Empresa Nacional de Telecomunicaciones S.A.

Type of Engagement: Annual Review

Date: April 01, 2022
Engagement Team:
John-Paul Iamonaco, john-paul.iamonaco@sustainalytics.com, (+1) 416 861 0403
Hamoda Youssef, hamoda.youssef@sustainalytics.com

Introduction
In 2021, Empresa Nacional de Telecomunicaciones S.A. (Entel) issued sustainability bonds aimed at financing
and/or refinancing, in whole or in part, existing and/or future projects that reduce the carbon footprint of its
operations and increase connectivity for underserved groups guided by Entel’s Sustainable Financing
Framework (the “Framework”).1 Sustainalytics provided a Second-Party Opinion on this Framework in
September 2021.2 In 2022, Entel engaged Sustainalytics to review the projects funded through the issued
2021 sustainability bonds and provide an assessment as to whether the projects met the Use of Proceeds
criteria and the Reporting commitments outlined in the Framework.

Evaluation Criteria
Sustainalytics evaluated the projects and assets funded with proceeds from the 2021 sustainability based on
whether the projects and programmes:
1. Met the Use of Proceeds and Eligibility Criteria outlined in the Entel Sustainable Financing
Framework; and
2. Reported on at least one of the Key Performance Indicators (KPIs) for each Use of Proceeds criteria
outlined in the Entel Sustainable Financing Framework.
Table 1 lists the Use of Proceeds, Eligibility Criteria, and associated KPIs while Table 2 lists the associated
KPIs.

Table 1: Use of Proceeds, Eligibility Criteria, and associated KPIs

Use of Eligibility Criteria KPIs

Proceeds
Affordable Expenditures related to funding the construction, - Number/share of wireless
Basic improvement, acquisition, or maintenance and connections by type of technology
Infrastructure operation of facilities, networks, and equipment
- Network quality surveys/indexes
needed to expand basic technological resources,
including wired and wireless internet access. - Number of homes passed (i.e.,
installed capacity) and/or homes
Projects may include, but are not limited to:
actually connected with wired
- Investments in 5G Network Deployment services
- Investments in 4G Network Expansion - Number/names of locations that
were provided additional network
- Investments in Fiber Optic expansion
capacity
- Operation of rural network sites
Access to Expenditures related to funding the construction, - Number of homes with fixed
Essential improvement, acquisition, or maintenance and wireless broadband service
Services operation of facilities and equipment needed to
- Growth of antennae/network
provide fixed wireless broadband service in
infrastructure for fixed wireless
broadband

1 Entel Sustainable Financing Framework is available on Empresa Nacional de Telecomunicaciones S.A. ’s website at:
https://entel.modyocdn.com/uploads/cc21cbb3-2c4d-4783-8edd-4a4dcc6b4f58/original/Entel_Sustainable_Financing_Framework.pdf
2 Entel Sustainable Financing Framework Second-Party Opinion (2021), at: https://www.sustainalytics.com/corporate-solutions/sustainable-finance-and-

lending/published-projects/project/empresa-nacional-de-telecomunicaciones-s.a/entel-sustainable-financing-framework-second-party-opinion-
(2021)/entel-sustainable-financing-framework-second-party-opinion-(2021)

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areas without availability of wired services

(known as “red zones”)

COVID-19 Expenditures related to funding programs or - Number of beneficiaries of

