44231 - WCS COVID AMRET

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Summary of Investment Information

Project Number

44231

Company Name

AMRET PLC

Date SPI Disclosed

Jun 19, 2020

Country

Cambodia

Region

East Asia and the Pacific

Projected Board Date

Jun 29, 2020

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Nov 29, 2023

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 26, 2020
Signed : Jun 30, 2020
Invested : Jul 24, 2020

Sector

Commercial Banking - Trade and Supply Chain

Additional Project Attributes

Blended Finance

Project Description

The proposed project entails an IFC investment of up to US$50 million in a senior loan, consisting of an up to US$25 million IFC A Loan and an up to US$25 million B Loan to Amret Plc. (“Amret” or “the Company”) with at least 30 percent of the loans expected to be used on women and women-owned micro, small, and medium enterprises (MSMEs) in Cambodia. The investment aims to support the Company’s working capital lending program to Cambodian MSMEs that have been impacted by Covid-19 (the Project), particularly those in the garments, tourism and construction sectors, and will be supported by an IDA Private Sector Window (PSW) Blended Finance Facility.

Associated Advisory Engagement

Sponsor / Cost / Location

IFC as implementing entity of the IDA Private Sector Window (PSW) Blended Finance Facility is expected to support working capital loans in PSW eligible countries under the WCS Facility with a first loss guarantee of up to US$215 million (“blended concessional finance co-investment”). Without the de-risking provided by IDA PSW, IFC will be limited in its ability to support Working Capital loans in IDA PSW countries given the increased demand for financing and the high risk in IDA PSW countries. This support is targeted in the context of responding and helping with the resilience measures around COVID-19 crisis. The level of concessionality provided to the WCS Facility by the blended concessional finance co-investment is estimated to be approximately 3% of the total PSW eligible facility size, which will be up to US$860 million. This estimate is based on the difference between (i) a “reference price” (either a market price if available; the price calculated using IFC’s pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the “concessional price” being charged by the blended concessional finance co-investment. In addition, the Project is expected to be supported by Global SME Finance Facility (“GSMEF”)] in the form of a performance-based incentive (“PBI”) of up to 0.2% of the total project cost of US$50 million to incentivize on-lending of the proposed working capital loans to women and women-owned/women-led enterprises. The estimated subsidy provided by GSMEF assumes that the Project will fully reach the agreed impact and shall only be paid out upon achievement of the pre-defined gender target. GSMEF is a partnership between IFC and other multilateral and bilateral partners, including the United Kingdom's Department for International Development and the Netherlands Ministry of Foreign Affairs, to help expand financing to SMEs on a sustainable basis. Further details and historical information on estimated subsidy levels in IFC’s blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFC’s blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017. Further information on these Enhanced Principles and IFC’s blended finance approach and governance can also be found at: www.ifc.org/blendedfinance. To support this increase in trade volumes at this most critical time, IFC is starting this support through existing clients while remaining open to engaging with other eligible financial institutions providing working capital in emerging markets.”

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	25.0
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

(i) Project Outcome: The project provides access to finance and liquidity to relevant stakeholders (Amret, and through them, their customers). This will support stakeholders' capacity to sustain operations and to expedite post-crisis recovery (ii) Market Creation: Microfinance institutions (MFIs) provide working capital to support their customers' operating cash flow. By sustaining MFIs' ability to provide these services, IFC's facility is intended to promote the resilience of financial markets, as well as broader stability that comes about by providing for the going concern of market participants in Cambodia. IFC expects the Facility to attract additional private sector investors and partners to support emerging market liquidity, strengthening the market's ability to absorb shocks imposed by the current crisis.

Additionality is driven by IFC's counter-cyclical role during crises and arises from its unique ability to deploy at scale in terms of volume and geographic reach with its (i) successful experience in rapid crisis response; (ii) extensive client and partner networks; and (iii) set of programs aimed at investing large scale, transactional liquidity and working capital in emerging markets. Under the B1 loan structure for Amret, IFC aims to mobilize additional funding of up to [US$25] million for other like-minded lender to provide Amret with the needed working capital in response to COVID-19.

E&S Category Rationale / Risks and Mitigation

The Project will support Amret in increasing its lending to MSMEs in Cambodia through short-term working capital loans under the COVID-19 facility. Amret is a microfinance institute operating in Cambodia. The Project has been categorized as FI-3 in accordance with IFC Sustainability Policy as the purpose of the proposed investment is to support Amret’s operations which have low environmental & social (E&S) risks. The Project will not support coal-related activities and higher risk business 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. The applicable performance requirements will include the IFC Exclusion List and applicable national E&S laws and regulations. Amret will be required to continue to implement its E&S Management System. Amret’s own Human Resources practices are in line with the objectives of IFC Performance Standard 2 Labor and Working Conditions. No Environmental & Social Action Plan is required.

Contacts

For Inquiries About the Project, Contact

Amret Plc.
Dos Dinn
Chief Executive Officer
+855 023 880 942
dinn.dos@amret.com.kh
80, St.315, 7 Village, Boeng Kak 2 Commune, Toul Kouk District, Phnom Penh
https://amret.com.kh/

For Inquiries and Comments About IFC, Contact

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IFC Communications
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Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

International Finance Corporation

11th Floor, Exchange Square,
19&20, Street 106,
Phnom Penh
Tel: (+855) 23 263 200

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.

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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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