41476 - GTLP SCB IV

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Summary of Investment Information

Project Number

41476

Company Name

Standard Chartered Bank

Date SPI Disclosed

Oct 31, 2019

Country

World Region

Region

Global

Projected Board Date

Dec 2, 2019

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jun 12, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 13, 2019
Signed : Dec 31, 2019
Invested : Feb 3, 2020

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The proposed project, GTLP SCB IV, falls under the Global Trade Liquidity Program (GTLP), an innovative and well-received trade finance program launched in 2009. GTLP has proven to be a highly effective means to channel financing to support Emerging Market (“EM”) trade flows. The program provides liquidity or guarantees thereby helping banks grow their credit limits, manage risk and support trade in EMs. The GTLP SCB IV project is comprised of two distinct projects to be managed separately, 1) a renewal of the existing funded GTLP SCB III facility (“Funded Project”) and 2) a new unfunded GTLP facility to capture SCB’s unfunded transactions in its trade finance asset book (“Unfunded Project”). This SII is for the Funded Project. The Funded Project will downsize the existing GTLP SCB III facility to a total of US$700 million (IFC investment of up to US$350 million) to match expected utilization levels.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	350.0
Equity

Development Impact

Increased access to finance: The Project will increase access to finance for Emerging Market importers and exporters. Improved availability of credit is expected to benefit local enterprises (producers and importers, including SMEs) along with value chain and, therefore, support growth, sustain employment and encourage the generation of higher incomes. Demonstration Effect: The Project will show other market participants the strength of an IFC partnership with a major international bank and Program Partners to support trade finance globally. The Project will have a strong demonstration effect by encouraging greater local/regional bank participation in Emerging Markets trade finance, thereby increasing access to such type of financing for local importers and exporters.

IFC's additionality is derived from its ability to enable SCB to continue implementing its refocused strategy and supporting EMIBs in Africa, Asia, and MENA, especially as many global banks are retrenching in EMs. IFC's additionality is also enhanced by engaging mobilization partners, which will allow SCB to maintain or expand trade credit in emerging market countries. SCB's ability to successfully implement its strategy and grow its trade finance market share in emerging markets at this volatile time through the GTLP SCB IV facility will underscore IFC's counter-cyclical role.

E&S Category Rationale / Risks and Mitigation

This Project will support short-term trade finance activities and therefore has been classified as a category FI-3 project according to the IFC’s Sustainability Policy. The trade finance activities supported by the Project will be required to meet the requirements of the IFC’s Exclusion List and other exclusions such as coal-related activities. The Project will not support any activities with significant E&S concerns such as (a) involuntary resettlement, (b) risk of adverse impacts on Indigenous Peoples, (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or (d) significant occupational health and safety risks. It will also not support any activities related to coal such as coal mining, coal transportation, coal-fired power plants, or infrastructure services exclusively dedicated to support any of these activities. IFC will have the ability to exclude or suspend from the program any EMIBs based on their E&S performances and ability to implement the above. Each trade pool will be supported by underlying documentation with the designated bank, and the agreement with SCB will specify that the underlying traded goods meet the IFC Exclusion List 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 and any other exclusions.

Contacts

For Inquiries About the Project, Contact

Standard Chartered Bank
Nicolas Langlois
Managing Director, Transaction Banking
+65 6596 4121
Nicolas.langlois@sc.com
8, Marina Boulevard, Level 22 (018981)
https://www.sc.com/en/

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