43117 - BBI IDA RSF

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Summary of Investment Information

Project Number

43117

Company Name

BMCE BANK INTERNATIONAL PLC

Date SPI Disclosed

Feb 25, 2021

Country

Africa Region

Region

Africa

Projected Board Date

Mar 28, 2021

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Dec 10, 2022

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Apr 28, 2021
Signed : Jun 25, 2021

Sector

Commercial Banking - Trade and Supply Chain

Additional Project Attributes

Blended Finance

Project Description

The proposed project, BBI IDA RSF is a funded and unfunded 50%-50% risk sharing facility with BMCE Bank International Plc (“BBI” or the “Bank”), a subsidiary of Bank of Africa (formerly BMCE Bank), on a portfolio of trade-related assets for up to US$150 million (the “Project”). The Project will provide BBI with funding and risk mitigation to finance importers and exporters of essential goods in emerging markets in Africa. IFC’s investment will also help BBI augment its trade finance delivery in certain key markets of its corporate strategy. The facility will initially have an availability period of 3 years with a run-off period of up to 6 months, while the underlying trade assets will have a maximum tenor of up to 12 months.

The project includes support from the International Development Association’s Private Sector Window Blended Finance Facility (IDA PSW BFF) as described below.

Associated Advisory Engagement

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	33.75
Loan	52.50
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 Corporates

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

Development Impact

The Project is expected to have the following development impact: (i) Increase in trade finance for EMIBs and underlying importers and exporters in Africa. Through the Project, BBI will increase its trade finance in those riskier markets and support the capacity of EMIBs to finance trade flows. (ii) Market resilience. By sustaining BBI's ability to provide trade finance services, despite COVID, IFC's facility is intended to promote the resilience of trade finance markets. In addition, it will contribute to the maintenance of financial stability by providing comfort to other market participants, beyond the project, that are under pressure to retreat from African markets during this economic crisis. In doing so, this project will help to protect the essential platform of myriad cross-border trade finance linkages.

IFC's additionality is largely derived from IFC's role in structuring an innovative solution to help infuse liquidity into the trade finance market. Through an effective risk mitigation instrument, IFC plays a critical role in supporting BBI's trade finance capacity and market reach in Africa, especially in riskier countries. IFC's financing structure enables BBI to mobilize capital at scale to extend exposure limits for EMIBs, support private sector clients to address liquidity constraints at a time of volatility and uncertainty in the market due to COVID-19 and expand market coverage in countries where, without the Project, BBI would remain constrained and won't meet clients' demand.

E&S Category Rationale / Risks and Mitigation

This Project will support short-term trade finance activities. The E&S risks and impacts associated with these activities are considered minimal and the project has therefore been classified as a category FI-3 project in accordance with 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 In addition, the participating banks, are required as part of the KYC process, to verify and exclude the following: (a) Trade in goods produced by companies known for exposures to unaddressed issues associated with involuntary resettlement/land acquisition; (b) Trade in goods produced by companies known for involvement in conversion or degradation of natural and/or critical habitats and/ or any activities in legally protected or internationally recognized areas; (c) Trade in goods of companies known for involvement in relocation, that have adverse impacts on the lands, natural resources, or critical cultural heritage subject to traditional ownership or under customary use by Indigenous Peoples; (d) Trade in goods of companies known for involvement in alteration, damage, or removal of any critical cultural heritage; (e) Trade in goods of companies known for causing environmental disaster in last 5 years. It will also not support any activities related to upstream oil & gas production and 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. The banks will also be required to exclude agricultural commodities with high E&S commodities-countries mix risk. The Bank will be required to develop a questionnaire, with the guidance from IFC, to be able to screen against the excluded activities. For EMIBs that are IFC existing clients, only those with satisfactory E&S performance will be able to participate. Based on the information in the PS2 questionnaire and documents provided, BBI’s labor and working conditions are in line with the requirements of PS2 on Labour and Working Conditions.”

Given the E&S risk nature of this project, development of a robust ESMS was not needed.

Contacts

For Inquiries About the Project, Contact

BMCE BANK INTERNATIONAL PLC

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