41090 - DCM Gaucho GB

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Summary of Investment Information

Project Number

41090

Company Name

BANCO DE GALICIA Y BUENOS AIRES S.A

Date SPI Disclosed

Mar 22, 2018

Country

Argentina

Region

Latin America and the Caribbean

Projected Board Date

Mar 20, 2018

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jul 13, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Mar 20, 2018
Signed : Mar 23, 2018
Invested : Jun 21, 2018

Sector

Commercial Banking - General

Project Description

The proposed project (the “Project”) entails an IFC investment of up to US$100 million in a 7-year green bond to be issued by Banco de Galicia y Buenos Aires S.A. (“Galicia” or the "Bank"). The green bond proceeds will be used to finance sustainable energy finance (“SEF”) sub-projects in Argentina (the “Country”).

Founded in 1905, Galicia is the second largest private sector bank in Argentina, with a market share of 9.3% as of December 2017. The Bank operates one of the most extensive and diversified distribution networks in the Country, serving over 3.9 million clients, both individual and corporate. The Bank has a significant presence in both the retail and small and medium enterprise (“SME”) sectors, with a strong focus on agribusiness.

Associated Advisory Engagement

The Project will also include IFC Advisory Services (“AS”) to support the Bank in the identification and development of a SEF portfolio and pipeline (phase two of the SEF AS to Galicia, initiated in 2016).

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
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	Climate (not covered in any category)

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

Development Impact

Project Impact Assessment:

Stakeholders Effects: The Project will increase access to SEF, including for renewable energy ("RE"), energy efficiency ("EE"), water efficiency ("WE"), and green buildings ("GB") projects.
Environmental Effects: IFC estimates that growth in the Bank's climate-finance portfolio will result in a reduction of CO2 emissions.

Market Impact Assessment:

Sustainability: IFC expects that its investment will introduce and help demonstrate the viability of a new asset class that promotes sustainability (i.e. green bonds). The Project with Galicia, a systemic Argentine bank, shall provide visibility, raise awareness, and generate a demonstration effect of these instruments to other market players.

Product Innovation/Global Expertise: IFC will leverage its global expertise to help Galicia to launch a new financial product in the market, by structuring the first green bond issued by a financial institution in the Country.
Longer tenor funding: IFC will provide longer-term, stable funding which is critical for SEF projects, and not readily available in Argentina. The Project will also diversify the funding base of Galicia.
Stamp of Approval: IFC's engagement in the Project will boost Galicia's issuance success probability of attracting potential additional co-investors.
Long Term Partnership: By helping the Bank to structure this green bond, which is a newness in Argentina's financial market, the Project will strengthen the commitment and long-term partnership with Galicia, a strategic IFC client in the Country.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
CORE - E and S Management Systems (Y/N)	Compliance/Enhancement		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The Project consists of a green bond of up to US$100 million to foster Galicia’s climate smart portfolio. The sub projects to be supported are expected to have primarily medium E&S risks, and high E&S risk sub projects will not be eligible under this facility, therefore the Project was categorized as FI-2 according to IFC’s Sustainability Framework. As part of the Project, Galicia will be required to screen its climate smart sub-projects against the IFC Exclusion List, Argentinian E&S laws and regulations and the Performance Standards.

The key risks and impacts derive from the Bank’s capacity to identify and manage the potential E&S risks associated to sub-projects asset class in line with IFC requirements. Galicia’s portfolio risks are associated with renewable energy infrastructure development and related to potential impacts on biodiversity, affected communities and pollution related themes. The eligibility criteria excludes hydropower as well as Category A sub projects. As an existing client and an Equator Principle signatory, Galicia has an ESMS in place in line with IFC requirements, and allocated relevant resources to managing E&S risks, although it needs to develop additional capacity to identify and manage complex E&S risks. As part of the Project, the Bank will be required to implement a program of continuous ESMS improvement, including: (1) enhancing ESMS procedures focusing in higher E&S risks sub-projects; (2) capacity building to expand capacity to identify and manage more complex E&S risks and impacts; (3) remain committed to applying the labor standards established by the IFC Performance Standard; and (4) submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

Banco de Galicia y Buenos Aires S.A.
Carlos Lopez
Senior Vice President Financial Institutions
+54 11 63296133
carlos.e.lopez@bancogalicia.com.ar
Tte. Gral. Juan D. Perón 430, Buenos Aires, Argentina
http://www.bancogalicia.com

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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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Task Title & Description	Anticipated Completion Date
ESMS enhancement	04/06/2018
Provide continuous capacity building and expand the capacity of the team to manage complex E&S risks	10/03/2018

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