48681 - Agricover SL

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Summary of Investment Information

Project Number

48681

Company Name

AGRICOVER CREDIT IFN SA

Date SPI Disclosed

Oct 3, 2024

Country

Romania

Region

Europe

Projected Board Date

Nov 15, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Apr 26, 2025

Department

Regional Industry FIG LAC & EUR

Industry

Financial Markets

Previous Events

Approved : Dec 13, 2024
Signed : Mar 27, 2025
Invested : Apr 24, 2025

Sector

Other Non-Banking Financial Institution (NBFI)

Additional Project Attributes

Blended Finance

Project Description

The proposed investment consists of a senior unsecured loan of up to €30 million (US$32.5 million equivalent), including up to €15 million (US$16.25 million equivalent) for IFC’s own account and up to €15 million (US$16.25 million equivalent) potential mobilization, to Agricover Credit IFN SA (“IFN” or “the Company”) (the Project).

IFN has been an IFC client since 2012 and is the largest Romanian non-bank financial institution specializing in financing the agricultural sector. The loan’s proceeds will be entirely used to support the Company’s loans to Romanian SMEs in the agricultural sector, many of which are owned by farmers, with at least 50% of proceeds to be directed towards women owned SMEs.

The Project is expected to be supported by the IFC’s Banking on Women program, subject to the Company achieving agreed targets.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	20.0
Equity

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
Syndications	Loans to Woman-Owned SMEs
Syndications	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	Loans to Woman-Owned SMEs
Straight Senior Loan	Loans to MSME (mix of Micro and SME)

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

Development Impact

The most significant expected project-level outcome is increased access to finance for farmers, including women farmers, a segment facing an even larger financing gap. The Project will help promote inclusiveness for agri-SMEs in the finance market. It will also support the capacity of SMEs in the agricultural sector to sustain operations amidst the adverse impact of Russia's invasion of Ukraine. SMEs by their nature are more fragile, face greater challenges to access funding, and are typically less resilient to exogenous shocks during an economic crisis. Romania also has a significant gender gap, and the investment that promotes financing for women-owned SMEs in the agri sector will promote market inclusiveness.

IFC's additionality is driven by providing medium-term financing in local currency, not readily available in the market. Furthermore, the Project will support the Company's ability to provide funding to the agricultural sector, which is comprised mainly of smaller producers, who are largely underserved by the banking sector. IFC's engagement is instrumental in providing comfort to other potential lenders, particularly in the current environment where Russia's invasion of Ukraine has adversely impacted the agricultural market in the region.

Indicator	Metrics	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, SMEs	loans	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
SME share of total loan portfolio	%	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Value of Outstanding Loans, SMEs	USDMill	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Women-owned SME as a share of SME loan portfolio	%	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment
Board Composition - Women (% and #)	%	Pre-dates IFC investment	Pre-dates IFC investment	Pre-dates IFC investment

E&S Category Rationale / Risks and Mitigation

The use of IFC’s proceeds under the Project will support loans to Romanian SMEs in the agricultural sector, many of which are owned by farmers. The activities supported under the project are mostly expected to have medium E&S risks and include a limited number of business activities that have potential adverse environmental or social risks or impacts that are few in number, generally site specific, largely reversible, and readily addressed through mitigation measures. Therefore, this Project has been categorized as FI-2 in accordance with IFC's Sustainability Policy.

The applicable E&S requirements will include the IFC Exclusion List and Romanian E&S laws and regulations. The following activities are not eligible for financing under this project: IFC Exclusion List activities, coal related activities, and higher risk business activities that may include (i) involuntary resettlement; (ii) risk of adverse impacts on Indigenous Peoples; (iii) significant risks to or impacts on the environment, community health and safety, biodiversity, or cultural heritage; (iv) risk of significant retrenchment; and/or (v) significant occupational health and safety risks. In addition, the Bank will need to maintain alignment with life and fire safety requirements and the requirements of IFC’s PS2 on Labor and Working conditions.

Key risks from activities supported by this investment may derive from Agricover Credit IFN SA (ACR)'s capacity to properly implement the environmental and social management system to manage the E&S risks associated with the portfolio supported through the Project proceeds which typically include occupational health and safety issues, labor and working conditions and waste and wastewater management.

Agricover Credit has been a long lasting client of IFC and has developed an E&S Management System (ESMS). The ESMS, which was last updated in 2021, is applied across the entire portfolio and the E&S risk assessment procedures are an integral part of the overall credit risk management. The ESMS outlines the E&S policy commitments, due diligence process and procedures, tools, monitoring, and reporting. The assessment of environmental and social risks involves several steps, including screening against Agricover Credit's exclusion list, which is in line with both IFC's exclusion list and relevant Romanian laws. Additionally, a comprehensive due diligence assessment process is conducted to thoroughly evaluate environmental and social factors

Contacts

For Inquiries About the Project, Contact

AGRICOVER CREDIT IFN SA
Denisa Manoliu
Financial Director
+4021 336 4645
Denisa.Manoliu@agricover.ro
1B Pipera Boulevard, Cubic Center 8th floor, Voluntari, Ilfov
https://agricover.ro/en/

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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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