46166 - Project Autumn

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Summary of Investment Information

Project Number

46166

Company Name

EQUITY GROUP HOLDINGS PLC

Date SPI Disclosed

May 11, 2022

Country

Kenya

Region

Africa

Projected Board Date

Dec 21, 2021

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Oct 8, 2023

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Dec 21, 2021
Signed : Dec 24, 2021
Invested : Jan 26, 2022

Sector

Commercial Banking - General

Project Description

The proposed project is an equity investment in Equity Group Holdings Plc (EGH, Equity Group or the Group), a leading banking group in Eastern and Central Africa. The investment includes mobilization from the IFC Financial Institutions Growth Fund, managed by IFC’s Asset Management Company.

Associated Advisory Engagement

N/A

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	84.05

Development Impact

IFC's additionality in this Project is both financial and non-financial. Financial additionality includes: (i) own account equity; and (ii) resource mobilization. Non-financial additionality includes: (i) non-commercial risk mitigation/trusted partnerships; and (ii) standard setting. Financial Additionality Own Account Equity: IFC will invest equity in a systemic player in the Central and Eastern African financial systems. Resource Mobilization: Through the proposed investment, IFC will mobilize commercial financing from institutional and private sources via the AMC-managed IFC Financial Institutions Growth Fund ("IFC FIG Fund”). Non-Financial Additionality: This Project is part of a broader funding package to EGH and builds on IFC's longstanding relationship with the Group. Standard Setting: This Project will support EGH in adopting IFC's approach to greening financial institutions. IFC will help EGH increase climate lending and maintain at zero exposure to coal.

E&S Category Rationale / Risks and Mitigation

This equity investment project in EGH is classified as Category FI-1, according to the IFC's Sustainability Policy. EGH has a wide range of activities through its banking and non-banking subsidiaries. The E&S risks are mainly associated with its banking activities. The banking subsidiaries in Kenya and DRC have some exposures to corporate loans and to business activities with potential adverse environmental and social risks, including oil and gas (though not upstream activities), construction and real estate development, and mining and quarrying. EGH portfolio does not include any coal-related activities. For this project, EGH will be required to apply the IFC Exclusion List, host country Environmental and Social laws and regulations and the IFC Performance Standards (where applicable). EGH will also be required to implement IFC's approach to greening equity investments in financial institutions. In addition, EGH will be required to meet Life & Fire safety requirements and the requirements of IFC's Performance Standard 2 on Labor and Working conditions.

IFC will periodically disclose the names, locations and sectors for Category A sub-projects that have been supported by IFC investments through financial intermediaries, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of July 1, 2020.

IFC will periodically disclose the names, locations and sectors for qualifying sub-projects that have been supported 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.

The key risks and impacts of the project derive from Equity Group's capacity to maintain its management system to identify and manage the potential environmental and social risks of the Group's portfolio. These risks are typically associated with occupational health and safety issues, pollution prevention, waste and wastewater management, labor and working conditions issues, biodiversity, and community impacts, among others. EGH has an E&S risk management policy covering the Group's banking activities. The policy includes requirements to meet the IFC exclusion list, national laws and regulations, and IFC Performance Standards. Both Equity Bank Kenya and Equity BCDC, the Group's largest subsidiaries, have E&S risk management systems in line with IFC's requirements and the Group's Policy. The systems provide details for the roles and responsibilities, applicable requirements based on the nature of the investment, and procedures for E&S due diligence and monitoring. EGH has E&S teams both at EBK and Equity BCDC levels. The Group will be required to implement similar procedures for and build E&S risk management capacity of its smaller subsidiaries. EGH HR policies and procedures are largely aligned with IFC's labor standards under PS2: Labor and Working Conditions. IFC will work with EGH to design a training plan and support a training program and transfer of knowledge to further build capacity in the subsidiaries outside of Kenya and DRC. Financial Intermediary Sub-Project Disclosure IFC will periodically disclose the names, locations and sectors for qualifying sub-projects that have been supported 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.

Contacts

For Inquiries About the Project, Contact

Equity Group Holdings PLC
Brent Malahay
Group Director, Strategy, Strategic Partnerships & Investor Relations
+254 763063000
brent.malahay@equitybank.co.ke
P.O. Box 75104-00200 Nairobi, Kenya.
www.equitygroupholdings.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.

Task Title & Description	Anticipated Completion Date
Assign E&S responsibilities for smaller subsidiaries	12/31/2021
Implement ESMS procedures within smaller subsidiaries	07/31/2022
Provide implementation report	01/31/2023
Prepare Staff ESMS Training Plan	07/31/2022
Implement staff training plan	01/31/2023

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