44172 - Rabo India

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Summary of Investment Information

Project Number

44172

Company Name

COOPERATIEVE RABOBANK U A

Date SPI Disclosed

May 28, 2021

Country

India

Region

South Asia

Projected Board Date

Jun 28, 2021

Environmental Category

FI-2 - Limited

Status

Hold

Last Updated Date

Mar 7, 2022

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 28, 2021

Sector

Commercial Banking - General

Project Description

The proposed investment consists of an A Loan of up to US$50 million with a tenor of up to 5 years to Coöperatieve Rabobank U. A, Mumbai Branch (“CRUA MB” or the “Branch”), the Indian branch of the Netherlands-based Coöperatieve Rabobank U. A (“Rabobank” or the “Bank”). The investment aims to support CRUA MB in its effort to expand its lending program to climate smart agriculture (“CSA”) and renewable energy (“RE”) projects, and contributing to bridging the unmet market needs for financing climate mitigation activities such as CSA and RE in the country (the “Project”).

Associated Advisory Engagement

IFC and CRUA MB are in discussions on IFC’s advisory services aiming to assist CRUA MB in strengthening its internal knowledge of selected agriculture value chain players in some geographies in India as well as the design of lending products needed to finance CSA solutions.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	50.0
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	Agri Finance (Corp./Farmers/Climate)
Straight Senior Loan	INFRA Projects (RE/Waste Management)

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

Development Impact

The most significant expected Project-level outcome is improved access to climate financing, specifically supporting RE and CSA projects. Beyond the Project, IFC anticipates that the investment, via demonstration and replication channels, will further contribute towards improved sustainability in the market, by supporting the development of CSA financing and reporting by financial institutions.

E&S Category Rationale / Risks and Mitigation

CRUA MB provides project finance, working capital and term loans to corporates in India. IFC project will support new financing to climate smart agriculture (animal productivity, efficient irrigation, prevention of post-harvest losses etc.,) and renewable energy (primarily solar power projects) of CRUA MB. The use of proceeds will be required to exclude higher risk activities that may include 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. Hence, the E&S risk of the proposed project is medium, and the project is categorized as FI-2 according to IFC's Policy on Environmental and Social Sustainability. The applicable performance requirements will be i) the IFC- FI Exclusion List; ii) the relevant national E&S laws and regulations; and iii) the IFC Performance Standards. The project will not support any coal-related activities

The key E&S risks and impacts derive from the bank's own capacity to identify and manage the potential environmental and social risks associated with the project and debt financing for its corporate clients. The typical risks and impacts will be related to site specific occupational health & safety, emergency response, waste-water discharge and air emissions, labour and community issues and potentially land and biodiversity impacts depending on the nature and location of the projects.

Summary of Client Environmental and Social Management System (ESMS)

At the group level, Rabobank has an existing sustainability policy, which is applied globally and includes a comprehensive exclusion list and set of core policies on environment, labour standards and human rights; theme and sector policies on land, indigenous people, biodiversity, animal welfare, forestry, livestock farming, fisheries, palm oil etc., (collectively 'sustainability policies'). Rabobank is also signatory to the Equator Principles. Accordingly, all project finance transactions are evaluated by external E&S consultants hired by the sub-borrowers and further reviewed by external consultants hired by Rabobank where Equator Principles apply. Corporate finance transactions are required to follow the sustainability policies. Rabobank has sustainability department which is involved in review of project and corporate loans and is empowered to reject proposals which do not meet its internal policies. This existing E&S risk review process and structure include screening, project categorization, due-diligence including additional expert review if needed, monitoring of the portfolio and use of external consultants for project finance due-diligence. The existing policy and procedures are aligned with the project's applicable performance E&S requirements and will be applied to the project as well. Rabobank also has an external communications mechanism to receive concerns related to projects financed by Rabobank. Rabobank HR policies and practices are generally in line with IFC PS-2 requirements. Relevant business staff at CRUA MB will be required to maintain the E&S review structure led by sustainability team at Rabobank group level that will allow to screen out higher risk transactions, and provide annual E&S report related to the portfolio supported by this IFC project.

Contacts

For Inquiries About the Project, Contact

Coöperatieve Rabobank U. A, Mumbai Branch
Swapnil Dhotre
Head of Treasury
+91 22 2481 7800
Swapnil.dhotre@rabobank.com
20F, Tower A, Penninsula Business Park, Lower Parel, Mumbai 400013, Maharashtra, India.
https://www.rabobank.com/

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