How should the minimum coverage for corporate loans from sectors other than Energy Generation be interpreted? The standard states that companies other than those in the fossil fuel sector are to have a minimum coverage of 67%. For example, in the corporate loan portfolio, 20% are companies from the power generation sector of which 10% are fossil fuel companies. In this case, the 67% is to be counted: a) with 100% including companies in the power generation and fossil fuel sectors b) with 90% excluding companies in the power generation sector that are not fossil fuel companies c) with 80% excluding all companies in the power generation and fossil fuel sectors. Please confirm which approach should be used.
Please see the draft Version 2 of the Near-Term Financial Sector SBT Guidance for proposed clarifications in Table 5.2. In it, the 67% minimum coverage requirement is calculated separately from the 100% requirement for electricity generation.
OK, thank you for your answer.
In this case, the 67% coverage for long-term corporate loans is calculated on the basis of: 100% including the fossil fuels sector, or 100% excluding the fossil fuels sector?
Ok, I understand. Only this refers to the latest version of the standard, and there is no such detailed explanation in the current standard.
Please confirm that in the current version of the standard, in corporate loans for long-term debt, 100% coverage should include Fossil fuels companies and other sectors (excluding power generation and CRE).