31456 - CF CBC Tier 2

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

31456

Company Name

COMMERCIAL BANK OF CEYLON PLC

Date SPI Disclosed

Dec 18, 2012

Country

Sri Lanka

Region

South Asia

Projected Board Date

Jan 20, 2013

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Jul 20, 2023

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jan 25, 2013
Signed : Feb 1, 2013
Invested : Mar 13, 2013

Sector

Commercial Banking - General

Project Description

The proposed project consists of a subordinated debt investment of US$ 75 million which will strengthen the Tier 2 capital base of CBC, a systemically important bank in Sri Lanka.

Sponsor / Cost / Location

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Quasi-Equity	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Market Signal: JBIC''s involvement in the Project sends an important market signal to international investors endorsing Sri Lanka as an investment target. This will have a key impact on FDI flows particularly at a time when the country is emerging from a 26 year civil war and there is ongoing uncertainty in global financial markets.

Strengthen Systemic Impact: A stronger capital base will enable CBC to enhance its systemic contribution to finance the post-conflict reconstruction efforts in the North and East of the country and infrastructure projects identified as a national priority to accelerate economic growth.

Increased Access to Finance: CBC is a major SME lender in Sri Lanka, comprising nearly a third of its portfolio. The Project will provide additional funding for the SME sector, which is a key driver of economic growth, and the tangible development outcome of this financing will be monitored through the incremental increase in the Bank''s SME portfolio.

Promote Regional Integration: The Project will help promote regional economic integration by supporting the expansion of CBC''s expansion of its regional presence.

Optimize Capital Structure of Banks: The Project meets a key priority of the Central Bank of Sri Lanka in raising Tier 2 capital to optimize the capital structure of key domestic banks. Tier 2 capital is relatively new in Sri Lanka and nor widely prevalent since weak market conditions have precluded banks from readily accessing subordinated debt.

Address Market Failure: There is a clear role for IFC/AMC in addressing market failure by providing large ticket equity funding otherwise unavailable from commercial investors due to limited absorptive capacity in domestic capital markets and global investor uncertainty in the aftermath of the recent financial crises.

Introduction of a new Investor: The introduction of JBIC as an indirect new investor consequent to the AMC funding will be beneficial for the Bank. JBIC sees investment prospects in Sri Lanka in other sectors as well making it a potentially attractive strategic partner and co-financier for projects funded by CBC.

E&S Category Rationale / Risks and Mitigation

The lending business of the bank includes SME finance, project finance, short term finance, trade finance and microfinance. Overall, this presents potentially adverse environmental or social risks and impacts that will be diverse in nature, widespread in geography and some of which will have irreversible E&S impacts. Hence, the E&S risk of the proposed investment is high and the project is categorised as FI-1. The applicable Performance requirements will be i) the IFC- FI Exclusion List; ii) The host country E&S laws and regulations; and iii) the IFC Performance Standards.

The key E&S risks and impacts derive from the bank's capacity to manage the potential environmental and social risks associated with its operations. The typical risks and impacts in SME segment are limited and site specific (e.g. related to occupational health & safety, emergency response, waste-water discharge, air emissions, labour, etc.). The bank is an existing IFC client and thus the bank has appointed an E&S specialist and is implementing an adequate E&S risk management system (ESMS) including an external communications mechanism. The existing ESMS will continue to be implemented for this project as well. The bank has adequate HR policies in line with IFC Performance Standard - 2 requirements for its operations in Sri Lanka and is in the process of upgrading its HR policies for Bangladesh. The bank will ensure that the upgrades are in line with IFC Performance Standard -2 requirements.

Task Title & Description	Status	Comments	Completion Date
Nominate officers	Completed	Letter notification sent by client in 2013	02/05/2013
Establish SEMS	Completed	Letter confirmation sent by SEMS officer.	02/20/2013
Formalize procedures	Completed	same as SEMS	02/20/2013
Staff Training	Completed	First training completed by IFC in May 2013. Further regional trainings completed by client between October and December 2013, last one being on 13th December. Email confirmation by client.	12/13/2013
Other1 Company's board approved training plan	Completed	letter confirmation from the MD	02/06/2013

Contacts

For Inquiries About the Project, Contact

Shantha Balasuriya – Head of Global Treasury
Commercial Bank of Ceylon PLC
Commercial House,
21, Bristol Street, P.O. Box 856, Colombo 1, Sri Lanka.

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer