ODB is the non-operating holding company of the Odebrecht Group (the “Group”). It is one of the largest Brazilian private sector conglomerates. It employs directly over 120,000 people. The Group also controls Braskem, the largest private petrochemical company in Latin America. More recently, the Group has invested in other infrastructure development businesses including real estate, logistics, energy, water, and oil and gas services, among others.

The proposed IFC Facility is an up to US$75 million Partial Credit Guarantee for the benefit of surety bond providers. This Facility would have a multiplication effect, thus helping CNO obtain additional surety bonds for its expansion plans in Latin America and Africa.

50.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	50.0
Loan
Equity

* These investment figures are indicative

CNO is headquartered in Sao Paulo, Brazil. The Facility will be provided at the corporate level and will cover various construction projects in Latin America and Africa.

The Project aims to sustain the development of additional infrastructure projects when the insurance and surety industry is constrained and contribute to economic growth in Latin America and Africa. As a result, through the Project, CNO will be able to carry out additional projects in Latin America and Africa, creating employment opportunities for the base of the pyramid, generating taxes for different countries and improving critical logistics. The Company also promotes environmentally and socially sound construction projects. Finally, by supporting a company that has implemented sound corporate governance practices and a strong risk management policy, IFC will set a demonstration effect for other companies in the EPC sector. The Project's success will also encourage the Facility's replication within IFC and by other multilateral institutions.

The proposed Project is an opportunity for IFC to play an important role in its supporting infrastructure development in emerging markets, helping the debottlenecking of key areas needed for overall economic growth. The Project also represents an innovative way for IFC to make a difference in this area, supporting a global EPC player and a former client to cope with the additional demand in Brazil and on a South-South basis. Key additionality in the Project involves a mobilization component: given IFC's strong name and credit and the fact that surety bonds cover only a portion of EPC contracts, the IFC Facility would have a multiplication effect, increasing the capacity of CNO to engage in new projects and thus enabling infrastructure projects when the surety industry is constrained to provide increased support to CNO.

With the understanding that the main areas of concern associated with this Facility are: (i) potential ESHS impacts and risks of underlying sub-projects in which the bond proceeds will be used; and (ii) IFC’s exposure to reputation risks if ever associated with any negative press / media against CNO’s existing and/or potential involvement with high profile environmentally or socially sensitive/visible projects, the IFC and CNO agreed on an Environmental and Social Action Plan (ESAP) that includes the design and implementation of a Facility Environmental and Social Impacts and Reputation Risk Management Scheme (RMS) that will assure that all underlying projects ESHS impact and risk assessment and management is compliant with IFC Performance Standards.
Since the risk of the Facility is that of CNO and the Surety Bonds will support underlying construction projects which potential ESHS impacts and risks are currently unknown but could certainly include large construction projects with significant ESHS issues, this is Categorize A operation. For further details please refer to the Environmental and Social Review Summary (ESRS).