47369 - BOP Baobab

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Summary of Investment Information

Project Number

47369

Company Name

BAOBAB SAS

Date SPI Disclosed

May 18, 2023

Country

Africa Region

Region

Africa

Projected Board Date

Jun 20, 2023

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

May 5, 2024

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Invested : Aug 30, 2023

Sector

Commercial Banking - SME Finance

Additional Project Attributes

Blended Finance

Project Description

The proposed project is a multi-local-currency facility in the aggregate amount of up to US$47.5 million equiv. to affiliates of the Baobab Group (“Baobab” or the “Group”), an IFC partner with whom IFC has a longstanding relationship (the “Project”). The facility is to help the Group scale up lending to micro and small enterprises in the advent of Covid-19 in LIC-IDA and FCS countries in sub-Saharan Africa. The senior loans under the Project will benefit six Baobab affiliates, namely: Baobab Senegal, Baobab DRC, Baobab Burkina Faso, Baobab Mali, Baobab Madagascar and Baobab Cote d’Ivoire. Loans will have a maximum tenor of 60 months with a grace period of 12 months. The project will be processed under IFC’s COVID Base of Pyramid (“BOP”) Facility and will be supported by IDA-PSW Blended Finance Facility (“IDA PSW-BFF”) and IDA-PSW Local Currency Facility (“IDA PSW-LCF)

Associated Advisory Engagement

Sponsor / Cost / Location

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	Loans to Microfinance

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

Development Impact

The most significant expected project-level outcome is the expansion of access to finance for micro and small enterprises and women-owned micro and small enterprises to support economic activity and resilience in the aftermath of the COVID-19 crisis. Beyond the project outcome, IFC anticipates that the Project will support resilience amongst BOP finance providers catalyzing investments in the sector by demonstrating the viability of medium to long term financing to BoP providers and crowding in other sources of international and domestic finance in support of lending to SMEs, especially those operating in challenging Fragile and Conflict Situations (“FCS”) countries, impacted by COVID-19 and compounded by political unrests, and security issues.

E&S Category Rationale / Risks and Mitigation

The project will support on-lending to micro and small enterprises across six African subsidiaries of Baobab Group, namely Burkina Faso, Côte d'Ivoire, Democratic Republic of Congo, Madagascar, Mali and Senegal. The targeted portfolios are mainly exposed to sectors such as trade/commerce and services with overall limited environmental and social (E&S) risks. Therefore, the project has been categorized as FI-3 in accordance with IFC's Sustainability Policy. IFC's investment will not be used to support any coal-related activities or any higher-risk activities that may include: (a) involuntary resettlement; (b) potential 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. Baobab Group has developed an environmental and social management system (ESMS) that includes screening against a list of excluded activities, roles and responsibilities, and provides guidance for E&S categorization based on the sector and activity financed. As part of this project, the ESMS will be updated to include the IFC Exclusion List and the relevant national laws as applicable requirements. Baobab Group subsidiaries have assigned E&S Officers and will continue to enhance staff E&S capacity. An assessment of labor practices in relation to Performance Standard 2 and life and fire safety requirements revealed that some subsidiaries partially meet these requirements, therefore as part of this project, those entities will be required to strengthen their HR policies, including updating the employee grievance mechanism and life and fire safety practices.

Contacts

For Inquiries About the Project, Contact

Baobab Group
Christina REIFSCHNEIDER
Group CFO
+33 (0)1 85 73 19 00
creifschneider@baobabgroup.com
1 rue de Gramont, 75002 Paris, France
www.baobabgroup.com

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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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