26344 - Promerica CR Energy Efficiency Line

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Summary of Proposed Investment

Project Number

26344

Company Name

Banco Promerica De Costa Rica

Date SPI Disclosed

Feb 2, 2010

Country

Costa Rica

Industry

Financial Markets

Projected Board Date

Mar 4, 2010

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Mar 24, 2010
Signed : Mar 30, 2010
Invested : Jun 29, 2010

Project Description

The proposed project consists of a $6 million credit facility for Banco Promerica de Costa Rica, S.A. (the “Bank”), a private Costa Rican bank, subsidiary of Promerica Financial Group (“PFC”). The proceeds from the transaction will be used to increase, diversify and lengthen the Bank’s funding base by obtaining medium-term funding for on lending to sustainable finance (SF) sub-projects. Banco Promerica is the fifth largest private bank in Costa Rica in terms of assets with $444 million as of December 31, 2009.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.0
Equity

Development Impact

a) Investment in Locally-Owned Bank. Half of the private banks operating in Costa Rica are foreign owned. Increasing regulatory demands and the entry of international deep-pocket players will likely lead to a consolidation in the financial sector. IFC''s financing will support Promerica''s efforts to better face its new competitive pressures by further penetrating the SF sector and strengthening its balance sheet by matching their tenors for their long-term financing.

b) Long-Term Funding. Providing access to long-term finance to SFs, who have limited or no access to financing.

c) Access to Finance. Costa Rica has a large SF sector, which is credited with contributing 28% of their GDP. However, loans to SFs are limited and at a high cost.

Additionality

IFC''s funds will support the Bank''s expansion in the SF market. IFC''s investment would thus help the Bank to further expand into SF lending, which is severely underserved.

This project involves IFC support for a bank in Costa Rica, Banco Promerica, for Sustainable Finance projects (energy efficiency, cleaner production, renewable energy) and has been classified as a Category FI project. IFC will review the proposed investment portfolio and determine the Applicable Requirements, which may include a combination of the IFC exclusion list, the national E&S laws of the Costa Rica and the IFC Performance Standards.

The Bank is also required to: (i) develop a Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC; (ii) identify responsible, qualified persons to manage and implement the SEMS; (iii) commit to implement the SEMS, to ensure that its investments are in compliance with the Applicable Requirements; (iv) demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2; and (v) submit a periodic report to IFC.

Contacts

For Inquiries About the Project, Contact

John Keith, CEO
El Cedral, Escazu, Trejos Montealegre,
San Jose, Costa Rica. 1289-1200

Fax Number
(506) 2505-7501

Website
www.promerica.fi.cr

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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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