CBG is a US incorporated company which was established in 1963 following an agreement between the Government of Guinea (“GoG”) and Harvey Aluminum Company of Delaware, a Delaware (US) corporation, now Halco Mining Inc., to mine the bauxite deposits of the Boké region. CBG has been successfully operating the world class Sangaredi bauxite mine for over 40 years. The Company is 51% owned by Halco Mining Inc. (“Halco”), a US incorporated company, which is in turn owned by a consortium of aluminium producers: Alcoa (45%), Rio Tinto (45%) and Dadco (10%). The remaining 49% is owned by the GoG.

The project cost for the expansion is estimated at US$752 million. IFC’s proposed investment is a senior debt facility of up to US$200 million. The remainder is to be funded by other lenders together with internally generated cash.

138.30 million (USD)

Product Line	IFC Investment (million USD)
Risk Management	3.30
Guarantee
Loan	135.0
Equity

* These investment figures are indicative

The Sangaredi bauxite mine is located in northwest Guinea and covers parts of the administrative regions of Boké, Téliméle and Gaoual. The city of Sangaredi, which supports the mining operations, is 370 km north of the capital of Conakry and 105 km northeast of the port of Kamsar.

CBG is the government of Guinea''s most important revenue generator and largest private sector enterprise in the country. The Project accounted for 16 percent of the country''s GDP, 20% of the government revenues and employed approximately 5,000 Guinean nationals in 2014. The proposed expansion will yield the following benefits:
(i) Increased supply of bauxite production: The expansion will increase bauxite production from 13.5 Mtpa to 18.5 Mtpa further anchoring CBG''s position as one of Guinea''s lead private sector actors and Guinea''s world position as a key bauxite exporter for decades to come.
(ii) Contribution to government revenues: Direct contributions to government will consist of corporate taxes, withholding taxes, customs duties and import taxes estimated at US$140 million per annum.
(iii) Local employment: CBG has a considerable impact on employment in the country. The Company has 5,000 direct employees, almost all of whom are national hires.
(iv) Community development and linkages program: CBG is implementing a range of community development and linkages programs to stimulate economic development in the Boke region. In line with the Company''s growth, CBG will continue to spend on social development programs, ranging from education, health, building local skills and implementing a local supplier chain. IFC will provide ongoing advice to further enhance the impact of these initiatives.

IFC has considered the governance risks to Project benefits and is satisfied that the Project should be supported. In evaluating this investment, IFC has reviewed a variety of governance metrics, including the Worldwide Governance Indicators, Transparency International’s Corruption Perceptions Index, the World Bank’s CPIA and Doing Business Report and the World Bank Group’s engagement in the country. Guinea ranks low across these metrics but has been consistently improving over the past few years. The GoG has embarked on a comprehensive strategy to tackle governance weaknesses with development partners, including the World Bank and has made good progress in recent years culminating, for example, in the passing of a new mining code that was promulgated in April 2013. The main improvements brought by the new code include its strong anti-corruption/pro-transparency stance. Guinea has completed its EITI membership process and is now fully compliant as of 2015. CBG’s mining convention has been disclosed in accordance with IFC’s requirements. The government continues to receive extensive technical support from the World Bank and African Development Bank aimed at building capacity in the Ministry of Mines and Geology and improving mining regulations. The World Bank is also engaged in improving public financial management, further ensuring that mineral revenues will be invested more effectively in infrastructure and human capital. The current government which won reelection last October 2015 remains committed to improving governance in the mining sector.

IFC''s expected additionality includes:
(i) Provision of long-term funding - The proposed long-term $135 million IFC A loan with a 15 year tenor (out of a total long-term facility of up to $720 million) will be the first of its kind for a Guinean corporation.
(ii) Mobilization - IFC through the MCPP (Managed Co-Lending Portfolio Program) will provide up to $65 million in senior loan funding (15 year tenor) bringing IFC''s total lending to $200 million.
(iii) Environmental and social expertise - As the Environmental and Social bank, IFC has played the lead role amongst the arranging banks to assist the Sponsor in completing E&S due diligence and in developing action plans to mitigate impacts over the life of the Project. IFC will continue to support the Company in areas such as biodiversity, resettlement and water management.

This is a category A project due to the potentially significant, diverse, and irreversible environmental and social risks and/or impacts inherent to a project of this nature and scale operating in Guinea. The key concerns relate to the cross-cutting issues of water resources, biodiversity, community development and ecosystem services. The project will also result in impacts from physical and economic displacement starting in 2016.

Please refer to the related Environmental and Social Review Summary (ESRS) document for this project.

Please refer to the Environmental and Social Action Plan (ESAP) tab in the related Environmental and Social Review Summary (ESRS) document for this project.