38504 - BBVA Leasing Mexico S.A

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Summary of Investment Information

Project Number

38504

Company Name

BBVA LEASING MÉXICO, S. A. DE C. V

Date SPI Disclosed

Oct 24, 2019

Country

Mexico

Region

Latin America and the Caribbean

Projected Board Date

Dec 18, 2019

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 12, 2021

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Dec 18, 2019
Signed : Apr 29, 2020
Invested : May 21, 2020

Sector

Leasing Services

Additional Project Attributes

Blended Finance

Project Description

IFC’s proposed investment involves a long-term senior loan of up to US$116.5 million to BBVA Leasing

México, S.A. de C.V. (BBVA Leasing or the Company) to provide leasing and green finance for SMEs in

Mexico. The Project is comprised of: (i) an up to US$58.0 million senior “A” loan for IFC’s own account; (ii) an up to US$15.0 million senior loan provided by IFC as the implementing entity for the Canada-IFC Blended Climate Finance Program (BCFP); and (iii) a trust loan of up to US$43.5 million from IFC acting in its capacity as the implementing entity for the Managed Co-Lending Portfolio Program (MCPP).

As indicated above, IFC as implementing entity of the BCFP is expected to provide US$15 million in the

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	70.0
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
Straight Senior Loan	Loans to SME Borrowers
Straight Senior Loan	Climate (not covered in any category)
Straight Senior Loan	Climate (not covered in any category)

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

Development Impact

IFC anticipates that the Project will increase access to finance for SMEs in Mexico by helping BBVA Leasing grow its outstanding lease portfolio as well as its outstanding portfolio of green leases. Beyond the Project level outcomes, IFC anticipates that the investment has the potential to promote greater market competitiveness and sustainability through the demonstration and replication channels. IFC expects that the launch of leasing products for SMEs by a credible brand such as BBVA Leasing will have strong demonstration effects that will encourage other players to develop similar products as well as promote the first widely publicized climate-smart leasing products in Mexico, helping to foster market transparency through the adoption of a reporting tool for climate-smart leasing.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of a senior financing package to support SMEs and Climate-Smart assets. SMEs includes auto, transport, IT and office equipment, and industrial equipment. Leasing of Climate-Smart assets include: water-use and energy efficiency equipment and systems, transportation (electric, hybrid, refrigeration) and solar panels. Relevant sectors of operations include manufacturing, construction, agribusiness and transport. Some of the portfolio supported through this project is expected to include business 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. As such, the project has been categorized as FI-2. For this project, the Company will be required to screen all leasing activities against the IFC Exclusion List, and host country laws and regulations.

The key E&S risks and impacts derive from the Company’s capacity to identify and manage the potential environmental and social risks associated with its SME and Climate-Smart leasing activities, including the safe operation and maintenance of leasing assets, particularly in the manufacturing, construction, agribusiness and transport sectors. The leasing activities supported within these sectors comprise of auto, transport, water irrigation, solar panels, IT and office equipment, and industrial equipment, among others. E&S risks on these types of projects typically include: occupational health and safety, pollution prevention, waste and wastewater management, labor and working conditions. The company is currently developing a management system to address these risks. As part of this project the Company will: (i) designate an E&S Officer; (ii) enhance its management system to screen transactions against the exclusion list and local regulations, (iii) train its employees on the E&S risk management system enhancements; and (iv) commit to meet IFC’s labor standards.

Contacts

For Inquiries About the Project, Contact

BBVA Leasing
Alejandro Olvera
Director of Leasing
+52 5621 4292
alejandroisr.olvera@bbva.com
Torre BBVA - Piso 24, Paseo de la Reforma 510, Ciudad de México
https://www.bbvaleasing.mx/

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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
Nominate officers	04/30/2020
Formalize procedures	06/30/2020
Staff Training	08/31/2020

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