37699 - CCFP BTMU-II

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Summary of Investment Information

Project Number

37699

Company Name

MUFG BANK, LTD.

Date SPI Disclosed

Mar 11, 2016

Country

World Region

Region

Global

Projected Board Date

Apr 21, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Sep 30, 2022

Department

Regional Industry - MAS Asia & Pac

Industry

Financial Markets

Previous Events

Signed : May 27, 2016

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The proposed project involves renewal of the existing unfunded risk sharing facility with BTMU for a trade and commodity finance portfolio of up to US$200 million (with IFC investment of up to US$100 million) aiming at supporting agri, energy and metal sectors (“Project”). The Project will enable BTMU to continue to fill the gap in financing the commodity trade that keeps critical food, energy and metal product supplies available in emerging markets, including IDA countries in Asia.

Sponsor / Cost / Location

Development Impact

The renewed CCFP-BTMU facility is expected to continue having the following development impacts: (i) increased access to finance for trade of critical agriculture, energy and metals trading flows especially during market turbulence; and (ii) demonstration impact on local market development, promoting commodities as an asset class, and encouraging local/reginal banks to participate in funding trade flows hence ultimately supporting growth, revenues and sustaining employment in respective commodity trading countries.

IFC''s risk participation will provide a guarantee to a portfolio originated by BTMU to continue and expand its trade finance in critical commodities as targeted by the CCFP, and will enable it to continue servicing demand volumes from emerging markets. IFC''s support would continue encouraging greater activity in IDA countries and also support smaller traders and processors.

E&S Category Rationale / Risks and Mitigation

The proposed project entails a renewal of existing unfunded risk sharing facility with BTMU (#32784) for finance of commodity trading of up to US$200 million (with IFC investment of up to US$100 million). The facility will support agribusiness commodities, energy and metals trading in the emerging markets of Asia. BTMU’s portfolio obligors handle palm oil, coffee, rice, cocoa, fertilizer, LPG, crude oil, refined oil, base metals, metallurgical raw materials and other products. The project is classified as Category FI-2 in accordance with IFC''s Environmental and Social Sustainability Policy. The underlying commodity trading will comply with IFC Exclusion List and portfolio eligibility criteria based on applicable country/commodity E&S risk matrix (GMAP) and counterparty assessments, as appropriate, which are associated with key E&S risks and impacts of agro-commodities production. Since the project will not have direct exposure to primary agro-commodity supply chain, it is therefore not subject to IFC’s supply chain requirements as outlined in the IFC’s Performance Standards.

The key E&S risks and impacts of the project derive from the E&S risks and impacts of agro-commodity production and handling (especially applicable to energy trading) of targeted agro-commodities/energy inputs, especially as it relates to harmful child/forced labor, biodiversity risks associated with conversion of natural and critical habitats, and/or safety and emergency preparedness (in the case energy inputs). As an existing client of IFC, BTMU has adopted an E&S risk screening procedure with designated E&S staffing to apply GMAP and counterparty assessment for the existing facility. Under this repeat project, BTMU will continue using GMAP and counterparty assessment, as appropriate, for proposing of agribusiness commodities. For the energy trading proposed, BTMU will be required to conduct obligor’s E&S due diligence. Any portfolio obligor to be supported under this project will require prior approval of IFC. Based on publically available information, BTMU, as a public listed Japanese bank, generally comply with IFC Performance Standard 2 requirements for Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Mr. Sim Chee Meng
Senior Vice President
Head of Commodity Trade Finance
ECA, Commodities & Trade Finance Department
The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
Tel: (65) 6231 1472 / Email: mailto:simcm@sg.mufg.jp
9 Ruffles Place, #01-01 Republic Plaza, Singapore 048619

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Local Access of Project Documentation

The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
9 Ruffles Place, #01-01 Republic Plaza, Singapore 048619

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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
Conduct GMAP and counterparty assessment, as appropriate, for agro-commodities portfolio obligors Conduct counterparty assessment for energy portfolio traders	03/15/2016

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