Pandemic initiatives that: connectivity donations (devices
relief and/or plans)
- Provide supplementary health and safety
measures for employees and customers,
including PPE and separators for face-to-face
operations.
- Provide connectivity (including donation of
devices and/or data plans) to vulnerable
groups such as senior citizens or patients in
hospitals.
Renewable Expenditures related to the construction, - Renewable energy as % of total
Energy development, expansion, production, acquisition, annual energy consumption
maintenance, operation installation and/or
- Annual GHG emissions
sourcing of renewable energy to power our
reduced/avoided in tonnes of CO2
network, data centers and associated
equivalent (tCO2e)
infrastructure.
- Renewable energy sources such as wind,
solar and small scale (<25 MW) hydro energy
generation operating at life cycle emissions
lower than 100gCO2e/kWh
- Sourcing expenditures pursuant to long-term
(≥ 5 years) power purchase agreements
(PPAs), including those entered into prior to
the issuance of our Sustainable Bonds as well
as later extensions.
Energy Expenditures related to projects that could result - Data centers weighted average PUE
Efficiency in increased energy efficiency, using best efforts (Power Use Effectiveness)
basis to ensure all projects achieve at least a
- Annual energy savings in GWh
30% energy efficiency improvement. Eligible
(electricity) and GJ (other energy
Projects might include:
savings)
- Financing of electric powered machinery or
- Reduction in absolute/relative
incorporation of energy saving technologies,
energy usage (in %)
including LED lighting technology
- Annual GHG emissions
- Investments for optimization of energy
reduced/avoided in tonnes of CO2
consumption and reducing energy loss, such
equivalent
as energy management systems for POPs
- Investments in energy consumption
measurement and control systems, including
industrial thermometers
Clean - Expenditures related to the modernization in - Annual GHG emissions
Transportation transport systems, including transportation reduced/avoided in tCO2e p.a.
with zero direct emissions (e.g., electric,
- Annual Absolute (gross) GHG
hydrogen)
emissions in tCO2e
Investments related to the purchase of electric
- Number of clean vehicles deployed
vehicles and/ or for infrastructure projects
(e.g., electric)
associated with electric vehicles, including
charging stations
Green Expenditures related to the acquisition, financing, - LEED, BREEAM, HQE or equivalent
Buildings construction or retrofitting (20% or more environmental certification scores
emissions/energy performance improvements
over baseline such as ASHRAE 90.1 2010 or

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equivalent) of buildings in line with Green - Annual energy savings in MWh

Building Standards (planning and design, energy (electricity) and GJ (other energy
efficiency, green roofs, water efficiency and savings)
conservation, material conservation and
- Annual GHG emissions
resource efficiency, environmental quality;
reduced/avoided in tonnes of CO2
eligible standards outlined below)
equivalent vs local
Investments for Certification Systems (LEED baseline/baseline certification
Gold certified or higher, BREEAM Excellent or level; and/or % of carbon emissions
higher, HQE Excellent or higher) reduced/avoided vs local
baseline/baseline certification level
Pollution Expenditures aimed at: - Waste that is prevented, minimized,
Prevention & reused or recycled before and after
Waste prevention, waste reduction, segregation
Control the project in % of total waste
of waste and waste recycling, including recycling
and/or in absolute amount in
of electronic devices and network equipment,
tonnes p.a.
implemented under a robust Waste Management
process and with certified third parties to ensure - Annual absolute (gross) amount of
proper handling and mitigate risks waste that is separated and/or
collected, and treated (including
composted) or disposed of (in
tonnes p.a. and in % of total waste)

Issuing Entity’s Responsibility

Entel is responsible for providing accurate information and documentation relating to the details of the
projects that have been funded, including description of projects, amounts allocated, and project impact.

Independence and Quality Control

Sustainalytics, a leading provider of ESG and corporate governance research and ratings to investors,
conducted the verification of Entel’s Sustainability Bond Use of Proceeds. The work undertaken as part of this
engagement included collection of documentation from Entel employees and review of documentation to
confirm the conformance with the Entel Sustainable Financing Framework.
Sustainalytics has relied on the information and the facts presented by Entel with respect to the Nominated
Projects. Sustainalytics is not responsible, nor shall it be held liable if any of the opinions, findings, or
conclusions it has set forth herein are not correct due to incorrect or incomplete data provided by Entel.
Sustainalytics made all efforts to ensure the highest quality and rigor during its assessment process and
enlisted its Sustainability Bonds Review Committee to provide oversight over the assessment of the review.

