Alignment

   Women Empowerment

   Aligns with our commitment to gender equality and inclusive economic participation by increasing access to finance for women in underserved rural communities.

   E Financial services specialized for women entrepreneurs and women-led enterprises.

   Benefits

   The company has a 48% female customer base, primarily from rural communities, especially through Sarvodaya Shramadana Societies. The company focuses on providing access to finance for women, particularly to support their small and medium enterprises and business startups. Through these efforts, the company aims to contribute to gender equality.

   Risks

   Gender-based societal norms and constraints in certain rural areas may hinder women's full

   participation in economic activities, reducing the potential impact of financial support

   Mitigation Strategies

   Design and implement gender-sensitive financial products and capacity-building programs that address specific barriers faced by women. Partner with local community leaders and organizations to promote awareness and support for women's economic participation.

   E Number of women entrepreneurs benefited

   E Number women employment created

   SDG 1:

   No Poverty

   
   
   

   SDG 5:

   Gender Equality

   
   
   

   SDG 10:

   Reduced Inequalities

   
   
   

   SBP Category

   Alignment to SDF's

   sustainability strategies

   Targeted Projects

   Excepted Social Benefits & Risks Associated

   Performance Indicators

   SDG Alignment

   Food Security Improve the productivity

   and efficiency of farming communities by enhancing agricultural practices through the provision of high-tech equipment, modern machinery, and quality agricultural inputs, delivered through strategic partnerships. This initiative is expected to ensure food security and increase farmers' income levels.

   E Provide loan facilities and affordable leasing options for agricultural equipment and machinery to support farmers.

   Benefits

   Enhancing farming productivity and efficiency through high-tech equipment and quality inputs leads to increased crop yields, improved income for farming communities, and sustainable agricultural development.

   Risks

   The adoption of advanced technology may face challenges such as high initial costs, lack of technical knowledge among farmers, and dependency on external input suppliers.

   Mitigation Strategies

   Establish training and awareness programs to build farmers' capacity in using new technologies;

   implement pilot projects to demonstrate impact; and form partnerships with trusted input providers to ensure quality, affordability, and after-sales support.

   E Number of Farmers benefited.

   E Number of hectares cultivated.

   SDG 1:

   No Poverty

   
   
   

   SDG 2:

   Zero Hunger

   
   
   

   SDG 12:

   Responsible Consumption & Production

   
   
   

   SBP Category

   Alignment to SDF's

   sustainability strategies

   Targeted Projects

   Excepted Social Benefits & Risks Associated

   Performance Indicators

   SDG Alignment

   Socioeconomic Advancement

   Supports our mission to uplift low-income communities through the expansion

   of development-oriented microfinance programs of Sarvodaya Development Finance PLC.

   E Provide Microfinance loans for village and home-based small businesses and income generative cultivation activities such as tea and cinnamon planting and any other commercial crops for low-income communities.

   Benefits

   The company provides financing to micro businesses, primarily those at the poverty level, especially in the agriculture sector and among rural customers. SDF aims to strengthen financing for this segment, provide access to formal financial services, and support income generation to help them rise out of poverty.

   Risks

   Difficulty in tracking the actual use of funds and quantifying long-term socioeconomic benefits, especially in informal and geographically dispersed communities.

   Mitigation Strategies

   Develop simplified, community-based monitoring and reporting mechanisms that leverage local networks and digital tools to track fund utilization

   E Number of customers benefited who are under the poverty level.

   E How much production is generated (Value to GDP)

   SDG 1:

   No Poverty

   
   
   

   SDG 8:

   Decent Work and Economic Growth

   
   
   

   SDG 10:

   Reduced Inequalities

   
   
   

   Estimated allocation: The proceeds for these projects will be allocated from the estimated Social Eligible Financing portion of the bond, which accounts for 75% of the total proceeds as specified above. Each SBP Category will receive a minimum allocation of 10% from the Social Eligible Financing portion. Fund utilization will be integrated into SDF's annual report, ensuring transparent and comprehensive updates are made publicly available.

