Montepio Geral (MG) is the sponsor of this project. The MG Group was established in 1840 and is today the most important mutual institution in Portugal, with close to 200 thousand associates. The Group fully owns Caixa Económica Montepio Geral, the oldest Portuguese credit institution, that was created in 1844. Recent changes to the Portuguese banking legislation recognized MG as a full fledged commercial bank, allowing them to boost their activities, sustained by the expansion of the branch network, restructuring of services and technological modernization. The new status of MG also allowed the company to start working towards the completion of one of its visions: to expand its international activities through representative offices in markets with a strong Portuguese emigrant community and with joint-venture operations to all five Portuguese speaking countries in the African continent. Presently, and always in partnership with local partners, MG is established in Cape Verde with Caixa Económica de Cabo Verde, Guinea-Bissau with Banco da Àfrica Ocidental (in partnership with Banco Efisa and IFC) and in Mozambique with Banco de Desenvolvimento e Comércio (in partnership with Banco Efisa and possibly with IFC). MG also considered taking an equity stake in the privatization of Banco Comercial Angola, in Angola, but the requirements of the Angolan authorities were not considered acceptable. Lastly, MG is considering setting up a new financial institution in Sao Tome and Principe. The MG Group holds 27.4% of the share capital of CECV and all the remaining shareholders are all from Cape Verde.

The project consists of a credit line of up to EUR5 million to be extended to CECV, with a tenor of 5-7 years. This project is the first IFC investment in Cape Verde’s financial markets.

6.08 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.08
Equity

* These investment figures are indicative

CECV is headquartered in Praia, Cape Verde. The bank has a large geographical coverage and is present in most of the islands of the archipelago.

This is an FI Type 2 project. The bank will be required to undertake an environmental review of each subproject. IFC will assess the bank’s capability to carry out environmental reviews.
Location of environmental documents in locally affected community

Development Impact The proposed project will have a significant development impact in Cape Verde. In particular, it will: - improve CECV corporate governance practices. IFC’s name is perceived a good practitioner in this area and the bank requested IFC’s assistance to develop a sound corporate governance system; - Channel much needed foreign exchange term-finance to Cape Verde’s private sector; and, - Encourage further investment from Portuguese companies to the archipelago, given CECV’s strong Portuguese links. IFC’s Role: This is potentially the first investment by IFC in a financial institution in Cape Verde. IFC’s knowledge and experience in banking in the region is well recognized by the sponsor, and they look forward to IFC’s assistance. IFC will be providing long-term funding, which is in short supply in the region. Even major banks in countries with well developed capital markets and access to foreign sources of funding have difficulty in obtaining long-term (3 years and longer) hard currency funding. The proposed 5-7 year term facility, will allow CECV to expand its long-term activities and enhance its ability to match its foreign exchange assets and liabilities.