BTPN Convertible

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	28038
Company name	Bank BTPN
Country	Indonesia
Sector	Finance & Insurance
Environmental category	FI
Department	Global Financial Markets Group
Status	Pending Disbursement

Date SPI disclosed	May 8, 2009
Projected board date	June 10, 2009
Previous Events	Signed: September 25, 2009 Approved: June 29, 2009

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The proposed project will likely consist of IFC loan financings in USD or IDR to Bank BTPN (“BTPN” or the “Company”). The proposed investment is consistent with all aspects of IFC’s strategy in the financial sector, particularly in increasing access to financial services for the underserved, the micro and small business enterprises and low income households.

The project would represent a stable source of funding which would help BTPN to:

- Expand its micro-banking business to serve mass market and low-income customers.
- Strengthen its funding base in order to reduce asset and liability mismatch.

Project sponsor and major shareholders of project company

TPG Nusantara:

TPG Nusantara is a consortium comprised of Texas Pacific Group (“TPG”), Northstar Pacific (“Northstar”), The Government of Singapore Investment Company (“GIC”) and Noonday Asset Management (“Noonday”). The consortium owns 71.61% of bank Bank BTPN.

TPG:
TPG is a leading global private investment firm with over $50 billion of capital under its management.

Northstar:
Northstar, the local affiliate of TPG, was founded in 2003 by Patrick Walujo and Glenn Sugito as a Jakarta-based merchant bank engaged in principal investment as well as corporate finance advisory.

GIC:
In addition to ownership of BTPN through the TPG Nusantara consortium, GIC directly owns an additional 5% of BTPN. GIC is a global investment management company established in 1981 to manage Singapore's foreign reserves. With a network of eight offices in key financial capitals around the world and above US$100 billion under its management, GIC invests internationally in equities, fixed income, foreign exchange, commodities, money markets, alternative investments, real estate and private equity.

Noonday Asset Management:
Noonday manages discretionary capital for institutional investors and high net worth individuals through its relationship with Farallon Capital Management.

All remaining shares are publicly owned.

Total project cost and amount and nature of IFC's investment

The total project cost is estimated at $70 million. The proposed project will likely consist of IFC loan financings in USD or IDR on IFC’s own account to BTPN, with the stipulation that BTPN does not take any foreign exchange risk.

Location of project and description of site

BTPN is headquartered in Bandung, West Java, Indonesia and has over 500 outlets located throughout Indonesia. Over 400 outlets are dedicated to the pension business and over 100 are dedicated to the micro banking business. BTPN plans to open more micro banking branches throughout Indonesia in 2009. The proposed investment will support BTPN’s growth plans throughout the country.

Anticipated development impact of the project

The expected Development Impact from the project are as follows:

1. Strengthening the Microfinance Sector

The microfinance sector in Indonesia is largely underdeveloped, characterized by low penetration and industry fragmentation. Supporting a new entrant run by experienced management in the microfinance sector with expansion plans in the frontier and underserved locations of Indonesia would allow IFC to support and strengthen the Indonesia microfinance sector.

2. Create Significant Job Opportunities

BTPN plans to hire additional thousands of employees to support its new microfinance outlets. The project results in job creation within BTPN, supports microfinance business growth, and provides opportunities for the potential emergence of micro-entrepreneurs, thus also supporting job creation in the microfinance sector.

IFC's expected development contribution

The proposed project allows IFC to play an active role as:

1. Supporter of BTPN’s Entrance to the Microfinance Sector:

Microfinance is a new market for BTPN. In addition to supporting BTPN in funding needs and in managing asset liability mismatch risks, IFC is offering international best practices particularly in the areas product development, operations and risk management in microfinance.

2. Promoter of Microfinance to the Underserved Areas:

With its entrance to the microfinance sector, BTPN will target underserved areas where the incumbents have limited presence, i.e. the frontier areas and eastern part of Indonesia. With this project, IFC will support BTPN to achieve its expansion plan to these underserved locations.

Environmental and social issues - Category FI

This project has been classified as Category FI. Applicable requirements include IFC FI Exclusion List. The client will be required to have a functional Social and Environmental Management System (SEMS) approved by IFC, and appoint an Environmental and Social officer to ensure sound execution of the SEMS. The client will need to submit annual environmental performance reports to IFC according to an IFC-approved reporting format.

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