The project entails an investment of up to US$50 million from IFC’s own account in a 12-year structured fund, with a 10 year total life of senior loans, to support small and medium enterprises (SMEs) directly or through financial institutions to implement climate projects in clean energy, mobility, and sustainable agriculture. The Fund will provide working capital, receivable finance, and longer-term financing to SMEs and technology solutions providers for projects such as rooftop solar, biogas, efficient cookstoves, LED lighting and high efficiency cooling. The Fund will also provide lending to companies owning fleets of electric vehicles and companies offering leasing and battery services of electric vehicles. The Fund will also lend to agricultural companies directly to implement lower carbon and more resilient solutions, as well as agricultural services companies that provide cold chain, water efficiency, methane capture and reutilization.

The expected E&S risks and impacts of the Project are considered medium. As such, the Project has been categorized as Category 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. In addition, the Project will not support companies exposed to higher E&S risks as defined in the 2023 Guidance Note of Financial Intermediaries. The applicable E&S performance requirements for this Project include the IFC Exclusion List, relevant host country E&S laws and regulations, and the IFC Performance Standards. The key E&S risks and impacts of this Project originate from the activities of the Fund’s borrowers and their ability to manage these risks as well as Lendable’s capacity to properly assess E&S risks up front, design and agree on corrective actions, and monitor their implementation. Typical risks and impacts include occupational health & safety, supply chain-related risks, labor and working conditions, and waste management, among others.

Lendable has developed an Environmental and Social Management System (ESMS) specific to financing activities in the clean energy sector. In addition, Lendable has designated staff responsible for managing the ESMS implementation, and staff undertake basic E&S risk management training. The ESMS review process includes Exclusion List screening, E&S categorization, an E&S assessment of the borrowers, investee companies, and supported project(s) against applicable local laws and the IFC Performance Standards, development of an E&S action plan, inclusion of E&S covenants into the legal agreement, and post-disbursement monitoring.

For this project, Lendable will also: (i) screen pipeline projects against E&S eligibility criteria, and undertake project, contextual, reputational, and supply chain risk screening; (ii) to the extent needed, utilize services of external E&S consultants for complex category B projects; and (iii) offer on-going E&S training to staff responsible for ESMS implementation.

Lendable will also be required to: (i) develop a procedure for screening out higher E&S risk transactions; (ii) develop assessment tools to manage occupational health and safety risks related to solar and other clean energy projects; and (iii) develop assessment tools to assess and manage E&S risks associated with mobility and sustainable agriculture activities. In addition, Lendable will be required to develop an E&S risk management training plan for staff involved in implementing the Project. Lendable may draw on external
support to develop and/or deliver the training, subject to the availability of technical assistance financing to support this initiative. The training plan will be implemented with periodic updates and refreshers, as appropriate.