32642 - CF ACLEDA subdebt 2

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Summary of Investment Information

Project Number

32642

Company Name

ACLEDA BANK PLC.

Date SPI Disclosed

Nov 6, 2012

Country

Cambodia

Region

East Asia and the Pacific

Projected Board Date

Dec 7, 2012

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 14, 2012
Signed : Dec 19, 2012
Invested : Mar 22, 2013

Sector

Commercial Banking - Microfinance

Project Description

The proposed investment consists of a US$ 40 million 7-year subordinated debt to ACLEDA Bank Plc. (“ACLEDA Cambodia” or the “Bank”), which is expected to be funded fully through the IFC Capitalization Fund (the “Cap Fund”), as the proposed project is fully consistent with the Cap Fund’s objective of supporting a systemic bank that is capable of providing credit to emerging economies but is facing significant challenges to raise capital in international capital/credit markets, due to the global financial crisis.
The proposed investment will support ACLEDA Cambodia’s growth plan of further expanding its branch network in Cambodia and regionally, and continuing to move up market to better serve larger medium SMEs.

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 Microfinance Borrowers

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

Development Impact

E&S Category Rationale / Risks and Mitigation

This transaction involves a Tier-II debt investment and the overall portfolio risk is considered to be low to medium. The project has therefore been categorized as FI-2 in accordance with IFC’s Environmental and Social Review Procedure. ACLEDA''s main business areas are microfinance and SME and 50% of the loans in the Bank''s portfolio are between US$10,000 and US$100,000. The sector exposure is mainly focused on trade (40% of the Bank’s loan portfolio), services (20%), and agriculture (18%). For this project the Bank will be required to screen loans against the IFC Exclusion List and the Cambodian E&S laws and regulations. In the event that the Bank expands its business to provide project or corporate finance, the Bank will be required to ensure that those borrowers comply with IFC''s Performance Standards.

The main E&S risks and impacts of the project derive from the E&S risks of the Bank’s lending activities, the capacity and systems in place to manage these risks, and the Bank’s practices with regard to labor and working conditions. Under the requirements of the existing IFC investment, the company has appointed an E&S officer and two E&S coordinators and developed an environmental and social management system (“ESMS”). The ESMS, among others, requires the Bank to screen projects against the IFC Exclusion list and to ensure compliance with Cambodian national E&S laws and regulations. The Bank is however in the process of upgrading the current ESMS and in particular to enhance its capacity to assess and manage potential E&S risks associated with the Bank’s investment activities.
The Bank’s labor management was found to be consistent with the requirements of IFC Performance Standard 2 on Labor and Working conditions.

Contacts

For Inquiries About the Project, Contact

Financial Institution Department (FID)
ACLEDA Bank Plc.
Headquarters: #61, Preah Monivong Blvd., Srah Chork, Daun Penh, Phnom Penh, Cambodia
Tel: 855 23 998 777 / 430 999
Tel: 855 23 998 666 / 430 555

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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.

Task Description	Anticipated Completion Date
Upgrade the current ESMS	Within 3 months after Disbursement
Implement the upgraded/updated ESMS	Within 5 months after Disbursement

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