46431 - DCM JKB Green Bond

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

46431

Company Name

JORDAN KUWAIT BANK

Date SPI Disclosed

Sep 8, 2022

Country

Jordan

Region

Middle East

Projected Board Date

Oct 20, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Apr 16, 2023

Department

CF5IS - Regional Industry FIG MCT/FIG MCT Investment Services

Industry

Financial Markets

Previous Events

Approved : Nov 10, 2022
Signed : Mar 12, 2023
Invested : Apr 13, 2023

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The proposed investment is for IFC to subscribe to up to US$ 50 Million in the first green bond to be issued by Jordan Kuwait Bank (the “Bank” or” JKB”) in Jordan covering the full issuance and up to US$ 40 Million GTFP trade line for up to one year (the “Project”). The investment will include an up to US$ 36 million investment from IFC’s own account and up to US$14 million co-investment through IFC Blended Finance participation by Canada-IFC Blended Climate Finance Program (BCFP) and MENA Private Sector Development (PSD) facilities as described in the Blended Finance Section. The bond proceeds will be used by the Bank to finance eligible green projects and assets in Jordan.

Associated Advisory Engagement

IFC targets to provide advisory support to the Bank in the following areas: (i) internal capacity development to help the Bank configure its processes, procedures and systems to be ready to support the implementation requirements of the green bond framework; (ii) green pipeline and product development to help the Bank increase its pool of eligible green assets; and (iii) market outreach and green branding. Furthermore, IFC’s Advisory Services (AS) will support JKB to develop green asset tracking and reporting framework which the JKB will be responsible for implementing and adhering to internationally recognized standards of annual reporting and disclosure required under the ICMA Green Bond Principles.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	36.0
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
Guarantee	Trade
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds

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

Development Impact

The Project is expected to have the following Development Impact: (a) Stakeholders’ effect – Increased Availability of Climate Finance: IFC will provide up to 5 years financing that will be leveraged by the Bank to grow its green portfolio which requires availability of longer-term capital. This will help in improving access to climate finance, contributing to the overall reduction in GHG emissions. IFC estimates that this investment will result in greenhouse gas reduction of approximately 31,376 tCO2e by 2027. As a reporting indicator, IFC will track the green-house gas emission reduction per year; and (b) Contribution to Market Creation - Sustainability: IFC anticipates that the Project will promote sustainability through the issuance of the first green bond in the country that will set standards for further such issuances and increase overall climate/green financing in Jordan. The Project is expected to establish and set the standards for green bonds in the market and hence encourage replication by other issuers. This is expected to mobilize incremental long-term resources for climate finance related projects and raise awareness among private sector companies of the merits of diversifying their financing sources and attracting capital markets financing to support green projects. As the first green bond in Jordan, the Project will set standards for the future issuances and introduce a new asset class to the local capital markets, which is expected to generate strong interest and pave the way for climate capital market transactions for a wide array of investors.

IFC’s expected additionality in this Project is both financial and non-financial. Financial additionality will be in the form of Innovative Financing Structure derived from the first green bond in the Jordanian market. IFC will also provide financial additionality in the form of Financing Structure by supporting a bond with up to five years maturity. Non-financial additionality would be provided in the form of Knowledge, Innovation and Capacity Building through product design, refinement of policies and procedures as well as training.

E&S Category Rationale / Risks and Mitigation

The Project consists of IFC investment of up to US$50 million in a green bond issuance by JKB, over a 5 year period, to finance activities promoting climate and environmental sustainability and up to US$ 40 Million GTFP trade line for up to one year. The eligible sub projects (SMEs and Corporate clients) to be included in the green portfolio will likely comprise equipment replacement to energy efficiency (EE) and /or with better environmental performance in different sectors (trade, agriculture, healthcare, manufacturing, utilities), green buildings, renewable energy projects - installation of solar PV panels and solar farms with maximum size of 1MW or lower. Potential E&S risks and impacts associated with the Project are likely to be low to medium, therefore this transaction has been categorized as FI-2 according to IFC's Sustainability Framework. The Project will not support IFC Exclusion List activities, wind farms, coal related activities, medium or large solar farm sub-projects above 1 MW, and higher risk business activities that may include: (i) involuntary resettlement, (ii) risk of adverse impacts on indigenous peoples, (iii) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage or (iv) significant occupational health and safety risks. As part of this Project, the Bank will be required to screen and assess eligible projects under the asset class against the IFC Exclusion List, national E&S laws and IFC's Performance Standards (PS) as applicable. In addition, the Bank will be required to be in line with Life and Fire Safety requirements and the requirements of IFC's PS2 on Labor and Working conditions.

The main E&S risks and impacts of this investment relate to the Bank having adequate systems and capacity in place to manage the operations being financed in accordance with applicable requirements. JKB's E&S risks linked to the green loan portfolio are mainly related to labor and occupational health and safety themes during subprojects' construction phases, including working conditions for migrant workers, waste management and community impacts. Additional risks include labor issues in sub-projects' supply chains. The Bank is a new IFC client and currently has no E&S capacity or ESMS in place. The Bank's HR Practices are in general in line with IFC's PS2 on Labor and Working conditions and as a part of this project the Bank will need to formalize grievance mechanism and sexual harassment policy for its employees. As part of the Project, the Bank will be required to: (1) develop and implement an ESMS including procedures to screen sub-projects against the applicable requirements including proper management of solar PV panels supply chain; (2) build proper internal/external capacity for proper ESMS implementation; (3) remain committed to applying the labor standards established by the IFC Performance Standards 2; and (4) train relevant staff and submit a periodic report to IFC. JKB will also be required to disclose supported climate related sub-projects of US$20 million equivalent or more, on a yearly basis - including names and locations.

Contacts

For Inquiries About the Project, Contact

Jordan Kuwait Bank
Mr. Haethum Buttikhi
CEO
+962 5629400
haethum@jkbank.com.jo
Amman - Al-Abdali- 62 Omaia Bin Abd Shams St.
https://www.jkb.com/

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
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
Nominate officers	10/03/2022
Establish SEMS	10/17/2022
Staff Training	10/17/2022
Grievance mechanism	10/17/2022
ESMS implementation records	04/15/2023

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Blended Finance

IFC's Investment as Approved by the Board

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Financial Intermediary Sub-Project Disclosure

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer