44042 - WCS Crisis Response Union Bank Nigeria Plc

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Summary of Investment Information

Project Number

44042

Company Name

UNION BANK OF NIGERIA PLC

Date SPI Disclosed

Nov 3, 2020

Country

Nigeria

Region

Africa

Projected Board Date

Nov 11, 2020

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Apr 6, 2024

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Nov 16, 2020
Signed : Dec 28, 2020
Invested : Jan 13, 2023

Sector

Commercial Banking - Trade and Supply Chain

Project Description

The proposed investment consists of a one-year, renewable unsecured senior loan of up to US$30 million to Union Bank of Nigeria PLC (“Union Bank” or “Bank”) under the FIG COVID-19 Emergency Response Working Capital Solutions Envelope (WCS Envelope). The WCS Envelope is designed to provide funding to existing IFC client banks in emerging markets that will then extend new trade-related or working capital loans to companies whose cash flows have been disrupted by the global outbreak of the coronavirus pandemic. The WCS facility will support Union Bank in increasing its lending to Small and Medium Enterprises (“SMEs”) particularly in the healthcare, food and trading sectors to allow them strengthen operations, maintain employment and access critical raw materials.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	30.0
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 MSME (mix of Micro and SME)

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

Development Impact

Additionality is driven by IFC's counter-cyclical role during crises, especially at a time when other lending institutions or investors' appetite may be subdued. Therefore, IFC's additionality arises from its unique ability to deploy at scale, in terms of volume as well as geographic reach, through its (i) successful experience in rapid crisis response; (ii) extensive client bank and partner networks; and (iii) set of programs aimed at investing both large scale, transactional liquidity and working capital in emerging markets.

E&S Category Rationale / Risks and Mitigation

The proposed investment entails a working capital solutions facility to Union Bank Nigeria to support the Bank in increasing its lending to SMEs. The key sectors in Union Bank’s SME portfolio include retail, oil and gas services, civil engineering, domestic trade, personal, plastics, and post-primary education. The Project portfolio is expected to have limited adverse environmental and social risks or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures; the project portfolio risk is considered medium. The Project has therefore been categorized as Category FI-2 according to IFC’s Environmental and Social Sustainability Policy. Given the use of proceeds, the Project will not support higher-risk transactions, that may include: a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on environment, community health and safety, biodiversity, cultural heritage, or d) significant Occupational Health and Safety risks. In addition, transactions involving coal mining, coal-related activities and upstream oil and gas activities will be excluded from the Project portfolio. As part of the project, Union Bank will be required to screen eligible transactions against the IFC Exclusion List and national E&S laws and regulations in Nigeria. In addition, the Bank will continue to comply with Life & Fire safety requirements and the requirements of IFC’s Performance Standard 2 on Labor and Working conditions.

The main E&S risks and impacts of this project relate to the ability of Union Bank to identify and manage the potential E&S risks and impacts associated with the SMEs supported under the Project portfolio.

Summary of Client Environmental and Social Management System (ESMS)

As an existing IFC client, Union Bank has designated staff with E&S responsibilities and has developed an E&S management system to identify and assess potential E&S risks and impacts related to its lending activities to SMEs. The Bank will continue retaining proper capacity, providing E&S training to the relevant staff involved in the ESMS implementation, including the E&S officer, and maintaining its commitment to manage HR and labor-related risks in compliance with the requirements of IFC Performance Standard 2 Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Union Bank of Nigeria PLC
Ini Obot Nelson
Relationship Manager, Financial Institutions
+234 1 2716800 Ext: 2465
ionelson@unionbankng.com
Stallion Plaza, 36 Marina, Lagos
www.unionbankng.com

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Fax: 202-974-4384

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

S/N	Name	Shareholding
1	Union Global Partners Limited	65.10%
2	Atlas Mara	25.58%
3	Other shareholders (with no individual shareholder holding more than 5%)	9.32%

Task Title & Description	Anticipated Completion Date
Training Program	02/20/2021

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