42890 - GWFP ETG SCB IV

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Summary of Investment Information

Project Number

42890

Company Name

ETC GROUP

Date SPI Disclosed

Jun 18, 2019

Country

Africa Region

Region

Africa

Projected Board Date

Jun 24, 2019

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Dec 8, 2023

Department

Regional Industry - MAS ME & Africa

Industry

Agribusiness and Forestry

Previous Events

Signed : Jul 30, 2019
Invested : Aug 30, 2019

Sector

Other

Project Description

The proposed project involves the second renewal of the existing syndicated funded risk sharing facility with Standard Chartered Bank (the “Bank” or “SCB”) for a trade finance facility of US$250 million to support ETC Group (“ETG”) agri commodity trader’s import of fertilizers in Sub-Saharan Africa and export of cash and food grains, storage. IFC’s investment amount will be up to US$10 million.

The Project will support the import, storage and sales of fertilizers in SSA countries such as Benin, Kenya, Tanzania, Mozambique, Ivory Coast, and export of agri commodities. Commodities financed by the project are bought from mostly smallholder farmers in SSA and sold to wholesalers, cooperatives, NGOs and governments in various IDA countries and into the international market.

This project is linked to GWFP ETG SCB III https://disclosures.ifc.org/#/projectDetail/SII/42889

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

The renewed facility is expected to continue having the following development impacts: (i) support of commodity trade finance for importers/exporters in emerging markets; (ii) increased access to trade finance for critical commodities, especially in the agro-commodity sector in emerging market; and (ii) improved market integration by facilitating intra-regional and south-south trade for commodities and enhancing connectivity of real sector firms into value chains

E&S Category Rationale / Risks and Mitigation

This project has been categorized as an FI-2 in accordance with IFC's Environmental and Social Review Procedure. The proposed investment is a fully secured, syndicated secured commodity finance facility to Standard Chartered Bank (SCB) to support ETG’s export of cash and food grains, storage, and import of fertilizers. The environmental and social risks and impacts associated with these activities are considered limited and the overall project risk is thus considered medium. The identified applicable requirements for this project are the IFC Exclusion List, applicable E&S laws in the countries of import and export and the IFC Performance Standards. Based on the use of proceeds for the commodity trade finance, it is unlikely that the project will be involved in higher risk activities that may include: (a) involuntary resettlement; (b) potential 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 main E&S risks and impacts derive from the capacity of the obligor to identify and manage the potential environmental and social risks associated with its commodities and trade finance of various grains and fertilizers which typically have some medium level environmental risks - waste management, biodiversity loss, and disposal of hazardous materials and social risks primarily related to agro-commodities supply chain such as harmful child labor and forced labor. SCB has a well-established E&S policy and implementation procedures to mitigate E&S risks in its investments. The obligor has an E&S officer and Environmental and Social Management System (ESMS) outlining the procedures, responsibilities and tools for undertaking E&S issues associated with its business activities. As part of its supply chain risk management, the obligor has systems in place to eliminate harmful child labor and forced labor from its supply chain. SCB will be required to monitor the action plan for the obligor under the trade facility.

Contacts

For Inquiries About the Project, Contact

Standard Chartered Bank
Nicolas Langlois
Distribution
+65 6596 4121
nicolas.langlois@sc.com
Boulevard, Level 22 (018981) Singapore
https://www.sc.com/eng

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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.

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.

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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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