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| This Summary of Project Information 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. |
Summary of Project Information (SPI) |
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| Project number | 9936 |
| Project name | SEF Tajik Sodir Ot Bonk |
| Country | Tajikistan |
| Sector | Finance & Insurance |
| Department | Global Financial Markets Group |
| Company name | Tojiksodirotbonk |
| Environmental category | FI |
| Date SPI disclosed | May 8, 2000 |
| Projected board date | June 15, 2000 |
| Status | Completed |
| Previous Events | Invested: April 4, 2002
Signed: November 14, 2001
Approved: June 20, 2000 |
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| Project sponsor and major shareholders of project company |
Tajik Sodirotbank's (TSB) current shareholding is diverse and fragmented with no shareholder owning more than 14.2% of the bank, as of November 30, 1999. The total government shareholding is 13.7% including a 10.2% shareholding by the Ministry of Finance. The three largest single shareholders are foreign companies. The shareholding structure is as follows:
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| Total project cost and proposed IFC investment |
| IFC's investment is in the form of an equity investment of up to $500,000, which will represent up to 20% of the total share capital. |
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| Location of project and description of site |
| TSB is headquartered in Dushanbe and has 5 branches across Tajikistan. Investments can be made throughout the country. |
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| Description of company and purpose of project |
The project consists of an equity investment of up to $500,000 in Tajik Sodirotbank, which will represent up to 20% of the share capital. The proceeds of the IFC investment would be used by TSB to:
- strengthen its capital base, and
- increase available funding to support the anticipated growth in private sector and SME lending.
The IFC investment would be part of a larger recapitalization program that will increase the Bank's capital from $1.14 million to $3 million equivalent. Other prospective investors include the European Bank for Reconstruction and Development (EBRD) for 15% to 20% of capital and the Agha Khan Fund for Economic Development (AKFED), which has expressed interest to subscribe for 25% to 30% of capital. There will also be a capacity building technical assistance program that will strengthen the bank's operations and bring them in line with sound banking principles.
IFC's key role in the financial sector has three objectives. First, IFC seeks to encourage and support institution-building by focusing on the following priority areas:
- help develop new and efficient private sector companies;
- establish commercially viable intermediaries capable of mobilizing and allocating domestic savings for use by these private companies; and
- assist in employment generation.
Furthermore, the project will set standards of corporate governance and business conduct and discourage government interference. IFC's involvement, in partnership with EBRD and AKFED, will foster the institution-building role through the Technical Co-operation (TC) program approved by the EBRD and AKFED's active involvement in the operations of the bank. Third, IFC’s involvement will act as a catalyst for more Foreign Direct Investment (FDI). Over the years, Tajikistan has attracted very little FDI. No foreign banking institution has to date invested in the Tajik financial sector and no strategic or financial investor is presently willing to take such initiative on its own. The success of the project should encourage other investors, who are currently reluctant to do business in the country, to invest in Tajikistan as the perceived risk diminishes. |
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| Environmental and social issues - Category FI |
This is an FI Type 1 project according to IFC's Environmental and Social Review Procedure. TSB must ensure that activities financed under relevant operations (e.g. corporate lending) comply with the applicable environmental, health and safety and child labor requirements of Tajikistan. To this end, TSB will undergo environmental capacity building as required by IFC and develop an environmental management system. TSB will provide IFC an annual environmental performance report for the duration of the project.
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| To contact the project company, please write to: |
Mr. Izatullo Lalbekov
4 Ostrovskogo Street
734012 Dushanbe
Republic of Tajikistan
Telephone: 3772 - 233 561
Fax: 3772 - 233 932 |
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