|
|  |
| Promerica CR Energy Efficiency Line |
|
| 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 | 26344 |
| Company name | Banco Promerica de Costa Rica, S.A. |
| Country |
|
| Sector | Commercial Banking - General |
| Environmental category | FI |
| Department | Reg Ind, Financial Markets, CAF/CLA |
| Status | Active |
|
| Date SPI disclosed | February 2, 2010 |
| Projected board date | March 4, 2010 |
| Previous Events | Invested: June 29, 2010
Signed: March 30, 2010
Approved: March 24, 2010 |
|
| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project consists of a $6 million credit facility for Banco Promerica de Costa Rica, S.A. (the “Bank”), a private Costa Rican bank, subsidiary of Promerica Financial Group (“PFC”). The proceeds from the transaction will be used to increase, diversify and lengthen the Bank’s funding base by obtaining medium-term funding for on lending to sustainable finance (SF) sub-projects. Banco Promerica is the fifth largest private bank in Costa Rica in terms of assets with $444 million as of December 31, 2009. |
|
| Project sponsor and major shareholders of project company |
| PFC comprises financial, real estate and retail businesses operating in the Central American and Caribbean regions. PFC includes operations in Costa Rica, El Salvador, Honduras, Nicaragua, Guatemala, Dominican Republic, Panama and Ecuador. Each country has a common shareholder (Ortiz family) as well as different local shareholders, and the entities are managed independently. |
| Total project cost and amount and nature of IFC's investment |
| The proposed investment is a $6 million secured senior loan for IFC’s account. |
| Location of project and description of site |
| The Bank is headquartered in San Jose and has a network of 15 branches and 50 ATMs mainly in the urban areas. IFC’s proposed investment can be used to fund SF loan activities through any of the Bank’s branches. |
|
| Anticipated development impact of the project |
| The anticipated development impact of this project is to foster growth in the SF sector by increasing the number of loans to SF sub-projects and the growing the Bank's SF portfolio. |
 |
| IFC's expected development contribution |
a) Investment in Locally-Owned Bank. Half of the private banks operating in Costa Rica are foreign owned. Increasing regulatory demands and the entry of international deep-pocket players will likely lead to a consolidation in the financial sector. IFC's financing will support Promerica's efforts to better face its new competitive pressures by further penetrating the SF sector and strengthening its balance sheet by matching their tenors for their long-term financing.
b) Long-Term Funding. Providing access to long-term finance to SFs, who have limited or no access to financing.
c) Access to Finance. Costa Rica has a large SF sector, which is credited with contributing 28% of their GDP. However, loans to SFs are limited and at a high cost.
Additionality
IFC's funds will support the Bank's expansion in the SF market. IFC's investment would thus help the Bank to further expand into SF lending, which is severely underserved. |
| Environmental and social issues - Category FI |
This project involves IFC support for a bank in Costa Rica, Banco Promerica, for Sustainable Finance projects (energy efficiency, cleaner production, renewable energy) and has been classified as a Category FI project. IFC will review the proposed investment portfolio and determine the Applicable Requirements, which may include a combination of the IFC exclusion list, the national E&S laws of the Costa Rica and the IFC Performance Standards.
The Bank is also required to: (i) develop a Social & Environmental Management System (SEMS), prior to disbursement to the satisfaction of IFC; (ii) identify responsible, qualified persons to manage and implement the SEMS; (iii) commit to implement the SEMS, to ensure that its investments are in compliance with the Applicable Requirements; (iv) demonstrate commitment to applying the labor standards established by the IFC Performance Standard 2; and (v) submit a periodic report to IFC. |
|
| For inquiries about the project, contact: |
John Keith, CEO
El Cedral, Escazu, Trejos Montealegre,
San Jose, Costa Rica. 1289-1200
Fax Number
(506) 2505-7501
Website
www.promerica.fi.cr |
|
| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
|
|
|
|
|