32288 - CHUEE Jiangsu

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Summary of Investment Information

Project Number

32288

Company Name

Bank of Jiangsu Co., Ltd.

Date SPI Disclosed

Sep 25, 2012

Country

China

Region

East Asia and the Pacific

Projected Board Date

Oct 26, 2012

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Nov 12, 2012
Signed : Nov 27, 2012

Sector

Commercial Banking - General

Project Description

IFC is in discussion with Bank of JiangSu (“BOJS” or the “Bank”) to enter into a risk sharing facility (“RSF”) to support energy efficiency (“EE”) and renewable energy (“RE”) projects with private enterprises in JiangSu province (the “Project”). 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 China Clean Development Mechanism Fund (“CDM Fund”), JiangSu Provincial Government and Chinese central Government.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	74.07
Loan
Equity

Development Impact

Environmental benefit: Upon fully utilization of the RSF, 257,000 ton CO2/year GHG emission is estimated to be reduced per year;
Access to finance: About 30 EE or RE projects will be financed under this project and most of the borrowers are expected to be SMEs. During the course, the Bank is expected to change its risk perception of EE and RE loans and would be willing to extend more credits to address EE and RE demand;
Capacity Building: The Project will help the Bank establish its internal capacity in indentifying and assessing EE/RE projects and get ready to expand the EE/RE products offering in the future ; and
Demonstration effect: The success of the Project will encourage more banks in JiangSu to provide the much needed EE findings to local manufacturers. The Project, as an innovative PPP ( Public Private Partnership) initiative to address China''s climate change agenda, will also set a role model for other provinces across China.

IFC''s proved records in EE and RE financing through CHUEE model in China enables IFC to mobilize the first loss funding from Chinese central government, JiangSu provincial government to support the Bank''s initiative to promote EE and RE lending in JiangSu province; and
IFC, with its advisory services team and strong global technical expertise, could support the Bank to build its internal capacity to implement EE and RE lendings;

E&S Category Rationale / Risks and Mitigation

This transaction involves an unfunded RSF aimed to support small to medium energy efficiency and renewable energy loans and the overall environmental & social risk is considered to be limited. The project has therefore been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. The key sectors of RSF target loans entail limited advance 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 BOJS will be required to screen and monitor the RSF target loans against the IFC Exclusion List, applicable Chinese E&S laws and regulations, and PSs for corporate/project finance if supported.

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 BOJS’s practices with regard to labor and working conditions. At present BOJS does not have an Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management of its lending activities and a full scale E&S due diligence is not yet part of BOJS’s loan review process. No staff/department has been assigned responsibility for E&S due diligence and monitoring, and addressing the training needs of all staff involved in ESMS implementation. BOJS was found to be in compliance with China relative labor laws and regulations and in line with the requirements of IFC Performance Standard 2 on Labor and Working conditions.

Action	Time Line (Proposed) and Deliverable	Descriptions
Nominate ESMS Officer/ Manager	On or prior to commitment *Deliverable:* Notification to IFC on the appointment of ESMS Officer/manager to serve as a point of contact on E&S issues and ESMS progress.	A staff from senior management level should be assigned as an ESMS officer/manager for overall responsibility on development and implementation of the ESMS (for the target lending services of the RSF). The assigned ESMS officer/manager should have sufficient authority to ensure all affected departments and entities are involved and adequately cooperate for the ESMS development and implementation processes. The main departments and entities probably will need to involve for BOJ include (but are not limited to) Risk Management and Compliance Department, Credit Management department and Plan & Finance Department at headquarter, Corporate and Small Enterprise Finance Departments, Credit Appraisal Department and relevant review/approval committees at both headquarters and branches for corporate and small loans.
Establish ESMS documentation	On or prior to the date the RSF is effective *Deliverable:* All ESMS documentation developed should be submitted to IFC’s satisfactory.	The ESMS should be established with necessary documentation to ensure consistency of E&S risk management across offices/locations of BOJ's operation. The ESMS documentation could be either as stand-alone documents or as specific procedure steps in the BOJ’s existing system (e.g. the credit manual/policy). The ESMS documentation should include, among others: (i) an E&S policy, (ii) E&S due diligence procedure, (iii) E&S risk control measures, (iv) E&S monitoring and reporting procedures, (v) responsibilities of ESMS operation, (vi) mechanism to address external E&S concerns. The ESMS shall be supported with necessary guidance notes/tools for its implementation. Examples of these guidance notes/tools include E&S risk categorization tool, E&S due diligence forms, E&S Action Plan templates, E&S monitoring/supervision check list, E&S reporting form and etc. The ESMS and its supporting tools should be designed to address the specific E&S risks of the target loans in compliance with IFC exclusion list and China applicable environmental and social laws and regulations, and PSs for corporate/project finance if supported under the RSF.
ESMS Trial-Run Phase	Within 3 months after the date the RSF is effective	A trial run period may or may not be imposed before ESMS's formal rolling out depending on the need. If a trail run period is imposed, a comprehensive review of ESMS' effectiveness should be performed to assess and make decisions on any needed revisions, improvements or adjustments of the ESMS.
ESMS Implementation and Training	On or prior to the date the RSF is effective for submission of the plan Within 3 months after the date the RSF is effective for completion of the implementation *Deliverable:* An ESMS implementation plan should be submitted to IFC’s satisfactory.	The ESMS implementation should be facilitated with a pre-defined ESMS implementation plan. The plan should specify the "to-be-taken" actions along with the time schedules and assigned responsibilities. One the key item in the plan is the ESMS staff training which often to be the first step of ESMS implementation. The plan should be approved by the senior management and communicated with all relevant departments and entities. The ESMS staff training may be tailored to accommodate the necessary levels of “need-to-know” for different audiences in applying the ESMS requirements. The ESMS training should at least be provided to: i) the ESMS officer/manager; ii) the managers and staffs in the line of risk management at both headquarters and branches; iii) the members of Credit Appraisal Committees at headquarters and branches; iv) account managers/loan officers involved in processing loans and monitoring portfolios.
ESMS Implementation Reporting	3 months after the date the RSF is effective *Deliverable:* An ESMS Implementation Report should be submitted to IFC’s Satisfactory.	After implementing the ESMS, an implementation report can be prepared in due course to summarize the execution of the plan including some key data such as the ESMS staff training records/results (e.g. the number of staffs trained, types of training undertaken...), the ESMS operation results (number of projects went through ESMS requirements) and etc.
ESMS Continue Operation	On-going after the implementation *Deliverable:* ESMS performance Reports should be submitted annually according to the format provided by IFC.	The ESMS is applied to process and supervise/manage all RSF target loans.

Contacts

For Inquiries About the Project, Contact

Bank of JiangSu
No. 55 Hongwu Bei Road ,Nanjing,
JiangSu Province, P.R.China
Telephone: 86-25-58588051
Fax: 86-25-58588089

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/
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Email: cao@worldbankgroup.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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