48908 - DCM Arab African International Bank

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

48908

Company Name

ARAB AFRICAN INTERNATIONAL BANK

Date SPI Disclosed

Sep 29, 2024

Country

Egypt, Arab Republic of

Region

Africa

Projected Board Date

May 29, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 21, 2024

Department

CF3NA - Regional Industry - FIG Africa/FIG North Africa

Industry

Financial Markets

Previous Events

Approved : May 29, 2024
Signed : Sep 18, 2024
Invested : Dec 19, 2024

Sector

Commercial Banking - General

Additional Project Attributes

Blended Finance

Project Description

The proposed project involves an IFC investment of a 5-year senior sustainability bond of up to (i) US$300 million in Arab African international Bank’s (AAIB or the Bank) US$500 million sustainability bond program, to support the Bank’s expansion of green and sustainable related projects (the Project), and (ii) up to $50 million uncommitted trade finance facility under the Global Trade Finance Program (“GTFP”). In addition, it is expected to be supported by the IFC-BMWK Scale up Climate Finance through Greening the Financial Sector (BMWK) Program as described in the Blended Finance Section.

Associated Advisory Engagement

The project is supported by IFC’s Egypt30by30 Upstream program. The advisory engagement will support AAIB in (i) assessing its existing sustainable business to identify climate development opportunities; (ii) developing its sustainability bond framework (pre-issuance); (iii) preparing the sustainability bond impact reporting (post issuance); and (iv) portfolio monitoring and reporting, in line with green bond reporting requirements. Furthermore, the project will provide support to AAIB’s real estate developer clients, which will eventually help the Bank to transform its pipeline into climate eligible assets within its portfolio, thereby accelerating the use of the sustainable bond’s proceeds and expanding AAIB’s green portfolio.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	308.40
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	Labeled: Green;Blue;Social-Loans/Bonds
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds

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

Development Impact

The most significant expected Project-level outcome is increased access to climate finance and micro, small, and medium enterprises (MSMEs) finance including to women-owned MSMEs in Egypt. IFC anticipates that via market enabling and demonstration/replication channels, the Project will promote sustainability through the issuance of the first sustainability bond by a bank in the country that will promote the adoption of international standards for such issuances in Egypt.

IFC's additionality through the Project is both financial and non-financial. Financial additionality will be provided through: (i) an innovative financing instrument via the introduction of the first sustainability bond issuance in Egypt, and (ii) financing structure by providing longer term funding to AAIB that is not readily available in the market. Non-financial additionality will be provided through knowledge, innovation, and capacity building. The Project is complemented by an advisory engagement through IFC's advisory services under IFC Egypt30by30 program, which will support the Bank's capacity building both pre and post sustainability bond issuance as well as raise awareness on climate risk management and assessment, and green building EDGE certification.

E&S Category Rationale / Risks and Mitigation

The Project is an investment in AAIB’s Sustainability Bond issuance. Proceeds from the issuance will support eligible green assets, and MSMEs. The Project will not support Excluded Activities, coal-related activities, mining, oil and gas, or any other Higher-Risk activities that may include: (a) involuntary resettlement; (b) potential 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.

The main E&S risks of the Project relate to the Bank’s capacity to correctly implement its newly established ESMS to manage the E&S risks associated with the sub-projects supported through the Project proceeds. Overall, the E&S risk associated with the asset class to be supported by IFC is considered medium, and likely to entail medium adverse E&S risks and impacts that are few, generally site-specific, largely reversible and can be readily addressed through mitigation measures. The Project has therefore been categorized as FI-2 according to IFC’s Sustainability Policy. The applicable environmental and social requirements will include the IFC Exclusion List, host country laws and regulations, and screening against the IFC Performance Standards to identify and exclude higher-risk activities. The IFC Performance Standard 2 on labor and working conditions and Life and Fire Safety requirements are applicable at the Bank level.

AAIB had an existing E&S policy covering the Equator Principals requirements. The Bank has recently updated its policy to widen the scope of application to all of the Bank’s funded lending operations, including a step of screening against higher E&S risks, indicate different E&S due diligence requirements and for different client segments and loan tenors, clarify roles and responsibilities for all departments involved in the implementation, improve E&S due diligence tools, include E&S considerations in the loan agreements, among other improvements. The updated policy has already been approved by the Bank board, but the ESMS implementation is yet to start.

AAIB’s subsidiaries that could benefit from the proceeds of this bond are Sandah microfinance and Arab African International Leasing (“AAIL”). Sandah has a satisfactory ESMS in place and no changes to it are required. AAIL will be required to develop E&S risk management procedures and appoint an E&S officers should Bond proceeds be utilized to support leasing. The Bank’s Human Resources policies and practices are overall in line with the requirements of the IFC Performance Standard 2, yet enhancements to the Bank’s practices were identified to support equal opportunity and non-discrimination at hiring.

S.no	Title	Anticipated Completion Date
1	ESMS update	12/28/2025
2	ESMS implementation plan	07/15/2024
3	E&S Capacity	10/15/2024
4	ESMS implementation evidence	01/15/2025
5	HR update	07/15/2024

Contacts

For Inquiries About the Project, Contact

Arab African International Bank Egypt
Marwa El Bakary
Head of Financial Institutions
+201227376461
mbakary@aaib.com
5 Midan El Saray El Koubra - Garden City - Cairo - Egypt
https://aaib.com/

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

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

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Associated Advisory Engagement

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

Blended Finance

IFC's Investment as Approved by the Board

FIG Use of Proceeds/Beneficiaries

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

Development Results

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer