46623 - Localiza Flex

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Summary of Investment Information

Project Number

46623

Company Name

LOCALIZA RENT A CAR S.A.

Date SPI Disclosed

Nov 22, 2023

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Jun 16, 2023

Environmental Category

B - Limited

Status

Active

Last Updated Date

Nov 22, 2023

Department

Regional Industry MAS LAC & EUR

Industry

Manufacturing

Previous Events

Approved : Jun 16, 2023
Signed : Sep 29, 2023
Invested : Nov 17, 2023

Sector

Automotive and Light Vehicle

Project Description

The proposed IFC investment consists of up to US$200 million A-Loan to Localiza Rent a Car S.A. (“Localiza” or the “Company”), a regional leader in the vehicle rental business headquartered in Brazil with a presence in Latin America. The loan will partly support the Company’s 2023 capex plan, which consists of purchasing more efficient flex-fuel vehicles (biofuels-based) to renew and expand its existing fleet.

Associated Advisory Engagement

The Project will be complemented by an Upstream/Advisory initiative that supports Localiza in: (i) developing its decarbonization strategy, KPIs, and targets that would serve as input for its first Sustainability-Linked Loan; and (ii) developing a model to assess Localiza’s average fleet emission and impacts from key variables which will integrate emission intensity to its vehicle purchase decision-making process.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	200.90
Equity

Development Impact

IFC's financing will be structured with a variable spread, where the interest rate will be linked to the Company's performance in terms of developing a Sustainability-Linked Framework with KPIs and targets to be validated by Science-Based Targets Initiative, and further reducing GHG emissions driven by compliance with such climate-related KPI. This would be the first of its kind for Localiza. IFC will also support the diversification of Localiza's lender base, mostly local banks and local retail investors, supporting its road toward accessing international markets. Furthermore, IFC would help Localiza implement IFC’s E&S Performance Standards.

E&S Category Rationale / Risks and Mitigation

This is a Category B project according to IFC's Policy on Environment and Social Sustainability (2012).

Key E&S issues and risks identified during the appraisal are: (i) the Company's E&S management system, resources, and capacity; (ii) labour management, including terms of employment, gender, sexual harassment, and gender-based violence and harassment, fair and safe working conditions and management of occupational health and safety aspects; (iii) pollution prevention, Greenhouse Gases emissions, hazardous material and waste management from the maintenance of car fleets; (iv) car safety/fleet maintenance; (v) community safety/road assistance services; (vi) security services; (vii) life and fire safety.

Contacts

For Inquiries About the Project, Contact

Localiza Rent a Car S.A.
José Amilton dos S. Junior
Treasury Manager
+55 31 3247-9243
jose.amilton@localiza.com
Av. Bernardo de Vasconcellos, 377, Belo Horizonte, Minas Gerais, Brazil
https://ri.localiza.com/

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Fax: 202-974-4384

Local Access of Project Documentation

Av. Bernardo de Vasconcellos, 377, Belo Horizonte, Minas Gerais, Brazil

CEP 31150-900

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. Its purpose 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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