32944 - CCFP SocGen II

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Summary of Investment Information

Project Number

32944

Company Name

SOCIETE GENERALE SA

Date SPI Disclosed

Nov 13, 2012

Country

World Region

Region

Global

Projected Board Date

Dec 13, 2012

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Nov 30, 2016

Department

Gbl Ind, Manufact, Agribus & Services

Industry

Agribusiness and Forestry

Previous Events

Approved : Dec 21, 2012
Signed : Dec 27, 2012
Invested : Jan 23, 2013

Sector

Other

Project Description

As part of IFC’s Critical Commodities Finance Program Phase II (“CCFP II”), IFC is proposing the following project: 1) an expansion of the funded risk-sharing facility (“CCFP SocGen”, Project No. 34955) with Société Générale SA (“SocGen”or “the Bank”); 2) an extension of the maturity of the facility from March 2014 to January 2015. The US$150 million increase would supplement IFC’s existing US$250 million investment in the facility, bringing up IFC’s total participation up to US$400 million in SocGen’s trade and commodity finance portfolio of the critical agriculture and energy commodities/inputs.
CCFP program is a public-private partnership (“PPP”) initiative that is part of IFC’s multi-faceted rapid global financial crisis response. It is aiming at mitigating disruptions in two critical commodity value chains: (i) exports and imports of agricultural commodities and inputs globally; and (ii) imports of energy products into IDA or IDA- blend countries.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	150.0
Equity

Development Impact

The CCFP-Bank facility is expected to have the following specific development impacts:
- Increase Liquidity: The Facility will ensure continuing and additional funding to the major agricultural and energy sectors in Emerging Countries, especially in Africa and IDA countries. This Facility will contribute to the Bank maintaining its level of business in commodity finance. Among other things, the Facility will enable traders to purchase from and finance agricultural producers, the mainstay of most economies in Africa, and ensure food security and income for the public at large, but especially to farmers.
- Strong Demonstration Effect by catalyzing other IFIs to Support Agri and Energy Finance: By supporting commodity backed finance and outreach in partnerships with banks, the facility will have a significant demonstration impact on other banks, especially local /regional banks to participate in funding the agricultural and energy sectors. This would ultimately help increase access to finance for critical economic sectors.
- A steady supply of critically needed refined oil products through regular channels will keep prices in check, remove parallel market incentives, improve affordability for the vulnerable poor and contribute to sustaining local economic activities.

E&S Category Rationale / Risks and Mitigation

This project has been classified as FI-2 according to IFC''s Environmental and Social Sustainability Policy. The proposed facility is a funded risk sharing facility to support trade and commodity finance transactions originated by Societe Generale in the agribusiness and energy sectors. This project is considered to have limited adverse E&S risks and impacts which are largely reversible and can be managed through mitigation measures.

The proposed project supports agro-commodities and energy trade portfolio. As it relates to agro-commodities, the portfolio of funded trade transaction will be agro-commodity traders, importers/exporters, and processors, largely in the Africa region. Type of agro-commodities the existing CCFP SocGen facility has financed includes cocoa, coffee, wheat, soybean, corn and cotton.

The applicable E&S requirements include a combination of IFC Exclusion List and portfolio eligibility criteria based on the applicable country/commodity E&S risk matrix (ref. Global Mapping of E&S risks associated with agro-commodity production - GMAP) associated with the production of agro-commodities, especially as it relates to harmful child/forced labor and biodiversity risks associated with the conversion of natural and critical habitats, and E&S counterparty assessment, as appropriate. Societe Generale will not have direct exposure to primary agro-commodity supply chain issues through this type of facility. Therefore, it is not subject to IFC’s supply chain requirements outlined in the IFC’s Performance Standards.

SocGen has an Environmental and Social Sustainability Policy. This policy applies to all its banking and financial operations. Sector-based (e.g. mining, oil and gas) and cross-cutting policies define the specific standards that SocGen applies to its corporate and project-based lending operations. SocGen is developing an agri-business sector policy which it is expected to be completed in 2013. This E&S framework is operationalized through internal corporate procedures for the E&S review process of project-based lending activities. SocGen is presently developing and implementing an approach for corporate level E&S assessments of client’s E&S performance, including reputational and credit risks. SocGen has been an Equator Principles Financial Institution (“EPFI”) since 2007. Societe Generale will provide to IFC corporate E&S risk screening review done for sub-borrowers selected under #31754 and pro-actively under this investment (#32944) as part of the clearance process of eligible agro-commodity related obligors.

Societe Generale complies with IFC Performance Standard 2 on Labor and Working Conditions.

IFC will make the GMAP available to Societe Generale, starting in January 2013, for its use as part of a pilot project under review for 2013.

Internal risk screening procedure for trade finance will be reviewed, and might be enhanced, including application of the Global Map for E&S risk assessment and management of agro-commodity production (GMAP);	On or prior to commitment
Submission of counterparty assessment for “orange and red” combinations and periodic (annual) report for all supported transaction as per the format to be provided by IFC.	On-going basis during project implementation

Contacts

For Inquiries About the Project, Contact

Société Générale GLFI/NAT17 Cours Valmy92897 Paris LA Défense cedex

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