Taageer II

Summary of Proposed Investment

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. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.

Project number	28330
Company name	Taageer Finance Company
Country	Oman
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Pend FAP

Date SPI disclosed	October 26, 2009
Projected board date	December 15, 2009

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

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.

Anticipated development impact of the project

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.

IFC's expected development contribution

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.

Environmental and social issues - Category FI

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.

IFC PROJECTS

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