The sponsor, Banco ABN AMRO Real, is a wholly-owned subsidiary of ABN AMRO Bank N.V. in the Netherlands.

The proposed IFC investment is a $200 million-equivalent loan for IFC’s own account.

200.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	200.0
Equity

* These investment figures are indicative

Banco ABN AMRO Real is headquartered in São Paulo and has a wide network of branches throughout Brazil.

The expected development impact of the project is to create heightened awareness of sustainability-related issues at Brazilian companies by satisfying some of the increased demand for this type of financing that was created by prior SCLs, and thereby leading to a further supply of – as well as demand for – this type of credit product in Brazil.

The project’s development impact – like that of prior SCLs undertaken with Banco Real – is expected to be significant, and includes the following:

- Financial support for sustainability-oriented (i.e., environment-related, supply chain-related, and CG-related) business efforts at Banco Real;
- Financial support for environment-related sub-projects;
- Financial support for companies that provide significant amounts of working capital to large numbers of SME clients/customers (in other words, supply chain-related financing);
- Implementation by SMEs of specific CG Improvement Plans;
- Environment and CG demonstration effect on other companies, who might not necessarily be funding themselves under the SCL;
- Demonstration effect on other Brazilian banks of viability/attractiveness of sustainability-oriented credit activities.

IFC’s role and expected contribution in the project consist of:

- providing long-tenor funds to the Bank, without which Banco Real would find it difficult to fund sustainability-related sub-projects that are characterized by relatively long gestation and payback periods; as well as
- continuing to provide the Bank with methodological/transactional frameworks and helping it to set industry benchmarks for sustainability-related lending, which in turn will demonstrate to other Brazilian banks the viability of such specialized financial services.

As such, the project fits into IFC’s strategy of investing in the financial sector to improve the prospects for sustainable growth.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC analyzed the activities that could be supported with IFC financing for types of transactions, size, tenor and industry sectors and determined the Applicable Performance Requirements based on an analysis of the potential Social and Environmental risks associated with the FI portfolio and considering IFC’s investment. The Applicable Performance Requirements are: the IFC FI Exclusion List and the applicable National Social and Environmental Laws and regulations.

IFC also reviewed the FI’s existing Social & Environmental Management System (SEMS) maintained by its parent company to which Banco Real is a full subsidiary, and the FI''s capacity to implement the same. It was found that the FI has a high degree of commitment to sustainability as demonstrated in its being an Equator Principles bank and its local and global social and environmental risk policies to assess and manage the social and environmental risks of their investment activities. Based on the review, Banco Real would be required to:

- update its excluded industries to be consistent with IFC''s FI exclusion list,
- ensure the ongoing operation of the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements, and
- submit a periodic report to IFC per a format to be provided by IFC.