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| RespublikaII |
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| 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 | 28380 |
| Company name | JSC Bank Respublika |
| Country | Azerbaijan |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Disbursement |
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| Date SPI disclosed | August 18, 2009 |
| Projected board date | September 20, 2009 |
| Previous Events | Signed: September 25, 2009
Approved: September 23, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed transaction consists of a senior loan of up to $20 million to Bank Respublika Open Joint Stock Company (the “Bank” or “Respublika”) for on-lending to micro, small and medium enterprises (“MSMEs”). IFC has previously provided a senior loan to Respublika for SME lending as well as a trade line under the Global Trade Facility Program. |
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| Project sponsor and major shareholders of project company |
| Respublika was established in 1992 as a private commercial joint-stock bank, and offers universal banking services to retail and corporate segments, through a network of 33 branches and service points. It is the sixth largest private bank in Azerbaijan (the “Country”) by total assets in the amount of $478 million and a net loan portfolio of $312 million as of December 31, 2008. The Bank is 75% owned by the Guliyev family. Two major German financial institutions, DEG, a subsidiary of KfW and SIDT own 16.67% and 8.3% respectively. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is a $20.0 million senior loan for the IFC’s own account. |
| Location of project and description of site |
| The Bank is headquartered in Baku, Azerbaijan, and operates through its network of 33 branches and offices located in the capital city Baku and throughout Azerbaijan’s regions. |
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| Anticipated development impact of the project |
The successful implementation of this project will:
-address the long-term funding needs of the MSME sector in Azerbaijan;
-develop financial intermediation by supporting the growth of different financial products and services serving MSME clients; and
-yield significant developmental and economic benefits for the private sector and the whole economy. |
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| IFC's expected development contribution |
IFC’s developmental contribution is expected to be in the following areas:
-support the Bank to upscale its lending activities to MSMEs;
-provide longer-term funding to the underserved MSME segment, which may not be able to obtain financing from commercial sources; and
-have a positive impact on employment, private sector development and economic growth in the Country. |
| Environmental and social issues - Category FI |
For this Category FI project and as part of IFC's revised Environmental and Social Review Procedure, IFC's appraisal will focus on whether Respublika's risk management systems and capacity are appropriate for performing the necessary social and environmental due diligence against the applicable performance requirements and if the Bank's labor practices are appropriate according to IFC standards.
As an existing IFC client, Respublika has a Social and Environmental Management System (“SEMS”) and has appointed a SEMS Officer to review compliance against the applicable performance requirements.
The Bank will be required to upgrade its existing SEMS prior to disbursement to the satisfaction of IFC. Based on the review, the Bank will also be required to demonstrate commitment to applying the labor standards required by IFC. |
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| For inquiries about the project, contact: |
Mr. Aslan Abasov
Deputy Chairman of the Executive Board
21 Khagani Street AZ 1000 Baku, Azerbaijan
Tel: +99412 598 0800
Fax: +99412 598 0880 |
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| 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 |
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