37029 - NBK - Egypt

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Summary of Investment Information

Project Number

37029

Company Name

NATIONAL BANK OF KUWAIT-EGYPT SAE

Date SPI Disclosed

Nov 2, 2015

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

Dec 7, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Sep 30, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 22, 2015
Signed : Dec 30, 2015
Invested : Jan 15, 2016

Sector

Commercial Banking - General

Project Description

The Project involves a senior loan of up to US$50 million supported by a line under the Global Trade Finance Program (“GTFP”) to National Bank of Kuwait Egypt (“NBKE” or the “Bank”) to target medium enterprises and Sustainable Energy Finance (“SEF”). NBKE is among the top 10 private sector commercial banks operating in Egypt with total assets of US$4.4 billion as of June 2015. The Bank has been established in 1980 and is listed on the Egyptian Stock Exchange (“EGX”) since September 1994. NBKE provides conventional and Islamic commercial banking services including corporate finance and investment advisory on mergers and acquisitions, initial public offering and underwriting; conventional and Islamic asset management services including fund, wealth and portfolio management.

Associated Advisory Engagement

IFC is also coupling the investment with an advisory services engagement through providing a training on Sustainable Energy Finance.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
Equity

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
Straight Senior Loan	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:
(i) Strengthening the banking sector in Egypt by providing long term foreign currency financing (FCY) funding, which is not readily available in the market.
(ii) Supporting the Bank to increase its reach to medium enterprises; a segment critical to the Egyptian economy that is chronically underserved.
(iii) Supporting the Bank in incorporating SEF as part of its product offering for both corporates and medium enterprises.

(i) Long-term FCY financing: The project will provide NBKE with long term FCY which is very much needed to support its expansion strategy in the market.
(ii) E&S Standards implementation: NBKE will adopt IFC E&S standards which will benefit all stakeholders.
(iii) The relationship with a strong regional sponsor: The project will strengthen IFC''s relationship with the NBK Group.
(iv) SEF financing: a new product offering for the Bank that is in line with the increased focus on energy efficiency in Egypt.

E&S Category Rationale / Risks and Mitigation

The proposed facility will target Small and Medium Enterprises (SMEs) and Sustainable Energy Finance (SEF). The bank exposure under the medium enterprises will be mainly to medium risk sectors. The SME and SEF portfolio will largely be comprised of business activities that have limited adverse environmental and social risks and impacts that are few in number, site specific, largely reversible and can be readily addressed through mitigation measures. This project is classified as Category FI-2 project according to IFC's Environmental and Social Review Procedure. For this project the client will be required to screen the asset class of the SME and SEF loans that meet the IFC eligibility criteria against the IFC Exclusion List and host country Environmental and Social laws and regulations, and IFC performance standards, where applicable.

NBKE does not have and Environmental and Social Management System (ESMS) in place and no designated environmental and social officer.

The main E&S issues of this investment relate to NBKE's capacity to manage environmental and social risks associated with its investments in line with the applicable requirements. IFC's E&S related requirements under this project is that NBKE will be required to establish an ESMS to screen loans and designate staff members responsible for E&S issues and provide them with the necessary training for implementation of the ESMS.

NBKE will also be required to develop an external communication mechanism addressing E&S complaints.

Task Title & Description	Status	Comments	Completion Date
Nominate officers	Completed	notification email	10/31/2016
Establish SEMS	Completed	NBKE shared the final version. NBKE informed IFC that E&S policy and procedures have been approved by NBKE Board of Directors and the Operational manual has been reviewed and approved by the Board Risk Committee (BRC).	11/09/2017
Staff Training	Completed	Reported by the client	02/10/2018
Other1 Develop an external communication mechanism addressing E&S complaints	Completed	external communication mechanism is part of the ESMS	11/09/2017

Contacts

For Inquiries About the Project, Contact

Karim Kamal
Head of Global Relationship Management

National Bank of Kuwait - Egypt
Plot No.155, City Center, First Sector
5th Settlement, New Cairo, Egypt
Tel (+202) 261 493 00
Fax (+202) 261 358 64

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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.

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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