47915 - DARP SA ADM 3

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Summary of Investment Information

Project Number

47915

Company Name

ADM ASLF III

Date SPI Disclosed

Jan 9, 2024

Country

East Asia and Pacific Region

Region

East Asia and the Pacific

Projected Board Date

Feb 16, 2024

Environmental Category

FI-2 - Limited

Status

Pending Signing

Last Updated Date

Sep 20, 2024

Department

Regional Industry - FIG Asia & Pac

Industry

other

Previous Events

Approved : Sep 18, 2024

Sector

other

Project Description

The proposed investment is an IFC investment as an anchor investor for the lower of US$60 million or 20% of the total commitments in ADM Asia Secured Lending Fund III LP (ASLF III – Elkhorn or the Fund), which will be established and managed by Asia Debt Management Hong Kong Limited (ADM Capital or the Sponsor) and provide debt financing to small and medium-sized enterprises (SMEs) in emerging Asia that have strong fundamentals but have limited access to traditional lending (the Project). ASLF III – Elkhorn is a successor fund to Asia Secured Lending Facility Ltd (ASLF I) in 2012 and ADM Capital Somei Lending Platform Ltd (ASLF II) in 2016, in both of which IFC was an anchor investor. The Fund aims to support the development of smart cities to enable a smooth transition to urbanization across emerging Asia, reducing strain on resources and supporting the delivery of more efficient, competitive, sustainable economies through technology and innovation.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	60.0

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
Fund	Funds

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

Development Impact

IFC’s own account equity: IFC will provide up to US$60 million or 20% of the total commitment of the Fund as an anchor investor Resource mobilization: IFC will play a key role in mobilizing financing from other investors in the Fund through its anchor investment, sending a strong signal to the market and boosting potential investors’ confidence in the Fund. Knowledge, innovation and capacity building: IFC will support ADM in improving its capacity and developing a framework to identify and build its green finance portfolio, such as renewable energy, energy efficiency, green buildings and other climate-eligible assets. Standard setting: IFC will support ADM in adhering to higher standards of implementing climate transition and physical risk assessments in line with Paris Alignment methodology. In addition, IFC will support ADM to develop its capacity to assess and integrate the nature-based risks, and have these publicly available to industry stakeholders including the potential investors in the form of TNFD reporting. Further, IFC will support ADM with establishing Paris-aligned GHG targets.

E&S Category Rationale / Risks and Mitigation

The proposed Project entails an IFC investment into ASLF III, which will be established by ADM Capital. ASLF III will provide debt financing to SMEs in emerging Asia. The pipeline of potential investments includes affordable housing, EV charging, logistics, and telecoms. The portfolio investments of the Fund are expected to be of medium to low environmental & social (E&S) risks. The Fund will not invest in any coal-related projects or higher risk 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, (d) risk of significant retrenchment or (e) significant occupational health and safety risks. Therefore, the Project has been categorized as FI-2 according to IFC Sustainability Policy. The E&S performance requirements for this Project will be the IFC Exclusion List, the host country laws and regulations, and the IFC Performance Standards. The main anticipated E&S risks and impacts of the Project derive from the E&S risks associated with the Fund's investment activities and its capacity and systems in place to manage these risks. The typical risks of the potential investments may include labor and working conditions, occupational health and safety, air and water pollution, waste management, handling of hazardous materials, and impacts on local communities. Such risks and impacts are generally few in number, site-specific, largely reversible and can be addressed through mitigation measures.

ADM Capital has developed an ESMS and nominated E&S roles, including an E&S Officer. The ESMS includes ADM Capital’s commitments to good E&S practices, screening transactions against an exclusion list and the host country requirements, assessment against IFC Performance Standards and the development of E&S action plans to address gaps identified. ADM Capital undertakes monitoring and reporting on the E&S performance of investments during the time of holding the investment, which includes review against the E&S action plan. ADM Capital has also established an external grievance communications mechanism. Under the Project, ADM Capital will be required to update the ESMS to articulate the current practices with respect to the E&S processes during the deal lifecycle (with additional tools where required). It will also be required to continue to maintain proper capacity for implementing the ESMS, including training staff. IFC will review the Fund’s E&S due diligence for the first three investments prior to the Fund’s making the investments to support proper ESMS implementation.

Title	Anticipated Completion Date
Amendment of the ESMS	03/31/2024

Contacts

For Inquiries About the Project, Contact

Asia Debt Management Hong Kong Limited
Hannah Topping
Director, Investor Relations
+852 2536 4567
Hannah.Topping@admcap.com
2801-05, Three Pacific Place, 1 Queen’s Road East, Hong Kong
www.admcapital.com

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Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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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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