Sponsor:
Vanuatu Ministry of Finance and Economic Management (“MFEM”): NBV is currently 100% owned by the Government of Vanuatu. The MFEM is the sole shareholder on behalf of the government and is responsible for the formulation of national economic and finance policies.

Co-investors:
Asian Development Bank (“ADB”): ADB is an international development finance institution whose mission is to help its developing member countries reduce poverty and improve the quality of life of their people. Headquartered in Manila, and established in 1966, ADB is owned and financed by its 67 members, of which 48 are from the region and 19 are from other parts of the world.

Vanuatu National Provident Fund (“VNPF”): The VNPF is a compulsory savings scheme for employees who receive a salary of Vatu 3,000 (approximately USD 32) or more per month, to support them financially at retirement. VNPF is responsible for managing members’ retirement funds.

ADB, VNPF and IFC are expected to acquire a total of up to 45% of NBV’s share capital following the new shares issuance.

2.19 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	2.19

* These investment figures are indicative

NBV is headquartered in Port Villa, Vanuatu. The Bank has over 25 branches throughout the country.

i) Increasing Access to Finance: NBV expects to open new rural branches and expand its microfinance program in 2012, which should further drive access to finance for Vanuatu''s rural population. It is estimated that approx. 80% of Vanuatu''s total population lives in rural areas. Given high travel costs to access bank branches, only approx. 13% of Vanuatu''s rural population has bank accounts. Increased access to finance would increase inclusive growth for the larger population.

ii) Promoting Competition: The banking market is dominated by four commercial banks. The strengthening of NBV''s lending capacity will improve its competitiveness in the market. Strengthening of NBV would serve to promote competition within the sector, which would benefit the people of Vanuatu.

i) Risk Capital: IFC is playing an important role by providing capital to enhance the Bank''s growth and improve its competitiveness.

ii) Credibility: The transaction is a pre-privatization of NBV. IFC is bringing its track record in state-owned bank privatizations and will ensure the bank maintains its focus on financial inclusion and operates in line with international best practice in areas such as corporate governance and risk management.

iii) Demonstration effect: Demonstrating confidence in and support for the Vanuatu banking sector.

This project has been classified as a Category FI project according to IFC’s Environmental and Social (E&S) Review Procedure. IFC analyzed the FI’s portfolio and determined applicable performance requirements to include the IFC FI Exclusion List, applicable national laws and regulations and the IFC Performance Standards (PS).

IFC also appraised the FI’s labor practices according to the IFC’s PS 2: Labor and Working Conditions and reviewed the FI’s capacity to manage E&S risks and to establish and maintain a Social & Environmental Management System (SEMS). Based on the review, the project will be required to:
· Develop or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC;
· Identify responsible, qualified persons to manage and implement the SEMS (SEMS officer);
· Commit to implement the SEMS, to ensure that its investments/activities supported by IFC financing are in compliance with the Applicable Performance Requirements;
· Demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2: Labor and Working Conditions;
· Submit a periodic report to IFC as per a format to be provided by IFC