32286 - CHUEE SME BOB

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Summary of Investment Information

Project Number

32286

Company Name

CHUEE Facility - Bank of Beijing

Date SPI Disclosed

Dec 27, 2012

Country

China

Region

East Asia and the Pacific

Projected Board Date

Jan 31, 2013

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Nov 30, 2016

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Mar 12, 2013
Signed : Mar 26, 2013

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

IFC is in discussion with Bank of Beijing (“BOB” or the “Bank”) to enter into an unfunded risk sharing facility (“RSF”) to support energy efficiency (“EE”), renewable energy (“RE”) and water efficiency (“WE”) projects with small and medium enterprises (“SME”) in China (the “Project”, or “CHUEE SME BOB”). In this proposed Project, IFC would take credit risk in a loan portfolio to be originated and funded by the Bank. The Project is expected to receive support from the Global Environmental Facility (“GEF”) and Chinese Central Government.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	77.63
Loan
Equity

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
Guarantee	Loans to SME Borrowers

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

Development Impact

(i) Environmental benefit: Upon full ramp-up for the Project, 233,000 tons of CO2 emission and 600,000 cubic meters of water is estimated to be reduced per year;

(ii) SME access to finance: Upon full ramp-up for the Project, at least 44 SME borrowers will be financed.

(iii) Demonstration effect: 1) encourage governments to participate in future public private partnership initiatives of this type, within and beyond China; 2) generate a broader market impact and demonstrate the viability of energy efficiency and water efficiency projects; and 3) catalyze financial institutions to offer sustainable energy/water financing to SMEs;

(iv) Capacity building: (1) promote the improvement of industry-specific loan underwriting process/procedure and strengthen risk management practices; and (2) increase the Bank''s capacity to analyze and finance energy/water efficiency projects;

(i) With more than a decade experience in supporting EE financing globally, especially in China through CHUEE, IFC is in the leading position to continue innovation to address major market gaps for SMEs to access funding for EE and RE projects and activities;

(ii) Using global and China-specific knowledge and expertise in EE/RE financing, unique to IFC and unavailable in the local market, IFC will leverage public and private sources of capital to increase development impact;

(iii) IFC''s advisory services will be delivered through established platform which has great experience in building banks'' capacity to do EE/RE lending and SME finance;

(iv) IFC is helping Partner Banks to focus on SMEs, especially those in frontier regions where EE/RE/WE funding is still at a relatively early stage;

(v) In the absence of IFC''s participation, it will be very difficult to raise funding for first loss and advisory services, both critical for the success of the Program; and

(vi) facilitate market absorption of water technologies.

E&S Category Rationale / Risks and Mitigation

This project involves an unfunded RSF aimed to support small to medium energy efficiency and renewable energy loans and has been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. The RSF target loans entail limited potential E&S risk and impacts that are few in number, generally site-specific, largely reversible and can be readily addressed through mitigation measures. For the project BOB will be required to assess and manage the potential E&S risks of such loans in compliance with the IFC Exclusion List, applicable Chinese E&S laws and regulations, and applicable Performance Standards.

The main E&S risks and impacts of the project derive from the E&S risks of the RSF target loans, the capacity and systems in place to manage these risks, and BOB’s practices with regard to labor and working conditions. At present BOB has developed an Environmental and Social Management System (ESMS) for undertaking E&S risk management of its lending activities. However, its implementation of the ESMS for the RSF portfolio will need to be strengthened by incorporating proper E&S review and monitoring in the loan review process and providing additional training to the staff involved in ESMS implementation. BOB will be required to comply with relevant Chinese labor laws and regulations and the requirements of IFC Performance Standard 2 on Labor and Working conditions.

Task Description	Anticipated Completion Date
Confirm the appointment of an E&S Officer	On or prior to Commitment
Upgrade the existing ESMS to strengthen E&S review and monitoring	On or prior to the RSF effectiveness date
Prepare an ESMS Plan for implementing of the upgraded ESMS within 3 months of the RSF effectiveness date	On or prior to the RSF effectiveness date
Provide IFC with a report on implementation of the ESMS Plan	At the end of 3 months after the RSF effectiveness date

Contacts

For Inquiries About the Project, Contact

Name: Bank of Beijing
Address: No.17C Finance Avenue, Xicheng District, Beijing, China
Telephone:86-10-66223826
Fax: 86-10-66223833
Website: http://www.bankofbeijing.com.cn/

For Inquiries and Comments About IFC, Contact

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

Local Access of Project Documentation

To be provided by E&S specialists.

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.

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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.

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