47306 - ALD_Green

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Summary of Investment Information

Project Number

47306

Company Name

SOCIETE GENERALE SA

Date SPI Disclosed

Nov 18, 2022

Country

World Region

Region

Global

Projected Board Date

Dec 19, 2022

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Mar 1, 2023

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Dec 19, 2022
Signed : Feb 20, 2023
Invested : Feb 24, 2023

Sector

Leasing Services

Project Description

ALD S.A. (ALD), a subsidiary of Société Générale, is a global fleet management and long-term vehicle leasing service provider operating a fleet of above 1.7 million vehicles with operations in over 40 countries. IFC is proposing to invest up to US$400 million in the form of senior loans to support ALD in financing the green transition of its fleet across emerging market subsidiaries.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	400.0
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	Short/Medium Term Loans to Corporates
Straight Senior Loan	Short/Medium Term Loans to Corporates

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

Development Impact

i.) Significantly increase the number of green vehicles (GVs) in the targeted 8 emerging market (EM) countries, and thereby also increase the demand for electric vehicle infrastructure in these markets. ii.) Due to the environmental benefits of GVs, the Project is expected to contribute to a reduction in greenhouse gas (GHG) emissions in the 8 target EMs. iii.) The project will help prove the financial viability of GV leasing by demonstrating the business case of GV's lower total cost of ownership as compared to vehicles with internal combustion engines.

Financial: IFC is uniquely positioned to serve the specific funding needs in BRL and US Dollar amounting to up to US$400 million for a total of 8 emerging market (EM) countries. If not for IFC, such a financing package would likely require multiple transactions with regional FIs which in turn would increase operational costs and complexity and thereby lower the feasibility of such an expansion. The financing will be conducted using a bespoke structure not achievable in the bond market. Non-financial: IFC will support the ALD EM subsidiaries to align their impact reporting practices with IFC standards and thereby promote best practices across the EM subsidiaries.

E&S Category Rationale / Risks and Mitigation

The project will support conversion of ALD fleets to electrical and hybrid vehicles consisting of cars and commercial vans. The environmental and social risks and impacts associated with leasing activities of cars and light commercial vans are expected to be low to medium, therefore the project has been categorized as FI-2 in accordance with IFC's Sustainability Policy. 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. IFC's applicable E&S requirements for this project will include the IFC Exclusion List and applicable host country laws and regulations. The key E&S risks and impacts of the project derive from the client's capacity to maintain its management system to identify and manage the potential environmental and social risks associated with its car leasing activities. These risks are typically associated with occupational health and safety issues, pollution prevention, waste and wastewater management, labor and working conditions, and supply chain issues. ALD is aligned with IFC's labor standards under PS2: Labor and Working Conditions. As part of the project, the company will be required to: (i) maintain its E&S policies and procedures; (ii) remain committed to applying the labor standards established by the IFC Performance Standards; and (iii) submit a periodic report to IFC.

Developed by cross-functional working groups, ALD E&S policies are approved by Societe Generale (SG) General Management and implemented within ALD. The policies spell out the main E&S issues and risks, identify the international standards of reference, and provide a framework for analysis, which is used in customer evaluations and resulting transactions. These include a responsible purchasing policy applicable to all ALD entities and applies a purchasing-related environmental and social risk map to assess risks intrinsic to its purchasing categories, covering ethics and fair practice, the environment, human rights and social conditions. As part of ALD's KYC, tier 1 suppliers are assessed against Societe Generale and international standards, including environmental and social issues. A related contractual clause is incorporated in contract templates. E&S procedures are implemented by a team of local CSR managers and compliance officers.

Contacts

For Inquiries About the Project, Contact

ALD S.A.
Didier Harnois
Group Treasurer
+352 3105 3607
didier.harnois@aldautomotive.com
L-8010 Strassen LUXEMBOURG
https://www.aldautomotive.com

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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.

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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.

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