37749 - ULI SME 2016

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Summary of Investment Information

Project Number

37749

Company Name

JOINT-STOCK COMPANY UZBEK LEASING INTERNATIONAL AO

Date SPI Disclosed

Aug 8, 2016

Country

Uzbekistan

Region

Central Asia and Turkiye

Projected Board Date

Sep 6, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Aug 26, 2021

Department

Regional Industry FIG MCT

Industry

Financial Markets

Previous Events

Approved : Feb 17, 2017
Signed : Apr 21, 2017
Invested : Jun 2, 2017

Sector

Leasing Services

Project Description

Joint Stock Company “Uzbek Leasing International A.O.” (ULI or the company) is the oldest and the second largest in term of new business in Y2015 leasing company in Uzbekistan. ULI is a universal leasing company, occupies 4.1% of Uzbek market and focuses mainly on SME segment.

ULI has been IFC’s repeat client since its foundation in 1996 when IFC invested in 15% of ULI’s capital. In 2002 and in 2008 IFC has committed two senior loans to ULI for a total of US$5.5 million (both were repaid on time) and provided an extensive advisory services package to the Company.

The project is to provide a 4-year US$5 million senior loan to Joint Stock Company “Uzbek Leasing International A.O.” to finance leasing operations with SMEs. At least 10% of the loan is earmarked for financing energy efficient leased equipment to SMEs in the country.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	5.0
Equity

Development Impact

- SME access to finance: the Project would provide financing to SMEs that would contribute to the creation of employment and sustainable private sector development.
- SME access to Energy Efficiency Loans: the Project would stimulate ULI to finance energy efficiency projects of its clients.
- Financial performance: IFC''s project would support improvement of ULI''s ROE, EROE.
Corporate Governance: IFC''s project would support ULI''s Risk Management System improvement.

E&S Category Rationale / Risks and Mitigation

The proposed project has been categorized as FI 2 according to the IFC's Sustainability Framework. The rational for categorization is based on assessment of current portfolio and business strategy of Uzbek Leasing. The company provides leases to SMEs predominantly concentrating in the sectors of construction, food processing, and services. Both, the current portfolio and the proposed lending include activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. According to the nature of activities supported with this loan, the client will be required to operate the Environmental and Social Management System to demonstrate ongoing compliance with IFC's Exclusion List, national E&S laws, as well as ensure ongoing compliance of its employment practices with IFC Performance Standard 2: Labor and Working Conditions and regular reporting of its E&S performance to IFC in accordance with the format to be provided.

The key risks and impacts of the project are associated with Uzbek Leasing's capacity to maintain the Environmental and Social Management System to efficiently identify and manage E&S risks associated with supporting small and medium sized enterprises. For the past projects with IFC Uzbek Leasing developed a satisfactory ESMS with all necessary tools and guidance materials; however, it has not been maintaining it. The E&S risk management is currently limited to checking availability of licenses and permits and excluding some activities from the company's scope of financing, as required by the company's statement of operating policies. The list of excluded activities is not fully in line with the IFC Exclusion List. For this project Uzbek Leasing will be required to reanimate its past ESMS or enhance the current operating policies to ensure it identifies and mitigates the E&S risks, screens its leases against the IFC Exclusion List and compliance with national E&S laws and regulations of Uzbekistan and has the corresponding records. The ESMS training shall be carried out for staff. The company will also need to maintain the related E&S due diligence forms to record the ESDD findings, and ensure E&S monitoring and internal reporting of E&S issues to the management.

Task Title & Description	Actual Due Date	Status
Nominate officers		Completed
Establish SEMS		Completed
Develop guidelines		Completed
Staff Training		Pending
Other1 Submit ESMS implementation report	03/31/2017	Completed
Other2 Develope internal Grievance mechanism	12/31/2016	Completed
Other3 Carry out regular fire safety training for employees.	12/31/2016	Completed

Contacts

For Inquiries About the Project, Contact

Zafar Mustafaev, CEO
Joint Stock Company “Uzbek Leasing International A.O.”
1 Beshyogoch Street Tashkent
100066 Uzbekistan

For Inquiries and Comments About IFC, Contact

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2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

Local Access of Project Documentation

Joint Stock Company “Uzbek Leasing International A.O.”
1 Beshyogoch Street Tashkent
100066 Uzbekistan

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:

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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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