42562 - ENDA SL IV

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Summary of Investment Information

Project Number

42562

Company Name

ENDA TAMWEEL SA

Date SPI Disclosed

Oct 16, 2020

Country

Tunisia

Region

Africa

Projected Board Date

Nov 20, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Sep 30, 2022

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Dec 9, 2020
Signed : Jun 29, 2021
Invested : Jun 21, 2022

Sector

Microfinance and Small Business - Non Commercial Banking

Additional Project Attributes

Blended Finance

Project Description

The proposed Project ENDA SL IV consists of a blended concessional finance package from IFC to provide support to an existing client, ENDA Tamweel (“ENDA TAMWEEL SA”) (“Enda” or the “Company” or the “MFI”), in the form of a 5-year senior loan of up to EUR20 million in TND equivalent, to support the MFI develop its Sustainable Energy Financing (“SEF”) business line. All clients will be MSMEs. Enda is a long-standing partner of IFC, and this would be the 4th senior loan extended to the MFI since 2007.

Associated Advisory Engagement

Besides the Investment Project, a new AS project could potentially be signed with ENDA Tamweel in FY21 building on previous projects with the institution. The new project would support Enda Tamweel with their five-year strategy. The budget would be funded by the MENA MSME 2.0 umbrella, with Enda paying 50% of project costs in cash fees..

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	11.99
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)
Straight Senior Loan	Climate (not covered in any category)

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

Development Impact

Project Outcomes Stakeholders effects: Increased access to climate finance for MSMEs under (i) climate smart agriculture (CSA), (ii) waste recycling, and (iii) solar PV. Furthermore, the project is expected to offer support in the development of sustainable practices by ENDA's clients within the MSME segment, which is traditionally underserved, especially with respect to climate financing. The Project is expected to contribute to GHG emissions reduction in Tunisia. Contribution to Market Creation Sustainability: IFC anticipates that this investment will promote greater sustainability in the market by demonstrating to other lenders the viability of Climate Finance in Tunisia for solar PV, waste recycling, climate-smart agriculture products as well as EE projects.

- Financial additionality: Financing structure. IFC supports Enda with long-term funding and access to local currency through a swap in a context of tight liquidity conditions in the market and where microfinance institutions have no access to the Central Bank of Tunisia swap window (Tunis Re). - Non-financial additionality: Knowledge, Innovation and Capacity-building. IFC will help Enda develop a green financing strategy, define green assets accurately in line with a set of eligibility criteria for climate finance, and monitor the growth of the green portfolio as well as associated GHG emission reduction calculations. IFC will also help Enda improve its use of the ESMS to ensure compliance with E&S standards and management of affiliated risks.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2, in accordance to IFC’s Environmental and Social Sustainability Policy. The proposed project will support ENDA’s lending operations to Renewable Energy and Energy Efficiency (RE/EE) projects in Tunisia. Enda’s current overall portfolio, which includes mainly micro finance clients and some small SMEs includes variety of sectors such as agriculture, including livestock, clothing, food and beverage, trade, wholesale/retail, consumer goods, transport and construction. The majority of the eligible sub-projects on energy efficiency will be mainly related to equipment replacement in agriculture and other sectors while the RE projects may involve small-scale renewable energy generation in the solar photovoltaic. The portfolio supported through this project is expected to include business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures. For this project, ENDA Tamweel will be required to screen the eligible loans against the IFC Exclusion List and the environmental and social laws and regulations of Tunisia. The project will not support coal-related activities, hydropower projects and projects exposed to higher risk activities including: 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.

The key E&S risks and impacts derive from ENDA’s capacity to identify and manage the potential environmental and social risks associated with the eligible lending activities supported, as well as ENDA’s labor practices. The main E&S risks associated with the clients supported by this project include occupational health and safety, labor and working conditions, water use and emission.

Summary of Client Environmental and Social Management System (ESMS)

ENDA has appointed an E&S officer and developed an E&S risk Management System (ESMS) which includes screening against the IFC Exclusion List and applicable E&S laws in Tunisia. For this project, ENDA will need to provide E&S training to the entire staff to enhance its E&S capacity and effectively implement the ESMS in relation to the project portfolio. In regard to Performance Standard 2, ENDA’s labor and working conditions were found to be in line with the requirements of this Performance Standard.

Contacts

For Inquiries About the Project, Contact

ENDA TAMWEEL SA
Mohamed Zmandar
CEO
+21698767100
mohamed.zmandar@endatamweel.tn
Rue de l'Assistance, Cité El Khadra, Tunis, TUNIS, TUN, 1003
http://www.endatamweel.tn/

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Task Title & Description	Anticipated Completion Date
Develop an E&S Risk Management Training plan	11/19/2020
E&S Risk Management Training	03/19/2021
Implement ESMS and provide IFC with an ESMS implementation report	05/18/2021

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