25063 - ProCredit Serbia - Energy Efficiency

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Summary of Proposed Investment

Project Number

25063

Company Name

PROCREDIT BANK A.D.

Date SPI Disclosed

Aug 23, 2006

Country

Serbia

Industry

Financial Markets

Projected Board Date

Sep 22, 2006

Status

Completed

Sector

Commercial Banking - Housing Finance

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Nov 20, 2006
Signed : Nov 22, 2006
Invested : Feb 28, 2007

Project Description

ProCredit Bank Serbia (the Bank or PCB) was the first foreign bank to enter the Serbian market after the fall of the Milosevic regime. It focuses on lending to micro- and small-enterprises.

The project consists of a EUR10 million energy efficiency senior term loan to the Bank. The facility would be dedicated to financing Energy Efficiency (EE) improvements.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	19.15
Equity

Development Impact

The development impact for this project is high. It fosters:

- Energy Efficiency Improvement:

The project would support the launching of a new Energy Efficiency program with a commercial bank as an intermediary. The EE program would focus on:

- EE improvements in MSEs; and
- the use of cleaner and renewable sources of energy (such as natural gas, solar energy) by MSEs.

- Improved Competitiveness:

Due to reduced energy costs as well as quality improvements as a result of technology and process upgrades, the project would contribute to improving the competitiveness of MSEs supported.

- MSE Lending:

It would provide long term funding to Serbian MSEs that constitute a significant engine of economic growth, while remaining underserved by the financial sector.

- Capacity Building:

It would strengthen the Bank’s balance sheet, improve its asset liability management and enable the Bank to expand its financial intermediation capacity.

Overall, the IFC/ProCredit EE program would result in conservation of energy and lower CO2 emissions, and have important social and economic implications by lowering monthly energy bills for MSEs. Through the project, IFC would introduce a new highly developmental energy efficiency MSE product to the Serbian market. This would be the first product of this type offered by a bank in Serbia, and it would have strong replication potential.

This is a category FI project as per IFC’s Environmental and Social Review procedure. As part of an existing transaction, the bank uses the template environmental management system (EMS) common to all ProCredit banks. For this investment, IFC will review the existing EMS for consistency with IFC’s new Sustainability Policy, and suggest changes to address gaps, if any. ProCredit Serbia will need to provide an update on the EMS incorporating the suggested changes prior to disbursement and commit to implementing the same.

Contacts

For Inquiries About the Project, Contact

Svetlana Tolmachova
Deputy General Manager
Bulevar despota Stefana 68c
11000 Belgrade
Serbia
E-mail: s.tolmachova@procreditbank.co.yu
Telephone: +381 11 2077 919
Fax: +381 11 2077 905

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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

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.

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