28330 - Taageer II

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Summary of Proposed Investment

Project Number

28330

Company Name

Taageer Finance Co SAOG

Date SPI Disclosed

Oct 26, 2009

Country

Oman

Industry

Financial Markets

Projected Board Date

Dec 15, 2009

Status

Completed

Sector

Leasing Services

Department

Regional Industry FIG MCT

Environmental Category

Previous Events

Approved : May 27, 2005
Signed : Jun 8, 2005
Invested : Jun 24, 2005

Project Description

Established in 2001, Taageer Finance Company (“TFC” or the Company) is the third largest leasing company in Oman by total assets as of June 2009. 50% of TFC’s lease book is in SMEs. Since IFC’s first involvement in TFC in 2005, TFC has achieved a notable growth in its lease book and is traded on the Muscat Stock Market. TFC has a network of 5 full-fledged branches and about 2,800 micro, small and medium clients. TFC is licensed and regulated by the Central Bank of Oman. The project aims to provide TFC with a much needed long term debt on both IFC’s account and potentially on the account of syndication participants under IFC’s syndication umbrella.

Sponsor / Cost / Location

Development Impact

The Project is expected to have a high development impact as it would: Enhance TFC’s ability in the market to promote TFC’s financial services to the SMEs, ultimately generating employment in Oman. Raise awareness of TFC to finance SMEs engaged in the advancement of modern and energy efficient equipment through leases, eventually supporting the diversification of Oman’s economy away from hydrocarbon export dependence towards other real sectors with high demonstration and replication investment effect. Strengthen the Company's capacity in social and environmental risk management through establishment of a social and environment management system. Facilitate capacity building and best practices in the Company through delivery of IFC’s advisory services to TFC in the area of credit risk management.

Additionality of the project would be to: Support IFC’s good leasing portfolio client in its further development with a long term financing during a financial crunch; Mobilize additional resources for TFC, expected through syndication participants; and Facilitate demonstration effect on other private investors to invest in the Omani leasing sector and engage with the Omani private sector.

This is a repeat investment with TFC. The S&E performance of TFC to date has been poor. While the company has nominated an SEMS officer, an SEMS has not been implemented despite a supervision mission conducted in November 2008 and it not clear that TFC is managing S&E risks appropriately. The most current ESRR is F3-High.

For this investment the client will be required to develop an SEMS to screen investments against the IFC exclusion list and national laws as a condition of commitment. IFC''s appraisal will focus on the client''s S&E due diligence capacity.

Based on the available information at present, the project tier of Tier I is appropriate.

Contacts

For Inquiries About the Project, Contact

Mr. Sanjeev Kumar Chadha Chief Executive Officer Qurum House P O Box No. 3509 Postal Code 112, Ruwi Sultanate of Oman Fax: (+ 968 ) 2481 1143 Email: Taageer@omantel.net.om

For Inquiries and Comments About IFC, Contact

General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384E Mail: Webmaster

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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