34837 - IIF A&B Loan

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Summary of Investment Information

Project Number

34837

Company Name

PT INDONESIA INFRASTRUCTURE FINANCE

Date SPI Disclosed

Apr 17, 2014

Country

Indonesia

Region

East Asia and the Pacific

Projected Board Date

May 21, 2014

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 19, 2014
Signed : Jun 19, 2014
Invested : Jul 18, 2014

Sector

Development Finance Company

Project Description

The proposed project (the “Project”) consists of a senior debt package for up to US$250 million to PT Indonesia Infrastructure Finance (the “Company”) in Indonesia. The Project will support the Company’s lending program for a pipeline of infrastructure projects in Indonesia.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
Equity

Development Impact

- Provision of long-term capital, which is scarce and not readily available in the market for young institutions such as the Company;
- Continued know-how transfer in the areas of Environmental and Social ("E&S") risk management and project finance underwriting;
- Support to the government of Indonesia''s efforts in increasing investment in infrastructure projects, both for increasing urbanization as well as rural integration;
- Improve access for the Indonesian population to infrastructure such as electricity, water, transportation, telecommunications, etc;
- Economic benefits to the country by dividends generated by the infrastructure projects as well as taxes levied to the project companies, as well as indirect impact of additional infrastructure on the overall economy through higher growth and more efficient operations; and
- Job creation at the project company that receives financing from the Company as well as in businesses that provide services to such project company.

- IFC as an equity holder has been playing a leading role among the shareholders and can play a key role in the debt raising: (i) IFC''s leadership in E&S will be important for international lenders; (ii) Shareholder presence provides an important seal of approval (further strengthened with the A loan participation);
- In addition to its direct investment in the Company, IFC works closely with the Company leveraging each other in advisory and investment services to jointly support projects, thus increasing the likelihood of infrastructure projects being successfully implemented.

E&S Category Rationale / Risks and Mitigation

The Project will support the Company in the financing of infrastructure investments throughout Indonesia, which carry inherently high E&S risks. The Project has therefore been classified as FI-1 according to IFC’s Sustainability Policy. The Company has been a client of IFC since IFC’s initial equity investment in 2009 (PT Indonesia Infrastructure Finance Facility #26443).

The main E&S risks of the Project are related to the Company''s capacity to identify and manage the impacts of its portfolio and prospective projects, which will focus on the development of infrastructure projects in Indonesia. The Company''s projects can have potentially high E&S risks that may result in community and resettlement impacts including indigenous communities, impacts on local flora and fauna, occupational health and safety, water and air pollution and impacts on cultural heritage. In order to manage and mitigate these impacts, the Company has in place a robust and IFC PS (2006) compliant E&S Management System (“ESMS”) which also references other lenders/ shareholders’ E&S requirements, specifically World Bank and Asian Development Bank standards. Currently, IFC recognizes the Company’s E&S performance as ‘satisfactory’, assisted via the Company’s two full-time E&S specialists with an additional part time specialist. The Company is actively recruiting an additional full time E&S manager.

As part of the Project, the Company is expected to (i) augment the existing ESMS to ensure consistency with IFC''s 2012 Performance Standards requirements, (ii) continue to conduct E&S due diligences (ESDDs) 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) continue the ongoing monitoring framework supervising the E&S risks of all sub-projects and report to IFC.

Task Description

Anticipated Completion Date

Augment the Company's existing ESMS to ensure consistency with IFC's 2012 Performance Standards and applicable guidelines, such augmented ESMS to apply to all projects that passed the Company's initial credit review process after December 9, 2014, with the existing ESMS applying to and, as the case may be, continuing to apply to projects that passed the Company’s initial credit review process on or before December 9, 2014.

December 9, 2014

Contacts

For Inquiries About the Project, Contact

Nastantio W. Hadi
PT Indonesia Infrastructure Finance
The Energy Building 15th Floor, Sudirman Central Business District, Lot. 11A
Jl. Jend. Sudirman Kav.52-53 Jakarta 12190 Indonesia
Phone : 62-21-29915060

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Local Access of Project Documentation

As above

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.

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