Conclusion
Based on the limited assurance procedures conducted, 3 nothing has come to Sustainalytics’ attention that
causes us to believe that, in all material respects, the reviewed bond projects, funded through proceeds of
Entel’s Sustainability Bond, are not in conformance with the Use of Proceeds and Reporting Criteria outlined
in the Entel Sustainable Financing Framework. In this Annual Review, expenditures have been under three
categories: Affordable Basic Infrastructure, Access to Essential Services, and Renewable Energy. Entel has
disclosed to Sustainalytics that 52.7% of the proceeds of the sustainability bond were allocated as of
December 31, 2021, with 100% of the allocated amount were used to refinance eligible projects.

3Sustainalytics limited assurance process includes reviewing the documentation relating to the details of the projects that have been funded, including
description of projects, estimated and realized costs of projects, and project impact, which were provided by the Issuer. The Issuer is responsible for
providing accurate information. Sustainalytics has not conducted on-site visits to projects.

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Detailed Findings
Table 3: Detailed Findings
Eligibility Procedure Performed Factual Findings Error or
Criteria Exceptions
Identified
Use of Verification of the projects funded by the All projects reviewed None
Proceeds sustainability bond in 2021 to determine if complied with the Use
Criteria projects aligned with the Use of Proceeds of Proceeds criteria.
Criteria outlined in the Entel Sustainable
Financing Framework and above in Table 1.
Reporting Verification of the projects funded by the All projects reviewed None
Criteria sustainability bond in 2021 to determine if reported on at least one
impact of projects was reported in line with KPI per Use of Proceeds
the KPIs outlined in the Entel Sustainable criteria.
Financing Framework and above in Table 1.
For a list of KPIs reported please refer to
Appendix 1.

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Appendix

Appendix 1: Impact Reporting by Eligibility Criteria as of 31st of December 2021

Use of Project Country Environmental Impact Reported by Eligibility Net Bond

Proceeds Criteria Proceeds
Category Allocation
(USD
millions)
Affordable 5G Network Initial Chile 169 5G stations installed in eligible 106.5
Basic Deployment4 communities, representing 43% of total
Infrastructure deployment.
4G Network Chile Through 2020 and 2021, 423 4G stations were 112.82
expansion5 installed in eligible communities. As a result,
Data usage doubled and users grew by 25% in
these communities.
Residential Fiber Chile The number of households with Fiber Optic 71.14
Optic Expansion service in eligible communities grew from by
467% from 3,955 in 2019 to 18,474 in 2021.
Homes with technical feasibility of service
(Home Pass) increased by 470%, reaching
133,565 homes among the target population.
Operation of rural Chile Operating more than 2,500 antennas in remote 27.6
network sites6 and rural locations.
Operation of rural Perú Between 2019 and 2021, 730 antennas were 25.9
network sites deployed to serve 7000 rural communities.
5G and 4G Perú 650 rural locations (97% of 670 locations) 61.56
deployment were connected to Entel’s 4G network.
76% of the investment in 5G and 4G in Perú
benefits eligible communities.
Emergency Network Chile Expanding network to serve more than 10,000 2.18
Expansion7 users in remote locations.
Access to Wireless Broadband Chile 36,706 households with Fixed Wireless 1.54
Essential expansion in “Red Broadband service in eligible communes.
Services Zones”
Renewable Renewable Energy Chile An 8-year-long PPA agreement with Enel Chile 13.03
Energy Purchase contributed to Renewable energy use growing
from 20% of total energy use in 2019, to 23% in
2020.
Total Allocated 421.83
Total Unallocated 387.17
Total fund raised 800

4 Entel has included in the CAPEX figures only the portion of the investment (69.4% of the total project) that targets underserved zones.
5
Entel has been performing a 4G network expansion plan fully focused on social housing developments in the outskirts of the larger cities, smaller towns,
and rural and other areas with lower connectivity.
6 Expenditures aimed at rural areas that lacked access to Internet and had potential for social and/or productive development that could be realized by

providing this access.

7 To respond to the Covid-19 pandemic, Entel expanded the network in remote/isolated locations where the increased traffic risked collapsing the service,

including Easter Island, Puerto Williams and other similar locations.

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