45012 - BPL SL II

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Summary of Investment Information

Project Number

45012

Company Name

BUSINESS PARTNERS LIMITED

Date SPI Disclosed

May 27, 2021

Country

South Africa

Region

Africa

Projected Board Date

Jun 29, 2021

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Mar 8, 2022

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Jun 28, 2021
Signed : Jun 30, 2021
Invested : Feb 18, 2022

Sector

Finance Companies

Additional Project Attributes

Blended Finance

Project Description

The project consists of a 5-year senior (2-year grace period) secured loan of up to ZAR600 million to Business Partners Limited (“Business Partners” or the “Company”) to support the Company’s financing and development of certified green buildings in South Africa (the “Project”). Through this investment, IFC will also strengthen Business Partners’ long-term funding position.

Associated Advisory Engagement

IFC will provide a customized Advisory Service (“AS”) program that will deliver (i) green building capacity building for BPL staff, including on certification principles; (ii) support product development, communication, and marketing for BPL’s green building offering as well as impact reporting through the CAFI tool; and (iii) green building capacity building to BPL’s external construction stakeholders. The AS program will also be partially supported by the MAGC program.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	43.61
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	Climate (not covered in any category)

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

Development Impact

The expected Project-level outcome is: increased availability of climate finance (green buildings): The Project will help increase access to climate finance and support Business Partners in its strategy to fund and develop green building projects. Beyond the Project-level outcome, IFC anticipates that the Project will contribute to increased environmental sustainability in South Africa by demonstrating the viability of green building projects, including to small and medium enterprises. Combined with the other initiatives under IFC's programmatic approach to increase climate finance in South Africa, this is expected to raise the awareness of other financial institutions on the promotion and adoption of green building standards.

IFC's additionality under the proposed Project is expected to be both financial and non-financial. Financial additionality (financing structure): IFC will provide long-term local currency funding to Business Partners. While the loan itself will be used for green building finance lending, it also constitutes a stable funding source at a time when COVID-19 related funding volatility and additional costs related to refinancing and delays are manifest in the market. Non-financial additionality (knowledge, innovation and capacity building): IFC will explore supporting Business Partners with capacity building to identify, promote, and manage green building projects and to monitor and report on the green building portfolio.

E&S Category Rationale / Risks and Mitigation

This Project has been classified as a Category FI-2 project according to IFC’s Sustainability Policy. The proposed investment is a senior loan to Business Partners. The proceeds of the loan will support financing and development of certified green buildings in South Africa. The environmental and social (“E&S”) risks and impacts associated with these transactions are considered limited and can be managed through mitigation measures; the Project portfolio risk is thus considered ‘medium’. For this Project, the Company will be required to screen projects against the IFC Exclusion List, applicable national laws, and the IFC Performance Standards. The Project will not support coal-related activities or 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.

This summary is based on review of the 2023 AEPR submitted by Business Partners Ltd.

Business Partners Ltd (“BPL”) focus on supporting small and medium-sized businesses (SMEs) in South Africa and selected African countries. The company’s portfolio is considered medium risk.

In accordance with the requirements for financial intermediaries, BPL has developed and implemented an ESMS, including appointed E&S personnel responsible for its implementation activities within the company. The ESMS details the procedures for identifying, assessing E&S risks and mitigants, and managing the risks in investee companies. E&S due diligence has been integrated into the company's investment review process. During the reporting period, BPL shared three ESDDs, which were found to be adequate. BPL staff participated in training covering a range of E&S topics. No major E&S issues were raised in the report, and there were no reported incidents. Based on the information provided, the client’s E&S performance remains satisfactory; the client’s ESRR remains at 2 – Satisfactory.

S.no	Title	Anticipated Completion Date	Status
1	Staff Training	12/31/2021	Completed
4	Other1 - Revise ESMS	11/30/2021	Completed

Contacts

For Inquiries About the Project, Contact

Business Partners Ltd
Mark Paper
Chief Operating Officer
+27 11 713 6600
mpaper@businesspartners.co.za
Houghton Estate Johannesburg South Africa
www.businesspartners.co.za

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