47720 - ABSA AMSA Trade Finance II

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Summary of Investment Information

Project Number

47720

Company Name

ARCELORMITTAL SOUTH AFRICA

Date SPI Disclosed

Jun 22, 2023

Country

South Africa

Region

Africa

Projected Board Date

Jul 24, 2023

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Nov 19, 2025

Department

Regional Industry - MAS Africa

Industry

Manufacturing

Previous Events

Approved : Dec 15, 2022
Signed : Jul 25, 2023

Sector

Iron and Steel

Project Description

The proposed Project with Absa Bank Limited (“Absa” or the “Bank”) is a) an up to ZAR2bln (equivalent to US$112mln); and b) an up to USD40mln working capital support to eligible suppliers of a large manufacturing company (the “Company”).

The Project falls under the Global Supply Chain Finance (GSCF) Program, a supply chain finance program launched by the International Finance Corporation (IFC) in December 2022. The GSCF supports open account trade in the emerging markets by providing funded or unfunded risk participation in partner banks’ facilities.

The project is part of a crisis response initiative, through which IFC plays a countercyclical role when the markets experience the turbulence due to the negative economic impacts of the ongoing global food and energy crisis.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	0.0
Loan	3115.0
Equity

Development Impact

IFC's additionality is driven largely by its countercyclical role when the markets experience the negative impact due to the crisis. Under the GSCF, IFC will provide funded or unfunded risk participation in partner banks’ facilities given: (i) IFC's track record of crisis response efforts; (ii) its network of partner banks that support global emerging markets; (iii) its set of programs aimed at investing both large scale and transactional financing for trade and supply chain finance in emerging markets; and (iv) its ability to support private sector beneficiaries to address liquidity constraints in response to the market shocks.

E&S Category Rationale / Risks and Mitigation

The Project will support short-term invoice discounts to South African suppliers of a large manufacturing company. Potential environmental and social risks associated with supply chain finance activities are typically associated with production of goods and commodities, supply chain management and reputational risks. These may include: child and forced labor, gender-based violence and harassment, occupational health & safety, wages, overtime, and overall safe and fair employment conditions, life and fire safety, protection including emergency response, emissions to air and water, hazardous materials, resource use efficiency and biodiversity risks. E&S risks could also derive from the Bank's ability to assess and manage supply chain risks of the Company to be supported under the Project. Overall, the E&S risks are expected to be of a medium nature and therefore, the Project is categorized as FI-2 according to IFC's Sustainability Policy. The Project will not support coal related activities, oil and gas, as well as higher-risk transactions 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. Further under the Project, Absa will be required to apply the IFC Exclusion List and the E&S laws in South Africa. Lastly, Absa meets labor and working conditions requirements in line with IFC Performance Standard 2 and IFC's Life and Fire Safety Standards for financial intermediaries (FIs) and will be required to continue meeting these requirements.

Contacts

For Inquiries About the Project, Contact

Absa Bank Ltd
Bankie Sebothoma
Trade Finance and International Banking Specialist
+27 76 029 5822
Bankie.Sebothoma@absa.africa
15 Alice Lane, Sandton, Gauteng, South Africa, 2196
www.absa.africa

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