Portfolio Evaluation and Selection

SDF has established a dedicated Strategic Planning & Sustainability Department (herein referred to as "SPSD") as the primary body responsible for the selection and evaluation of eligible portfolios under the Sustainable Bond Framework. This department comprises four members-the Head of Strategic Planning, the Executive - Sustainability, and two Executive Strategic Supporting Staff-ensuring focused, expert-driven assessments. The department reports directly to the Management Sustainability Committee, which includes 10 senior members, such as the CEO (Chairman), HOSP (Secretary), the Executive - Sustainability, and five Management Committee members. This two-tiered governance structure ensures a robust, accountable selection process by integrating strategic oversight with technical and operational expertise. In addition, the committee is responsible for assessing whether proposed activities are in compliance with the Sri Lanka Green Finance Taxonomy (May 2022).

During the quantitative and qualitative assessment, the Strategic Planning & Sustainability Team will evaluate each project proposal based on a set of specific indicators relevant to the respective Green or Social category. These indicators are designed to measure both environmental impact and social benefit, ensuring alignment with the Sustainable Bond Framework.

For Green Projects, indicators may include:

E Estimated kilowatt-hours (kWh) of solar energy generated

E Reduction in fossil fuel consumption (e.g., litres/year or emissions offset)

E CO2emissions avoided (measured in metric tons/year)

For Social Projects, indicators may include:

E Income level of the applicant or target beneficiary group

E Number of direct and indirect jobs created

E Number of farming acres supported or cultivated

E Number of women employed or trained through the initiative

E Whether the founder or business owner is a woman

E Number of youth or marginalized individuals engaged

E Support to first-time entrepreneurs or micro-enterprises

E Improvement in household income or livelihood resilience of beneficiaries

1. Key Evaluation Steps

   The project assessment process at Sarvodaya begins when a customer submits a loan application at a branch. Using the information provided, branch-level officers perform an initial review to evaluate whether the proposed project aligns with Sarvodaya's sustainability objectives. Sustainability Committee will provide guidelines to identify the eligible products. If deemed potentially eligible, the application is escalated to the SPSD, which takes responsibility for the thorough evaluation and selection process. This includes reviewing the proposal against the eligibility criteria specified in the Sustainable Bond Framework, Sarvodaya's overarching sustainability priorities, and any other relevant guidelines. As part of this process, the department conducts detailed technical and financial feasibility analyses to ensure that projects are both viable and impactful. In addition, the committee is responsible for assessing whether proposed activities are in compliance with the Sri Lanka Green Finance Taxonomy (May 2022).

   Once the due diligence process is completed, the proposal is submitted for final credit approval. Depending on the loan amount, approval authority rests with either the Senior Manager - Credit or, for larger exposures, with the Head of Credit, as per the Board-approved credit policy. Oversight of the proper allocation and tracking of bond proceeds is maintained by the SPSD, which ensures full compliance with the Sustainable Bond Framework and promotes transparency throughout the process.

Management of Proceeds

Proceeds from the sustainable bonds will be managed on an aggregate basis through a dedicated account. SDF is committed to promptly deploying the proceeds from its sustainable bonds, with full allocation expected within one year of issuance. To ensure adherence to the Sustainable Bond Framework, an independent third-party auditor will conduct an annual external review in accordance with applicable rules and regulations. Unallocated proceeds will be temporarily invested in cash, cash equivalents, or Sri Lanka Government Securities.

Reporting

SDF is committed to transparency and accountability in reporting the allocation of proceeds and the impact of funded portfolios. Reporting will include:

Allocation Reporting:

Annual report to verify that the proceeds received have been allocated to the Eligible Project Categories which would also be published on the listed exchange.

E Total proceeds allocated

E Breakdown by portfolio category

E Geographic distribution of portfolios

Impact Reporting:

This report will be shared exclusively with the investors of the bond, while the annual report will track and highlight the impact generated by the proceeds of the bond, demonstrating how the funds have contributed to the intended goals and outcomes.

E Metrics such as CO2emissions avoided, number of affordable housing units financed, or SMEs supported.

