Continental is the second largest commercial bank in Peru with over $15.6 billion in assets and $1.3billion in equity. Continental operates as a universal bank, with an important presence in most market segments. Continental’s main shareholder is Holding Continental S.A. (92%), which is in turn jointly owned by BBVA Group (Spain) and Brescia Group (Peru). The remaining shares are owned by pension funds and individuals.

BBVA Group is one of the largest and oldest financial groups worldwide dating back to 1857. As of December 2011, BBVA has over $775 billion in assets and $52 billion in equity. BBVA is rated A, Aa3, and A by Fitch, Moody’s and S&P respectively.

Brescia Group is one of the top corporate conglomerates in Peru, with investments across most economics sectors including: mining, banking, insurance, pension funds, real estate, tourism, explosives, welding, and fishing, among others

The proposed IFC investment consist on (i) a non-revolving credit line of up to US$75 million for IFC’s own account; and potentially (ii) a non-revolving syndicated credit line of up to US$100 million –subject to market conditions

75.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	75.0
Equity

* These investment figures are indicative

Continental is headquartered in Lima and has a branch network of 265 branches, of which 75 are located outside Lima. IFC’s investment can be used to fund loan activities through any of the branches.

(i) Expand access to housing finance, while stimulating demand for labor, materials and other supplies for the housing industry; and (ii) indirectly support the construction and development of small hydropower plants, which will increase the availability of clean energy in the country;

(i) provide long-term financing to support (a) renewable energy projects via small-scale hydropower plants in the country, and (b) housing finance; (ii) provide access to international E&S practices for the assessment of renewable energy projects in Peru; and (iii) mobilization of international funds to support the Bank''s growth

This project is considered to be a Category FI according to the IFC''s E&S review procedure. Under two previous investments (25360 and 26661) BBVA Continental has implemented E&S review procedures to manage E&S impacts of SME and sub-national infrastructure finance. This project will support renewable energy sub-projects, primarily small hydropower plants, which can have potentially high E&S impacts and risks. During appraisal IFC assessed in detail the Bank''s existing capacity to review, identify and manage the E&S risk of such sub-projects, including examples of E&S due diligence. As a subscriber to the Equator Principles, BBVA Continental has procedures in place to review its project finance activities against the IFC’s Performance Standards and the Peruvian national laws. For each sub-project financed as part of the IFC loan, the Bank will conduct an E&S due diligence to identify the applicable E&S risks and require corrective actions as needed to ensure that these risks are managed according to the Performance Standards and applicable laws. As part of supervision of this project, IFC will review the implementation and performance of this procedure for the first few projects and all Category A projects, if any, prior to investment. IFC also reviewed BBVA Continental''s labor practices and concluded that the Bank’s labor policies are aligned with Performance Standard 2: Labor and Working Conditions. The client will be required to: maintain its Environmental and Social Management System (ESMS) and conduct E&S due diligences of all renewable energy sub-projects, to the satisfaction of IFC, to ensure that activities associated with the project are in compliance with the E&S requirements; Identify responsible, qualified staff to manage and implement the ESMS; maintain its commitment to applying the labor standards established by PS2; and submit a periodic report to IFC in a format to be provided by IFC.