Second Party Opinion s pglobal.com/ ratings This product is not a credit rating Ju ly 7 , 2023 4 The framework includes an exclusionary list : the green bond proceeds will not be allocated to projects involving child labour, weapons, or human right violations. In addition, KHNP's eligibility criteria reference the EU Taxonomy technical screening and incorporate abovementioned quantitative thresholds. Incorporat ing clear eligibility criteria with reference to market -based taxonomies for all eligible project categories is a strong practice. Management of proceeds The Principles require disclosure of the i ssuer ’s management of proceeds from sustainable finance over the life of the funding. The alignment opinion focuses on how clear in the documentation is the issuer’s commitment to ensure that the funds raised will remain dedicated to eligible sustainability pro jects throughout the life of the sustainable finance funding. ✔ KHNP ’s Green Bond Framework is aligned with this component of the GBP. KHNP will establish a green bond register to track the proceeds and to ensure the aggregate of issuance proceeds allocated to eligible project s is recorded. The register will contain information on the bond (ISIN, pricing date, maturity date) and details of the eligible use of proceeds (brief description, amount of allocation made, estimated impact). Unallocated proceeds will be invested in short -term instruments such as money market instruments or money market deposit s, in accordance with KHNP's liquidity management policy. Short -term investment s will exclude any fossil- fuel related instruments. GBWB will r eview and replace projects that no longer meet the eligibility criteria or are involve d in material environmental, social, or governance controversies. Reporting The Principles make optional recommendations for stronger disclosure practices, which inform our disclosure opinion as aligned , strong, or advanced. We consider plans for updates on the sustainability performance of the issuer for general purpose funding, or the sustainability performance of the financed projects over the lifetime of any dedicated funding, including any commitments to post -issuance reporting. ✔ KHNP ’s Green Bond Framework is aligned with this component of the GBP. Disclosure score We consider KHNP ’s overall reporting practices to be strong . KHNP commits to publish ing a green bond report on an annual basis . The report will provide detail s on the allocation of proceeds and the environmental impacts of invested projects until the full allocation of the net proceeds. The report will be publicly available on the company website. Allocation reporting will include a list of projects with the net amount invested , a brief description of the financed projects, amount of unallocated proceeds , and the share of financing versus refinancing. Environmental impact reporting will include qualitative environmental impact analysis and quantitative performance indi cators , where data is available. KHNP intends to report both the expected and achieved e nvironmental impacts , as well as the underlying methodologies and assumption s. We view this as a strong market practice. The f ramework outlines some examples of i mpact indicators , such as renewable energy generation (in megawatt hour ) or capacity installed (in MW ), and annual greenhouse gas avoided ( in tons of CO2 equivalent per year ). In addition, KHNP commit s to having an independent third -party verification of its post -issuance allocation and impact reporting , adding transparency to the framework. Aligned No t aligned St r ong Ad vanced