E Qualitative case studies showcasing portfolio benefits.

The Treasury and the Sustainability Unit will prepare and submit allocation and impact reports to the Sustainable Bond Committee and the Board on a periodic basis. Any changes to the overall portfolio considered under the Sustainable Bond, or the removal and addition of individual portfolios from the Sustainable Bond portfolio, will require clearance from the Sustainability Unit. SDF will publicly disclose the allocation of proceeds and impacts of the Sustainable Bonds in its Annual Report on an aggregate portfolio basis without detailing individual portfolios funded. The Annual Report will be published on the SDF website and other relevant platforms as applicable.

SDF will maintain and make readily available up-to-date information on the use of proceeds, reviewed annually, and updated in a timely manner in case of material developments.

SDF is committed to transparency and accountability in reporting the allocation of proceeds and the impact of funded portfolios. Reporting will include:

E The Harmonized Framework for Impact Reporting is designed to ensure the impact data is reported consistently, transparently, and comparably across different organizations, industries and investment types, particularly in the context of Sustainable Bonds. This framework helps issuers clearly communicate the positive environment and social outcomes achieved through the bond's proceeds.

1. Impact Reporting Framework

   1. Alignment with Impact Objectives

      E SDF commits to aligning the use of proceeds with clearly defined sustainability goals, including but not limited to the UN Sustainable Development Goals (SDGs) or specific environmental and social objectives.

      E Impact reporting will reflect how proceeds are contributing to this identified goal, with a focus on both environmental and social outcomes.

   2. Standardized Reporting Indicators

      E Impact reporting will utilize standardized, globally recognized metrics to ensure comparability and transparency. These may include quantitative indicators such as CO2reductions, renewable energy capacity, energy savings or the number of people benefiting from funded projects, as well as qualitative indicators that highlight the broader social and environmental impacts.

      E SDF will utilize the Harmonized Framework for Impact Reporting to ensure that metrics align with industry best practices and are consistent with leading sustainability standards.

   3. Impact Metrics Categories

      E Environmental Impact: Metrics will focus on improvements in environmental sustainability, such as reductions in greenhouse gas emissions, the installation of renewable energy capacity, or conservation efforts that promote biodiversity and natural resource preservation.

      E Social Impact: The framework will track social outcomes such as access to education, affordable healthcare, employment opportunities, or infrastructure development that directly benefits underserved communities.

   4. Data Transparency

      E The issuer will provide transparency regarding the methodologies and assumptions used to calculate impact. This will include clear disclosure of data sources and calculation models to ensure consistency and accuracy in reporting.

      E The impact data will be made publicly available in a clear and understandable format.

   5. Timeframe for Reporting

      E Impact will be reported on an annual basis, with the first report due one year after the issuance of the bond. Reporting will cover both short-term impacts (within the first 1-2 years) and long-term projected impacts, to provide a comprehensive view of outcomes.

   6. Verification and Assurance

      E SDF will obtain external verification, or third-party assurance of the impact reporting, ensuring that the data provided is accurate and reliable. This will be done by an independent organization with expertise in impact measurement and sustainable finance.

      E The verification will cover both financial and impact reporting.

   7. Use of Proceeds Tracking

      E Clear reporting on the allocation of proceeds will be provided, showing how the funds are distributed across various projects. This will include detailed descriptions of each funded project, its objectives, expected outcomes, and the geographical location where these funds are utilized.

      E The issuer will ensure that all proceeds are used to intended sustainable related projects/products as described in the bond's offering document.

   8. Expected vs Actual Impact

      E SDF will report on the actual impact achieved versus the initially projected impact. This comparison will help investors understand the effectiveness of the investment and provide accountability for any discrepancies between expected and realized outcomes.

   9. Stakeholder Engagement

   E SDF will engage with relevant stakeholders (Including affected communities, local authorities, and impact investors) to ensure that the impact reporting is relevant and reflective of the actual outcome.

   E This will help ensure that the reported impacts address most critical needs and concerns of the stakeholders involved, strengthening the bond's credibility and fostering long term sustainable development.

External Review