37161 - AAIB SL

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Summary of Investment Information

Project Number

37161

Company Name

ARAB AFRICAN INTERNATIONAL BANK

Date SPI Disclosed

Mar 24, 2016

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

Apr 25, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Sep 30, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jun 15, 2016
Signed : Jun 27, 2016
Invested : Dec 9, 2016

Sector

Commercial Banking - General

Project Description

The Project involves a senior loan of up to US$100 million and a line under the Global Trade Finance Program (GTFP) to Arab African International Bank (AAIB or the Bank) to target medium enterprises and Sustainable Energy Finance (the Project).
AAIB is one of the top five banks operating in Egypt with total assets of US$13 billion as of 30 September 2015. The Bank was established in 1964 as a joint venture between the Egyptian General Institution for Banks in the United Arab Republic (replaced by the Central Bank of Egypt or CBE) and the Ministry of Finance and Industry of Kuwait represented by the Kuwait Investment Authority (KIA). AAIB is a commercial bank that provides financial services to both corporate and retail clients, and operates through a network of 83 branches.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
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

E&S Category Rationale / Risks and Mitigation

The proposed facility will target medium enterprises and Sustainable Energy Finance (SEF). The bank exposure under the medium enterprises will be mainly to medium risk sectors. The medium enterprises 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 Sustainability Policy. For this project the client will be required to screen the asset class of the medium enterprises 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.

AAIB adopted the Equator Principles in 2009, a framework that uses the IFC Performance Standards in assessing and managing environmental and social risk in project financing. AAIB is the process of developing its Environmental and Social Management System (ESMS) and has an assigned sustainability team. The main E&S issues of this investment relate to AAIB's capacity to manage environmental and social risks associated with its investments in line with the applicable requirements, which include the following: a) establishing an ESMS to screen loans to be supported from IFC's facility, b) designating staff members responsible for E&S issues and c) providing them with the necessary training for implementation of the ESMS. AAIB will also be required to develop, as part of its ESMS, an external communication mechanism allowing on receiving complaints regarding AAIB and its clients' E&S performance. AAIB is exempted from national Labor Law and Social Insurance Law. However, AAIB policies and procedures are in line with IFC Performance Standard 2 on Labor and Working Conditions.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Nominate officers		Completed
Establish SEMS		Completed
Staff Training		Overdue
Other1 Develop an external communication mechanism addressing E&S complaints		Completed

Contacts

For Inquiries About the Project, Contact

Ms. Nevine Sabbour
Assistant Managing Director
Head of Business Strategies & Finance Group
5 Midan Al-Saraya Al-Koubra, Garden City, Cairo, Egypt.
Telephone: +202 27924177
Fax: +202 27925455

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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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