50986 - LS Senior Loan

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Summary of Investment Information

Project Number

50986

Company Name

Laxmi Sunrise Bank Limited

Date SPI Disclosed

Jul 8, 2025

Country

Nepal

Region

South Asia

Projected Board Date

Aug 15, 2025

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Nov 12, 2025

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Sep 23, 2025
Signed : Nov 6, 2025

Sector

Commercial Banking - General

Project Description

The proposed investment is a 3-year, US dollar (US$)-denominated, amortizing senior loan of up to US$20 million to Laxmi Sunrise Bank Limited (LSL or the Bank), the sixth-largest private commercial bank in Nepal. Approximately 50% of the loan proceeds will be allocated for on-lending to micro, small, and medium-sized enterprises (MSMEs) in Nepal, including underserved rural MSMEs, while at least 50% (US$10 million) will be earmarked for climate financing (the Project).

The Project aims to support the recovery of small businesses that have been disproportionately affected by the COVID-19 pandemic and subsequent economic slowdown through its MSME-focused use of proceeds. Additionally, the Project’s green financing component will help expand the Bank’s portfolio of eligible climate finance assets, with a focus on renewable energy (beyond hydropower projects) and electric vehicles, contributing to Nepal’s sustainable development goals.

Associated Advisory Engagement

IFC will provide advisory support to help LSL strengthen its MSME and climate finance business. This includes enhancing risk management practices in areas such as asset-liability management (ALM), fund transfer pricing (FTP), technology risk management, portfolio monitoring, and operational risk management. IFC will also assist in developing a green finance framework to tag and baseline the Bank’s green portfolio while building management capacity through practitioner workshops. Additionally, IFC will identify supply chain finance opportunities and recommend strategies to help the Bank capitalize on them effectively.

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
Straight Senior Loan	Loans to MSME (mix of Micro and SME)
Straight Senior Loan	Labeled: Green;Blue;Social-Loans/Bonds
Syndications	Loans to MSME (mix of Micro and SME)
Syndications	Labeled: Green;Blue;Social-Loans/Bonds

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

Development Impact

Stakeholder Effect: (i) Increased access to finance for MSMEs: Access to finance remains a major constraint for MSMEs in Nepal. The Project will increase access to finance for MSMEs in Nepal by supporting LSL in expanding its MSME loan portfolio. (ii) Increased access to climate finance: The Project will also contribute to climate mitigation efforts in Nepal by increasing access to climate finance, with a focus on renewable energy (excluding hydropower projects) and electric vehicles. Market-level Outcome: IFC anticipates that this Project will enhance competitiveness within Nepal’s climate-finance market by reinforcing the importance of climate finance as a distinct asset class in Nepal, sending a strong signal to the market and encouraging replication by other financial and non-financial institutions.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Climate Loans	number	Non-hydro	Not Available	Not Available	Not Available
Number of Outstanding Loans, MSMEs	number		Not Available	Not Available	Not Available
Value of Outstanding Loans, MSMEs	USDMill		Not Available	Not Available	Not Available
Volume of Outstanding Climate Loans	USDMill	Non-hydro	Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The lending business of the Laxmi Sunrise Bank Limited (LSL or the Bank) involves full spectrum of long-, medium- and short-term products for corporate finance, project finance, MSMEs, syndications, and several commercial and consumer retail products. IFC loan is targeted towards MSMEs (50%) and Climate (50%). The asset class to be supported by IFC could include sectors like construction and manufacturing with industries ranging from cement, brick kilns, and utility scale solar projects. The potential E&S risks within these sectors include labour working conditions including accommodation, legal non-compliance and community impacts, occupational health and safety concerns, especially regarding contractors, Gender-Based Violence and Harassment (GBVH), supply chain issues and pollution and waste management. IFC’s loan will not involve financing related to, (i) any hydropower projects; (ii) any brick kiln operations unless Better Bricks Nepal certified; (iii) any other High 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, d) retrenchment, or e) Significant Occupational Health and Safety risks); and (v) any financial institution/financial services company which is materially exposed to high-risk portfolio. Hence, the E&S risk of the proposed investment is medium, and the Project is categorized as FI-2 according to IFC's Policy on Environmental and Social Sustainability. The applicable performance requirements will be i) the IFC- FI Exclusion List and ii) the relevant national E&S laws and regulations. This project will not trigger IFC commitment to sub-project disclosure.

The Bank has an E&S Policy and an E&S risk management system (ESMS) in line with the Nepal Rashtra Bank’s ESRM Guidelines 2022 that are broadly aligned with IFC Performance Standards (PSs). (https://www.nrb.org.np/contents/uploads/2022/02/Final-ESRM-with-cover.pdf) .
The bank has a dedicated E&S Sustainable Department and designated E&S officers responsible for E&S risk management. The ESMS includes E&S risk categorization procedures, E&S due diligence covering compliance as well as ESRM requirements, identification of corrective actions, and risk-based monitoring of sub-borrower’s performance. The ESDD checklist within ESMS will be upgraded and benchmarked against IFC PSs, to identify contextual risk areas (like labour and community, OHS, and GBVH among others), allow the bank for screening out higher E&S risk transactions, and the mitigants to be implemented by the borrowers. Supply chain review of solar projects will be an ongoing requirement as core of E&S Due diligence. Further, the bank will strengthen the E&S capacity to implement the upgraded ESMS through staff training. It will disclose a summary of its updated ESMS, on its website, as relevant to the Project supported by the IFC’s proceeds. Bank also has an adequate HR documented policy and a dedicated HR unit to manage potential risks emerging out of human resources management. It follows the fire safety regulations as applicable to its premises.

S.no	Title	Anticipated Completion Date
1	Update ESDD checklist for IFC financed asset class	09/30/2025
2	Enhance the ECM/E&S Grievance Mechanism	12/29/2025
3	Upgrade Human Resource Policies in compliance with the national laws and IFC PS2	12/29/2025

Contacts

For Inquiries About the Project, Contact

Laxmi Sunrise Bank Limited
Mr. Piyush Raj Aryal
Chief Financial Officer (CFO)
+977-1-4544684/685
piyush.aryal@laxmisunrise.com
P.O. Box: 19593, Laxmi Complex, Hattisar Kathmandu Metro – 1, Kathmandu, Nepal
www.laxmisunrise.com

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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.

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Online form: available at https://www.cao-ombudsman.org/
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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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