47313 - SanCh RSF II

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Summary of Investment Information

Project Number

47313

Company Name

Santander Chile RSF

Date SPI Disclosed

Jan 9, 2023

Country

Chile

Region

Latin America and the Caribbean

Projected Board Date

Dec 13, 2022

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Nov 19, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Dec 13, 2022
Signed : Dec 16, 2022

Sector

Commercial Banking - General

Project Description

The proposed investment is a 50-50% unfunded risk-sharing facility (RSF) with Banco Santander Chile (“Santander” or the “Bank”) on a portfolio of trade finance assets for up to US$300 million and an availability period of 3 years. As part of the Project, Santander Chile will retain at least 50% of the total portfolio exposure, while IFC will take the risk of the remaining 50% or up to US$150 million. The Project will provide Santander with a risk-mitigation tool which will allow the Bank to preserve capital for a portion of its trade-related assets. The total capital conserved per annum will be redeployed to generate up to US$150 million to finance climate related and small and medium enterprises (“SMEs”) portfolio.

Associated Advisory Engagement

Not applicable.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	300.0
Loan
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	Labeled: Green;Blue;Social-Loans/Bonds
Guarantee	Loans to SME Borrowers
Guarantee	Short/Medium Term Loans to Corporates
Guarantee	Loans to SME Borrowers

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

Development Impact

IFC’s additionality through the Project is financial. Financial additionality will be provided in the form of financing structure, as IFC’s participation in the Project will enable Santander Chile to redeploy its capital for a more efficient use while supporting its capacity to provide stable trade finance to exporters and importers. Without IFC’s investment, the Bank would not be able to optimize its capital usage, given that the proposed structure is not available in the Chilean capital markets. The proposed financing is a continuation of IFC’s strategic engagement with Santander Chile which started in December 2019 with a similar risk sharing facility. In addition to financial additionality, IFC helped strengthen Santander Chile’s technical capacity in classifying and reporting climate-related assets.

E&S Category Rationale / Risks and Mitigation

The proposed project consists of an unfunded RSF with Banco Santander Chile comprised of a trade-related assets, totaling up to US$300 million, that will allow Santander to redeploy capital to finance Sustainable Energy Finance (SEF)-related loans (for at least 75%) and SME's (25%). The potential E&S risks and impacts associated with the project are likely to have primarily medium E&S risks and High E&S risk sub projects will not be eligible. Therefore, the project was classified as FI-2 category, according to IFC's Sustainability Framework. Santander Chile's SME and trade portfolios E&S risks are mainly related to pollution prevention, resource efficiency and occupational health and safety in agricultural activities. As for the SEF pipeline, risks are associated to potential impacts during projects construction and operation such as impacts on biodiversity (wind), access to water (solar), affected communities and indigenous peoples. To manage and avoid these risks, in addition to maintain Santander Chile's ESMS, the Project will not support any activities with significant E&S impacts such as (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. Also excluded are hydropower subprojects and coal-related activities. Santander Chile will be required to apply to its trade and SMEs transactions the IFC Exclusion List and Chilean applicable E&S laws and regulations, and in the case of SEF subprojects also the Performance Standards as applicable.

Santander Chile is a subsidiary of the Santander Group and an IFC existing client. The group is an Equator Principles signatory and an existing IFC client with projects in Brazil, Mexico and Poland. Santander Chile ESMS is being strengthened through the implementation of an E&S risk assessment tool that includes: screening against E&S laws, company commitment to sustainability and E&S governance, sustainability reports, activities description and risk identification, external ESDD review and action plans. For the SME and trade portfolio, the Bank developed a questionnaire that is filled out by clients and validated internally. The form was included under the client's onboarding and credit renewal process. As per the form, sub clients declare and commit to operate under the applicable E&S Chilean laws and regulations including labor practices. The form is reviewed by the credit department. Based on the review, credit can decline or refer for further assessment. For the trade component, Santander procedures to screen projects against the Exclusion List are in place. For the SEF portfolio, assessment is performed through checklist (Santander Deal Team Sustainability Checklist) and ESDD through Performance Standards based questionnaire. For SEF, Santander also monitors project implementation including ESAP and legal requirements implementation. Santander will be required to: (1) maintain its ESMS; (2) remain committed to applying the labor standards established by the IFC Performance Standard 2; and, (3) submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

Santander Chile
Carmen De Maria Santos
Head of Capital Management

carmen.demaria@santander.cl
Bandera 140, 19th Floor
https://santandercl.gcs-web.com/

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