Mr. Guo YU and Mr. Ketao XIE are the Project Sponsors and founders of CEG, and serve as Co-Chairmen of the Company’s Board respectively. The Project Sponsors are dedicated and experienced educators having entered the sector in the 1990s. Mr. Yu holds a Master’s degree in Business and Economics from the Graduate School of Chinese Academy of Social Sciences. Mr. Xie holds a Master’s degree in Vocational and Technical Education at the East China Normal University.

 Total Project Cost is estimated to be US$370 million. IFC has been invited to provide up to US$30 million equivalent of equity and US$45 million straight senior loan to support the Project.

 The Project is located in Jiangxi and Guangdong provinces, China.

The investment has been classified as Category B according to IFC’s Policy on Social and Environmental Sustainability as adverse environmental and social risks and impacts arising from the projects are limited, generally site specific and could be addressed through the implementation of Good International Industry Practice (GIIP). Key issues and impacts identified during appraisal, discussed in more detail in the following paragraphs, include: E&S management system development and implementation in existing assets and future campuses; labor and working conditions including occupational health and safety during construction and operation; waste management; energy and water savings; and community health and safety including life and fire safety management associated with the public access buildings at project campuses.

E&S UPDATE RELATED TO ADDITIONAL INVESTMENT UNDER COVID-19 RESPONSE FACILITY:

E&S Performance and COVID-19 related Impacts:

The company’s E&S performance continues to be satisfactory aligned with GIIP and is materially compliant with applicable at-approval requirements under the active investment. This follow on investment, under the COVID-19 response facility, does not result in any new material E&S risks.  The company’s management of existing E&S risks and impacts continues as described in the ESRS disclosed on May 14, 2018. (https://disclosures.ifc.org/project-detail/ESRS/40453/china-edu-group )

The project doesn’t involve any new developments or construction for renovation; instead the proceeds will be utilized to: (i) modify educational areas to be used as nursing schools, (ii) e-learning (online) platform; (iii) hygiene/nursing class equipment, (iv)  specialized training for teachers, and (v) working capital.

Scope of IFC’s Appraisal: 

IFC’s virtual E&S due diligence for this follow-on investment, comprised meetings with the company’s senior management, HR manager, Campus Manager via video conferencing to understand the impact of COVID-19 pandemic on the company’s operations - particularly on its workforce.  IFC also reviewed related information and documents shared by the company and its own records of the company’s E&S performance since commitment, including HR policies and management, GBV&H, grievance mechanisms and COVID-19 response. Virtual site visits were completed to three campuses, including one recently constructed (Guangdong Baiyun University - new campus) and one acquired in 2019 (Haikou University). After COVID-19 related travel restrictions are removed, IFC will visit the client, as part of the regular portfolio monitoring activities. 

Response to COVID-19 Pandemic

Impact on Employment

CEG has confirmed that no staff lay-off due to the COVID 19 pandemic has been applied. The Company managed to keep salary and social benefits at the same level. Also, the Company is making payments to the suppliers and contractors as agreed. The Company has no migrant workers and workers accommodation facilities. 

Health Impact of COVID

The company is operating normally and had prepared a detailed pandemic response and operating process plan, with focus on “in-person campus learning”, that is consistent with the PRC government guidelines. CEG started school term in April 2021 at different stages/time in accordance with the requirements of the competent authorities of epidemic prevention and control. During the pandemic, online teaching virtual classrooms were set up for teachers and students. All CEG’s employees and students maintained normal operations through the online platform; CEG did not stop operations due to the COVID-19 crisis. 

The company’s board of directors meets on a regular basis to monitor the implementation of mitigation actions and to quickly decide on COVID-19 pandemic related actions. CEG has established a corporate  crisis committee to deal with the issue, with HR and OHS departments directly involved. Decision is centralized, but with the active participation of the campuses Emergency management plans were updated and adapted taking into account the local situation of COVID-19. COVID-19 prevention measures and procedures are consistent with the provisions under PS2 and PS4 Interim Advice for IFC Clients on Preventing and Managing Health Risks of COVID-19 in the Workplace.

As a part of this follow-on investment the company will ensure ongoing compliance with IFC Performance Standards – especially provisions under PS2: Labor and Working Conditions and PS4: Community Health Safety and Security.