37669 - DCGCapitalMarket

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Summary of Investment Information

Project Number

37669

Company Name

DRAGON CAPITAL GROUP LIMITED

Date SPI Disclosed

Mar 29, 2016

Country

Viet Nam

Region

East Asia and the Pacific

Projected Board Date

May 13, 2016

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Dec 23, 2021

Department

Regional Industry - FIG Asia & Pac

Industry

Funds

Previous Events

Approved : May 13, 2016
Signed : May 18, 2016
Invested : Aug 5, 2016

Sector

Fund Management Company

Project Description

The proposed project involves financing of up to US$50 million to Dragon Capital Group (“DCG”), a holding company for the Dragon Capital group of companies, with total assets of US$233 million as of December 2015, and its subsidiary Vietnam Debt Fund SPC (“VDeF”) and collectively with DCG, the “Company”). The Company will use the funds to invest in bonds issued by medium to large Vietnamese companies. It would target the private and privatized, listed and unlisted, fast growing companies in need of financing to expand or refinancing situations. The proposed project targets to expand the width and depth of the corporate bond markets in Vietnam, to broaden the investor base of the Vietnamese bond markets, and to support and provide Vietnamese private sector companies with better access to capital.

Sponsor / Cost / Location

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

Development Impact

E&S Category Rationale / Risks and Mitigation

The Project will support development and deepening of the Vietnamese corporate bond market through bond purchases, primarily involving new issuances and possibly a limited number of secondary market transaction, of companies operating in a variety of sectors in Vietnam. The key E&S risks of this project are related to those of the companies exposed to serious E&S challenges, in particular, those associated with medium and high E&S risks sectors of the Vietnamese economy. Since the exposure to high risk sectors is likely to be sizable, the project has been categorized as FI-1 in accordance with IFC’s Environmental and Social Sustainability Policy. For this project, the client will be required to screen loans against the IFC Exclusion List extended by additional “no-go” activities, the national E&S laws and regulations, and the objectives of the IFC Performance Standards.

The main risk of this project, in additional to sectoral focus, is associated with the limited leverage to assess and influence the bond issuers to mitigate E&S risks. The uniqueness of E&S risk management efforts in capital market investments in fixed income instruments pertains to proper selection of assets upfront. In general, the Fund manager will not have bilateral relationships with project sponsors of assets to be supported through bond issuances. Therefore, the Fund manager will neither have the ability to require any specific E&S performance improvements nor be in a position to conduct assessment of E&S risks at the asset level. The Fund manager will have access to information provided by bond issuers to all investors - the offering circulars specifically disclose information for the investors to use in their purchase. The E&S due diligence process to be conducted by the Fund manager will be based on verifying publicly available information, in addition to information provided in circulars and finalized by applying special filters such as excluded activities and consistency with the key objectives of the Performance Standards. DCG has developed and implemented an Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S risk management in compliance with the applicable performance requirements. The key potential impacts, which the DCG's ESMS is designed to identify and avoid include among others poor labor practices; health and safety; significant pollution incidents; life and fire safety; large scale physical resettlement; commercial logging in primary moist forest, and harvesting of wild fish populations; impacts on Indigenous Peoples and cultural heritage. The ESMS will screen projects to establish the E&S performance of the investee company using a checklist aligned to the Performance Standards.

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Establish SEMS		Completed	ESMS document provided to IFC	05/02/2016

Contacts

For Inquiries About the Project, Contact

Representative Office
Dragon Capital Group Limited
1501 Me Linh Point, 2 Ngo Duc Ke, District 1
Ho Chi Minh City, Vietnam
Mr. Pham Nguyen Vinh, Director - Corporate Communication
Mr. Dan Svensson, Director - Fixed Income
Telephone: +84 8 3823 9355
Fax: +84 8 3823 9366

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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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