42253 - Continental CLII

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Summary of Investment Information

Project Number

42253

Company Name

BANCO CONTINENTAL S.A.E.C.A.

Date SPI Disclosed

Mar 26, 2019

Country

Paraguay

Region

Latin America and the Caribbean

Projected Board Date

Apr 26, 2019

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Jun 27, 2024

Department

Regional Industry - FIG LAC

Industry

Financial Markets

Previous Events

Approved : May 15, 2019
Signed : May 20, 2019
Invested : May 23, 2019

Sector

Commercial Banking - General

Project Description

The proposed investment consists of a senior loan to Banco Continental S.A.E.C.A (Continental or the Bank) for up to US$100 million to finance small and medium enterprises (SMEs) and agribusiness companies in Paraguay (the Project).

Associated Advisory Engagement

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	Loans to SME Borrowers
Straight Senior Loan	Agri Finance (Corp./Farmers/Climate)

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

Development Impact

E&S Category Rationale / Risks and Mitigation

The Project will target SMEs and agribusiness companies in Eastern Paraguay and has been classified as Category FI-2 according to the IFC's Sustainability Framework. Continental’s SME portfolio is composed mostly of short-term financing with environmental and social (“E&S”) risks of medium to low nature. The applicable requirements for the Project will include compliance with national laws and the IFC Exclusion List.

The main E&S risks and impacts related to the Project derive both from the Bank’s capacity to manage SME E&S risks as well as to maintain practices with regard to labor and working conditions. Although the Bank overall portfolio has exposure to potential high E&S risk activities such as cattle raising, the Project will focus on SMEs in Eastern Paraguay where the risks of deforestation are lower. The Bank is an existing IFC client and has satisfactorily implemented an environmental and social management system (“ESMS”) in line with IFC requirements, including tools to identify illegal deforestation. As part of the Project, Continental will be required to continue to: (i) apply the Exclusion List and local E&S regulations to the asset class portfolio, (ii) maintain its commitment to applying the labor standards established by the IFC Performance Standard 2 to its own workforce, and (iii) submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

Banco Continental S.A.E.C.A
Eduardo Cespedes
Chief Financial Officer
+595 21 627 4510
eduardo.cespedes@bancontinental.com.py
Avda. Mcal. Lopez & Gral. Garay – 5th floor, Asuncion, Paraguay
www.bancontinental.com.py

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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.

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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.

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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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