37978 - GTLP-SMBC

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Summary of Investment Information

Project Number

37978

Company Name

SUMITOMO MITSUI BANKING CORPORATION

Date SPI Disclosed

Feb 8, 2016

Country

World Region

Region

Global

Projected Board Date

Mar 11, 2016

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Mar 22, 2016
Signed : Mar 24, 2016
Invested : Mar 29, 2016

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The proposed project falls under the Global Trade Liquidity Program (“GTLP”), an innovative and well received trade finance program launched by the International Finance Corporation (“IFC”) in 2009. GTLP provides liquidity or guarantees to global or regional banks with large financial institution networks. Through GTLP, banks are able to grow their credit limits, manage risk, and support trade in the emerging markets.

The proposed project involves establishing a funded risk sharing facility (the “Facility”) with Sumitomo Mitsui Banking Corporation (“SMBC” or the “Bank”) for up to US$1.0 billion to share the risk on a portfolio of emerging market issuing banks.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	0.0
Loan	500.0
Equity

Development Impact

The Facility is expected to have the following development impacts:
- Increased access to finance: The project will increase access to finance for the Emerging Market importers and exporters. Improved availability of credit is expected to benefit producers and importers, including SMEs) along the value chain and therefore support growth, sustain employment, and encourage the generation of higher incomes.
- Strong demonstration effect through partnership with a major international bank and by mobilizing other program participants to support trade finance, the Project will have a strong demonstration effect by encouraging greater local/regional bank participation in EM trade finance which will increase access to finance for importers and exporters.

IFC''s additionality is largely derived from GTLP being an innovative exposure and capital management instrument: The Project will help SMBC manage/maintain/extend exposure limits for EMIB exposures contemplated by the Project, as well as optimize its capital usage. These factors are allowing for increased trade that the Project is targeting. At the moment, there is no other funded risk mitigation instrument that has the scope of GTLP that covers over 400 EMIBs with the primary purpose of supporting emerging market trade flow. In addition, the Project will also be supported by IFC mobilization.

E&S Category Rationale / Risks and Mitigation

This project has been classified as a category FI-3 project according to the IFC’s Sustainability Policy. The applicable requirements for the project include the IFC’s Exclusion List and other eligibility criteria as established by IFC. Each trade pool will be supported by underlying documentation with the designated bank, and the agreement with SMBC will specify that the underlying traded goods meet the above applicable requirements and will require the Bank to report on implementation. IFC will also review the details of the underlying trade transactions to confirm their compliance with IFC Exclusion List.

Contacts

For Inquiries About the Project, Contact

Philip Janoff ( mailto:Philip_Janoff@smbcgroup.com )
Jun Otsubo ( mailto:Jun_Otsubo@smbcgroup.com )
Global Trade Finance Department
Sumitomo Mitsui Banking Corporation
277 Park Avenue, New York, NY 10172

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Local Access of Project Documentation

Sumitomo Mitsui Banking Corporation
277 Park Avenue, New York, NY 10172

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