44792 - SeABank Project

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Summary of Investment Information

Project Number

44792

Company Name

SOUTHEAST ASIA COMMERCIAL JOINT STOCK BANK

Date SPI Disclosed

May 20, 2021

Country

Viet Nam

Region

East Asia and the Pacific

Projected Board Date

Jun 21, 2021

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Oct 8, 2023

Department

CF4S4 - Regional Industry - FIG Asia & Pac/FIG Inv Ops East Asia & Pacific

Industry

Financial Markets

Previous Events

Approved : Jun 21, 2021
Signed : Jun 25, 2021
Invested : Aug 9, 2021

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The investment is in the form of a senior loan of up to US$130 million, consisting of (i) up to US$80 million IFC A Loan from its own account, and (ii) up to US$50 million B1 Loan and/or Parallel Loan including a green-shoe option to Southeast Asia Commercial Joint Stock Bank (“SeABank” or “the Bank”). The proceeds of IFC financing would be used to support the Bank grow its eligible climate-related projects, SME, women-owned SME, and retail portfolio. The project is expected to be supported by the Women Entrepreneurs Finance Initiative (We-Fi) as described in the Blended Finance Section.

In addition, IFC is considering to establish a trade finance guarantee facility for the Bank in the amount of US$20 million under the IFC Global Trade Finance Program (“GTFP”).

Associated Advisory Engagement

IFC and SeABank are in discussion on IFC’s advisory services to support SeABank in building up its internal expertise in gender financing, particularly the women-owned SME segment.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	80.0
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 SME Borrowers
Straight Senior Loan	Climate (not covered in any category)

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

Development Impact

The project will provide the Bank with the needed long-term funding to expand its lending to the climate and SME portfolio, support the improvement of maturity mismatch, and mobilize additional long-term funding from other lenders. The project will help the Bank adopt the internationally recognized green loan principles, while the potential advisory engagement will help the Bank build up its internal capacity and scale up its gender financing business.

E&S Category Rationale / Risks and Mitigation

The proposed project entails a loan facility to support SeABank's growth in SMEs and retail lending and development of climate financing. The project will also support short-term trade finance activities. SeABank is a commercial bank in Vietnam providing lending to individuals, SMEs and corporates. The SME sectors are mainly wholesale/retail trade, manufacturing, services, and construction and real estate. The climate financing to be developed by SeABank will focus mainly on green building, energy efficiency and rooftop solar projects. The key industrial activities of the SMEs and climate financing to be supported by the project entail limited adverse environmental and social (E&S) risks and potential impacts that are few in number, generally site-specific, largely reversible and can be readily addressed through mitigation measures. The E&S risks associated with the trade finance activities are considered low. 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. Therefore, the project has been categorized as a Category FI-2 project according to IFC Sustainability Policy. Applicable E&S performance requirements for the project for SME lending and climate financing will be IFC Exclusion List and relevant host country E&S laws and regulations. Applicable E&S performance requirements for the trade finance will be IFC Exclusion List and other exclusions deemed necessary.

The key risks and impacts of the project derive from SeABank's capacity and quality of environmental and social risk management system (ESMS) in place to identify and manage the potential E&S risks associated with the SMEs and climate projects supported under the project . These risks are typically related to occupational health and safety, pollution, waste and wastewater, labor and working conditions issues, among others.

IFC will periodically disclose the names, locations and sectors for Category A and/or other qualifying sub-projects that have been supported by this IFC investment through financial intermediaries, subject to regulatory constraints and market sensitivities. Any qualifying sub-project(s) will be disclosed during the annual reporting cycle established with the client. No sub-projects met the criteria for disclosure during the 2023 reporting cycle.

Currently the bank doesn't have the ESMS and E&S roles and responsibilities haven't been nominated yet. Under this project, SeAbank will be required to designate an E&S officer and establish an ESMS to allow screening, assessing and managing E&S risks of SMEs and climate financing against applicable E&S performance requirements. In addition, SeABank will be required to apply additional 'no-go' criteria for climate finance transactions to exclude any potentially higher E&S risks projects. For the trade finance under the project, IFC will review details of underlying trade transactions to confirm their compliance with IFC Exclusion List and any other exclusions. SeABank's labor practices are found generally in line with IFC Performance Standard 2 on Labor and Working Conditions.

Contacts

For Inquiries About the Project, Contact

Southeast Asia Commercial Joint Stock Bank
Mr. Nguyen Tuan Anh
Head of Risk
+ 84 24 3944 8688
anh.nt27@seabank.com.vn
25 Tran Hung Dao Street, Hoan Kiem, Hanoi, Vietnam
https://www.seabank.com.vn

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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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Task Title & Description	Anticipated Completion Date
Nominate E&S Officer	06/30/2021
E&S training	08/15/2021
Develop and implement ESMS	11/15/2021

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