48662 - Brilla Social Bond

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Summary of Investment Information

Project Number

48662

Company Name

PROMIGAS SA ESP

Date SPI Disclosed

May 3, 2024

Country

Colombia

Region

Latin America and the Caribbean

Projected Board Date

Jun 13, 2024

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Jan 4, 2025

Department

Regional Industry INF LAC & EUR

Industry

Metals and Mining

Previous Events

Approved : Aug 8, 2024
Signed : Nov 4, 2024
Invested : Dec 20, 2024

Sector

Natural Gas Distribution

Project Description

The proposed investment consists of the issuance of an up to 10-year social bond (the “Social Bond”) for up to US$200 million in COP equivalent (eq. to c.COP800,000 million) by Promigas, with two majority-owned subsidiaries, Surtigas S.A. E.S.P. (“Surtigas”) and Gases de Occidente S.A. E.S.P. (“GdO”), as co-issuers (jointly with Promigas, the “Issuers”). The funds raised from the Social Bond will be used to support Brilla, the non-banking financing division of Promigas that provides consumer loans to the Issuers clients. These loans are facilitated through the gas distribution companies, including Surtigas and GdO. The Social Bond will be issued in Colombia’s Segundo Mercado.

Associated Advisory Engagement

This project does not involve any advisory services.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	130.0
Equity

Development Impact

The Project will support the growth of Brilla’s lending program to base-of-the-pyramid populations (“BoP”). The key Project outcome entails increased access to finance for consumer lending. Brilla’s loans to BoP individuals increase access to basic goods and services and thus help them improve their living conditions. Beyond Brilla’s impact, the Project will also contribute to the development of Colombian capital markets and promote market competitiveness through demonstration and replication effect.

Through the proposed investment, IFC is supporting the growth of Brilla. IFC is providing financial additionality by offering local currency long-term financing. In addition, IFC will signal confidence in the local capital markets and provide additional liquidity by mobilizing one or more investors that subscribe US$100 million of the issuance. IFC is also providing knowledge, innovation, and capacity building by leveraging IFC’s expertise to assist the Company in developing a social bond framework with the best practices of the Social Bond Principles as administered by the International Capital Market Association (“ICMA”).

E&S Category Rationale / Risks and Mitigation

The Project entails the issuance of a social bond by Promigas (the Company) to support Brilla’s consumer credit portfolio targeting Promigas’ clients in Colombia and has been classified as category FI-3 according to the IFC Sustainability Framework. The E&S risks of the project are associated to those of the client’s targeted portfolio which, due to the focus on individuals only, are considered to be low. As part of the Project, the Company will be required to inform IFC in case of any change in Brilla’s portfolio that may affect the nature of E&S risk of its operations and remain committed to maintain its labor standards in line with the IFC Performance Standard 2.

Contacts

For Inquiries About the Project, Contact

Promigas S.A. E.S.P.
Andrea Hernandez
Financial Resources Coordinator
+57 605 371 3341
andrea.hernandez@promigas.com
Calle 66 No. 67 – 123. Barranquilla, Colombia
https://www.promigas.com/Paginas/default.aspx

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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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