33862 - FDN EQ

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Summary of Investment Information

Project Number

33862

Company Name

FINANCIERA DE DESARROLLO NACIONAL SA

Date SPI Disclosed

Feb 24, 2014

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Mar 27, 2014

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Apr 3, 2014
Signed : Oct 10, 2014
Invested : Dec 9, 2014

Sector

Development Finance Company

Project Description

The proposed project consists in a potential equity investment to acquire up to 20% of Financiera de Desarrollo Nacional (FDN)’s total capital as part of the transformation of FDN into a catalytic entity for infrastructure financing in Colombia.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	127.19

Development Impact

IFC''s expertise in other regions has shown that infrastructure focused financial institutions can play a catalytic role in the markets. The proposed project is therefore expected to have a major impact in Colombia. Some of the most relevant development impacts will be:
(i) Development of the Infrastructure Finance Market: IFC will support the creation of an institution that is expected to develop further the infrastructure financing market in Colombia, thus, supporting the development of the infrastructure sector in the Country.
(ii) Institutional capacity building: Supported by IFC, FDN will develop its own project structuring capabilities. This is vital for Colombia as structuring capabilities of domestic financial institutions and state and local governments for complex infrastructure projects are limited.
(iii) Increased Competitiveness: The project is expected to have a strong impact on the Country''s infrastructure competitiveness, which in turn will enhance Colombia''s private sector competitiveness thereby increasing its capacity to generate new jobs and support inclusive economic growth.

FDN will benefit from IFC''s experience in Infrastructure Advisory, Investing in Infra projects as well as investing in specialized infrastructure finance institutions. FDN also expects to benefit from the experience IFC has in structuring capital markets solutions for debt financing including guarantees and securitizations.
IFC will bring to bear its experience in developing similar institutions in Indonesia and India (IIF and IDFC) and will enable FDN learn directly from these entities.
IFC will participate in FDN project level transactions as a co-investor as well as potential participant in securitization of its portfolio to achieve efficient funding solutions in the financial markets. IFC may support FDN in developing solutions for the liability side including longer term local currency bonds.
Finally, FDN will implement best-in-class Corporate Governance and Environmental and Social practices.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The main E&S risks of this project are related to the FDN''s capacity to identify and manage the impacts of its portfolio, which will focus on infrastructure. The Company''s projects can have potentially high E&S risks that are related to community impacts, including indigenous communities, impacts on local flora and fauna, occupational health and safety, water and air pollution, and impacts to cultural heritage. In addition, some of these projects may involve involuntary resettlement.

In order to manage and mitigate these impacts, FDN is expected, based on the agreed working plan, to: (i) Develop an E&S Management System (ESMS) and capacity to review all sub-projects per the applicable E&S laws and regulations and the Performance Standards, (ii) conduct E&S due diligences (ESDD), with the help of qualified professionals, to identify the applicable E&S risks of each sub-project and require corrective actions as needed to ensure that these risks are managed according to the Performance Standards and applicable laws; (iii) implementing a monitoring framework to supervise the E&S risks of all sub-projects and report to IFC. IFC will review the first three ESDDs prior to investment in each project to support the implementation of the ESMS.

Contacts

For Inquiries About the Project, Contact

FDN
Free National Inquiries Line
Tel: (57) 018000 111424
Cra 7 No 71-52 Torre B Piso 6
Bogotá, Colombia

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
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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.

Task Title & Description	Anticipated Completion Date	Status	Comments	Completion Date
Establish SEMS		Completed	Completed	12/09/2014
Staff Training		Completed	Completed	12/09/2014

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