48604 - SLGP EC RSF Credit Agricole Ukraine

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Summary of Investment Information

Project Number

48604

Company Name

RSF CREDIT AGRICOLE UKR

Date SPI Disclosed

Oct 26, 2023

Country

Ukraine

Region

Europe

Projected Board Date

Nov 27, 2023

Environmental Category

FI-2 - Limited

Status

Pending Approval

Last Updated Date

Oct 31, 2023

Department

CF2S8 - Regional Industry - FIG - ECA/FIG Inv Operations - Europe

Industry

Financial Markets

Sector

Commercial Banking - General

Project Description

The proposed investment consists of an unfunded risk sharing facility (RSF) with Credit Agricole JSC (CAU or the Bank) for a portfolio of loans to small and medium enterprises (SME) in the amount of up to €40 million (c.US$42 million equivalent) in Ukraine, where IFC’s risk participation will be up to €20 million (c.US$21 million equivalent), or 50% of the aforementioned SME loan portfolio (the Project).

The Project will be processed under IFC’s Small Loans Guarantee Program (the Program), a programmatic approach to de-risk and scale up financing for SMEs in Ukraine and other eligible countries. The Program will benefit from a pooled first loss guarantee provided by the European Commission (EC) via European Fund for Sustainable Development (EFSD) and the IDA IFC-MIGA Private Sector Window’s Blended Finance Facility (IDA PSW-BFF) (SLGP EC/PSW), which will help enable the Bank lending to the underserved SMEs in Ukraine and at affordable rates.

In addition, the investment may potentially be supported by Economic Resilience Action (ERA) Program for Ukraine funded by the Government of the Netherlands (ERA Netherlands) in the form of a performance-based incentive (PBI), subject to Credit Agricole JSC achieving agreed targets, to incentivize increased finance for SMEs in the agriculture sector in Ukraine.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	21.88
Loan
Equity

Development Impact

IFC's additionality is driven by its countercyclical role during crises, especially when the appetite of other lending institutions is subdued, through de-risking instruments for financial institutions serving SMEs and providing comfort to SME finance providers and international and domestic investors. Moreover, IFC's advisory services team provides global expertise on RSFs and complements each risk-sharing project with an advisory services project that aims to provide operational implementation support. In this regard, IFC will play an important role in transferring expertise and knowledge, which is expected to have a positive impact on the overall operations and activities of Credit Agricole JSC.

E&S Category Rationale / Risks and Mitigation

The proposed investment consists of an unfunded risk sharing facility with CAU for a portfolio of loans to SMEs loans including agricultural and rural SMEs. The expected portfolios to form the RSF will comprise low to medium environmental and social (E&S) risk investments with potentially limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures. The Project will not support any activities on the IFC Exclusion List, coal, and/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. The Project has therefore been categorized as FI-2 according to IFC’s Sustainability Policy. For this Project, IFC's applicable E&S requirements will be the IFC Exclusion List and the applicable environmental and social national laws and regulations, and alignment with the requirements of IFC’s Performance Standard 2 on Labor and Working Conditions and life and fire safety requirements. The main E&S risks and impacts of this investment relate to the clients having adequate systems and capacity in place to manage the operations being financed in line with the IFC’s applicable E&S requirements.

CAU has E&S staff assigned. CAU plans to introduce Environmental, Social and Governance Risk Management procedures as part of the Sustainable Development Strategy, which is currently under development. As of now, the norms related to E&S are included into the Risk Strategy approved by the Management Board and respective authority of the Credit Agricole Group. For this Project, CAU will need to enhance the ESMS in line with the Project’s E&S requirements to cover all SME loans eligible for financing under the RSF.

Contacts

For Inquiries About the Project, Contact

JSC Credit Agricole Bank
Vladislav Berezhny
Director of Trade and Structured Finance Department
+38 044 490-14-77
vladislav.berezhny@credit-agricole.ua
23A, Volodymyrska Street, Kyiv 01001 – Ukraine
https://credit-agricole.ua/en

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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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Task Title & Description	Anticipated Completion Date
Enhance ESMS	11/30/2023
Submit E&S training plan	11/30/2023
Carry out training for staff to implement the ESMS	02/29/2024
Submit ESMS implementation records	05/31/2024

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