42008 - BG Housing

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Summary of Investment Information

Project Number

42008

Company Name

BANCO GENERAL S.A.

Date SPI Disclosed

May 6, 2019

Country

Panama

Region

Latin America and the Caribbean

Projected Board Date

Jun 7, 2019

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 29, 2024

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : Aug 9, 2019
Signed : Dec 12, 2019
Invested : Dec 18, 2019

Sector

Commercial Banking - Housing Finance

Project Description

The proposed project consists of a senior loan of up to US$200 million to Banco General, S.A. (the “Bank”) to be used to finance on-lending activity in Panama’s low and middle income mortgage sector and financing of climate smart sub-projects in solar power generation, green buildings and energy efficiency.

Associated Advisory Engagement

The project will be complemented with an advisory component to support the Bank in the development of green building financing through three main activities: i) analysis and diagnostic of the current status of green building financing in Panama, (ii) capacity building and market awareness on green buildings and the attached benefits for the Bank, developers and end clients; and iii) possible external client support, as applicable and as coordinated by the Bank, on EDGE green certification process.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	200.0
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	Housing Finance
Straight Senior Loan	Climate (not covered in any category)

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

Development Impact

The most significant expected project-level effect is increased access to housing finance for low and middle income households in Panama, and climate investment in the Panamanian market. Beyond the project-level effect, the proposed project will both promote inclusive home-ownership and financing of climate smart sub-projects in solar power generation, green buildings and energy efficiency.

E&S Category Rationale / Risks and Mitigation

The Project will support mortgages and climate smart sub-projects consisting of: (i) solar power generation with a maximum installed capacity of 25 MW; (ii) urban green building construction that meets IFC-approved green building or equivalent standards such as: IFC’s Excellence in Design (EDGE) certificate or projects with documented 20% energy savings compared to a baseline building without energy efficient design. Sub-projects under the green building asset class also include refinancing or financing of green mortgages that comply with the reduction requirements or certifications listed above; and (iii) energy efficiency (EE) sub-loans into fixed assets, equipment, appliances and lighting that are designed to reduce 15% of energy consumption from baseline or hold an eligible EE label. The overall risks of the activities supported under the asset class range from low to medium and exclude investing in high-risk projects such as those involving coal and: 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 will not be eligible. Therefore, the project has been classified as Category FI-2 according to the IFC's Sustainability Framework. For this project, Banco General will be required to assess the asset class sub-projects against the IFC Exclusion List and the national E&S laws and regulations of Panama.

The main E&S risks and impacts related to the climate smart sub-projects derive from Banco General’s capacity to manage E&S risks of such asset class. E&S risks on these types of projects typically include occupational health and safety issues for green building and solar projects in particular during the construction/installation phase. Additional risks include flooding, impacts to nearby communities and biodiversity risks depending on the sub-project and if applicable, site selection. Banco General is an existing client that has developed and implemented an environmental and social management system (ESMS), based on the IFC Exclusion List and Panamanian laws, that is satisfactory to manage the E&S risks of the activities supported under the IFC project. Responsibility for the ESMS lies with the Head of Risk and dedicated environmental and social staff. As part of the IFC loan, the Bank will: (i) continue to implement and improve its ESMS, where necessary; (ii) ensure continued E&S capacity to review all sub-projects under the asset class per the E&S laws and regulations of Panama; (iii) conduct environmental and social due diligence; and (iv) provide an annual E&S report to the IFC that includes the monitoring of sub- projects in the asset class.

Contacts

For Inquiries About the Project, Contact

Banco General, S.A.
Eugenia de Jimenez
VP Treasury and Investments
+507 303-7000

Torre Banco General, Aquilino De La Guardia Street
www.bgeneral.com

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Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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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:

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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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