Bancolombia is the largest bank in Colombia. As of December 2010, it accounted for approximately 20% of total net loans and 19% of total net deposits within the entire local banking system. The bank, together with its subsidiaries, offers a wide array of products and services channeled through a regional platform that includes a leading bank in El Salvador. The bank’s products and services include: investment banking; stock brokerage; leasing; factoring; consumer finance; asset management; fiduciary and trust services; and pension fund management. Bancolombia, an existing IFC client, and the first local Equator Principles Financial Institution (EPFI) in the country, has a sustainability unit to spearhead its efforts in this area. Bancolombia is listed in the NYSE since 1995 through an ADR program. It is controlled by the Grupo Empresarial Antioqueño (GEA) through two of the group’s companies: Grupo de Inversiones Suramericana and Inversiones Argos. Together, these two companies hold almost 40% of Bancolombia’s outstanding shares, followed by the ADR program that accounts for 22.6% of the bank’s equity.

The proposed transaction consists of a risk sharing facility with Bancolombia to cover an up to COP200,000 million ($100 million) portfolio of sustainable assets originated by the Bank. Under this facility, IFC and the Inter-American Development Bank (“IDB”) will cover the risk of 50% of that portfolio (25% each), resulting in a maximum IFC exposure of COP50,000 million. The investment is expected to receive support from the Clean Technology Fund and will have a parallel advisory services component.

30.40 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee	30.40
Loan
Equity

* These investment figures are indicative

Bancolombia is headquartered in Medellín, Colombia. The Bank has 714 branches and 2,223 automatic teller machines (ATMs) across Colombia, for a countrywide footprint.

IFC's involvement in this project would allow the Bank to make financing available to businesses committed to higher environmental standards that need longer term funding for their sustainability-related activities. It is also expected that the project will lead to the adoption of higher environmental standards across the banking sector.

Through the proposed risk sharing facility, IFC would help fill a market gap. By providing Bancolombia with the appropriate risk protection it requires to enter a new market and create a new business line in climate change finance. IFC is uniquely positioned to bring value added to Bancolombia thanks to its strategic relationship with the Bank and IFC's sustainability expertise.

As a Category FI (Financial Intermediaries) project, IFC''s E&S (Environmental and Social) appraisal of this project will focus on assessing Bancolombia''s capacity to manage the E&S risks associated with the eligible sub-projects, which may include energy efficiency, renewable energy, cleaner production, and green building. The Bank has an existing Social and Environmental Management System (SEMS), which will be reviewed in combination with the proposed activities to be supported by the facility in order to confirm SEMS adequacy to manage the E&S risks of sub-projects and to determine the applicable requirements, which may be a combination of: the IFC FI Exclusion List, the applicable National Social and Environmental Laws and regulations and/or the IFC Performance Standards. During the appraisal IFC will also confirm compliance with the IFC’s Performance Standards 2: Labor and Working Conditions. The client will be required to maintain or upgrade its existing SEMS, submit an annual E&S report to the IFC, deliver copies of the E&S due diligence reports for eligible sub-projects, and commit to apply the IFC Performance Standard 2.