35162 - RSF BISTP

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Summary of Investment Information

Project Number

35162

Company Name

RSF Bk Intl Sao Tome

Date SPI Disclosed

Dec 24, 2014

Country

Sao Tome and Principe

Region

Africa

Projected Board Date

Jan 30, 2015

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Mar 20, 2017

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : May 29, 2015
Signed : Jul 20, 2015

Sector

Commercial Banking - Risk Mgmt Facility

Additional Project Attributes

Blended Finance

Project Description

The proposed project is an unfunded Risk Sharing Facility (“RSF”) with Banco Internacional de São Tomé e Príncipe (“BISTP” or the “Bank”) on a portfolio of up to STD 55.03 billion (approximately US$3 million equivalent) of short and medium term loans to qualifying local Small and Medium Enterprises (“SMEs”) in São Tomé e Príncipe (“STP”). Under the RSF, IFC will share with BISTP, up to 50% of the facility’s principal portfolio losses up to STD27.51 billion, (approximately US$1.5 million equivalent).

The proposed investment is expected to strengthen BISTP’s SME banking activities and contribute to further financial sector development in STP. The investment will also serve as a demonstration effect for other banks to on-lend to SMEs, thus increasing access to finance for this market segment.

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
Guarantee	Loans to SME Borrowers

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

Development Impact

The Project is expected to have the following development impact:

1. Financial Sector Development: by strengthening of the STP's banking sector through introduction of a new product (RSF).
2. Increase Access to Finance for SMEs: The RSF will help address the gap in access to working capital and capital for small capex (equipment expansion and modernization) for SMEs.
3. Indirectly support local entrepreneurs, in particular the SMEs which are important or job creation.
4. Improve Environmental & Social assessment and mitigation management system of a leading bank in the country.

The Project is expected to have the following additionality:

1- Helping BISTP to expand lending activities into a riskier market segment.
2- Through the RSF to BISTP, IFC will assist STP to deepen the financial sector by expanding access to finance for riskier sectors.
3- Global expertise in structuring risk-sharing facilities aimed at ramping up lending to riskier SMEs by sharing losses and thereby reducing capital requirement.
4- Assist BISTP in implementing E&S management system.

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

E&S categorization Rationale
This project has been categorized as an FI-2 in accordance with IFC's Environmental and Social Review Procedure. The proposed investment is an unfunded Risk Sharing Facility (RSF) on a portfolio of up to STD 55.03 billion (approximately US$3 million equivalent) of eligible short and medium term loans to SMEs operating in sectors such as tourism, general construction & public works. BISTP’s current SME portfolio entails exposures to service industries, trade and small scale manufacturing. The overall portfolio risks includes a limited number of business activities that have potential medium level adverse environmental or social risks or impacts that are few in number, generally site specific, possibly reversible, and readily addressed through mitigation measures. For this project, BISTP will be required to screen the eligible loans against the IFC Exclusion List and the Environmental and Social laws of Sao Tome and Principe.

Main E&S Risks
The key E&S risks and impacts derive from the capacity of BISTP to identify and manage the potential environmental and social risks associated with its lending activities to the SMEs, which typically have some medium level environmental risks (waste management, effluent treatment, air emissions, disposal of hazardous materials, etc.) and social risks primarily related to occupational, health and safety (lack of occupational training, use of personal protective equipment, lack of emergency training, etc). Additional E&S risks and impacts of the Project derive from the capacity and systems that are in place to manage these risks, and the Bank’s practices with regards to labor and working conditions.

At present, BISTP does not have an Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management of its lending activities. The Bank largely complies with the requirement of PS2 on Labour and working conditions but will need to develop a grievance mechanism and occupational health and
safety procedures.

Contacts

For Inquiries About the Project, Contact

Mr. João CristóvãoCEO and Chairman of the Executive Committee.
Tel: +239 224 3100
Fax: +239 222 2427

and

Mr. Acacio Elba Bonfim
Executive Director
Tel: +239 224 3103
Fax: +239 222 2427

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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.

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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.

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Task Title & Description	Anticipated Completion Date
Nominate officers	02/27/2015
Establish SEMS	10/01/2015
Formalize procedures	02/27/2015
Develop guidelines	10/01/2015
Staff Training	10/01/2015
Life & Fire Safety Plan	10/01/2015

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