37259 - Ameria SubL II

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Summary of Investment Information

Project Number

37259

Company Name

AMERIABANK CJSC

Date SPI Disclosed

Aug 18, 2015

Country

Armenia

Region

Europe

Projected Board Date

Sep 22, 2015

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Feb 16, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 14, 2015
Signed : Dec 22, 2015
Invested : Dec 28, 2015

Sector

Commercial Banking - General

Project Description

The proposed project is an investment package for Ameriabank CJSC (the “Bank”) of a total size of up to US$50 million, which consists of an up to US$50 million 6-year subordinated loan for general purposes and an up to US$10 million 7-year senior loan for on-lending to MSMEs, on IFC’s own account.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	60.0
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
Quasi-Equity	Loans to SME Borrowers

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

Development Impact

Long-term partnership: By providing capital support to its key partner Bank in Armenia, IFC is better placed to help the Bank to sustain difficult economic conditions and to reach its strategic goal to become an attractive institution for investors, eventually gaining access to liquid and well regulated capital markets.

Long-term funding: By providing long-term funding which is scarce to find in the market now, IFC helps the Bank to grow its business and increase access to finance for Armenian customers

Environmental and social standards: IFC would help Ameriabank improve their capacity in the areas of environmental and social management

IFC providing long-term capital, which is currently challenging to raise on the market, would enhance Tier 2 capital of the Bank and provide additional resources to onlend, thereby contributing to increased access to finance for Bank''s customers and sustainable development of the Bank and expansion of its branch network. Further evolution of Ameriabank as one of Armenia''s largest banks is expected to contribute positively to development of competitive banking sector in the country and improvement of quality of banking services for Armenian businesses and retail customers. Ameriabank is perfectly positioned to be the consolidator for a fragmented banking sector and additional capital would help to realize M&A opportunities available on the market. IFC would provide an expertise in environmental and social requirements to enhance Bank''s systems.

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

The proposed project is an investment package of a total size up to US$50 million, which consists of a US$40-50 million 6-year subordinated loan and the case may be up to US$10 million 7-year senior loan to Ameriabank for SME financing. IFC’s investment will help the Bank to realize M&A opportunities available on the market to further grow and deliver more financial services to SMEs. Ameriabank’s portfolio is largely concentrated in the services, retail and wholesale trade and electric power production and distribution sectors and includes projects with limited exposure to business activities with potential significant adverse environmental and/or social impacts. The project has therefore been categorized as FI-2 in accordance with IFC’s Sustainability Framework

The key E&S risks and impacts of this project derive from the capacity of Ameriabank to identify and manage the potential environmental and social risks associated with its investments in line with the applicable requirements. Ameriabank has developed Environmental and Social Management System in line with IFC’s E&S requirements. The Bank has designated staff in place to implement the ESMS. The bank's human resources policies and practices are in line with the requirements of IFC's PS2 on Labor and Working Conditions. For this particular project, IFC's applicable requirements will be to ensure compliance with IFC Exclusion List, applicable environmental and social national laws and regulations, IFC Performance standards. In order to ensure effective ESMS implementation, Ameriabank will be required to enhance its ESMS by improving projects' assessment against IFC Performance standards and engaging qualified consultants for high risk projects, as well as develop and implement E&S training plan.

Contacts

For Inquiries About the Project, Contact

Ara Sargsyan
Head, Corporate Finance Unit
Investment Banking Department
Ameriabank cjsc
9 Grigor Lusavorich str. Yerevan 0015, Armenia Tel.: (+37410) 56 11 11Fax: (+37410) 51 31 33E-mail: Ara Sargsyan <mailto:ara.sargsyan@ameriabank.am>URL: ameriabank.am/

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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.

Task Title & Description	Anticipated Completion Date
Staff Training	10/30/2015
Enhance ESMS Procedure	10/30/2015

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