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| PEEP - BPI |
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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 | 26934 |
| Company name | Bank of the Philippine Islands |
| Country | Philippines |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pending Signing |
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| Date SPI disclosed | August 28, 2009 |
| Projected board date | September 28, 2009 |
| Previous Events | Approved: November 17, 2009 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
The project entails a risk sharing facility (“the Facility”) of up to $20 million equivalent to the Bank of the Philippine Islands (“BPI” or the “Bank”).
The Bank is the third largest universal bank in the Philippines in terms of total assets. The Bank is a publicly listed domestic universal bank offering a wide range of financial services that include corporate, consumer, overseas and investment banking as well as asset management and insurance.
This Facility builds upon the Sustainable Energy Finance Program (“SEF Program”) launched in 2008. SEF program’s aim has been to establish partnerships with local banks using financial products and technical advisory to increase funding to renewable energy (“RE”) and energy efficiency (“EE”) projects. |
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| Project sponsor and major shareholders of project company |
The two main shareholders of BPI are Ayala Corporation and Development Bank of Singapore.
Ayala Corporation (“AC”)
AC is the flagship company of the Ayala family, a successful business group in the country. AC’s four core businesses are real estate (through Ayala Land Inc.), financial services (through BPI), telecommunications (through Globe Telecom, Inc.) and a portfolio of other investments.
Development Bank of Singapore (“DBS”)
DBS, established in 1968, is a full service bank and an integral part of DBS Group Holdings Ltd. The group is one of the largest banking groups in Asia-Pacific. |
| Total project cost and amount and nature of IFC's investment |
| The total size of the Facility is estimated to be $20 million. Under the proposed terms of the Facility, BPI would be responsible for generating a portfolio of loans that satisfy certain criteria to be set by the Bank and IFC after the appraisal. IFC’s participation would involve guaranteeing the risk on 50 percent of that loan portfolio, which would include support from the Global Environment Facility ("GEF"). |
| Location of project and description of site |
| BPI is headquartered in Makati City, Philippines. The Bank network is the largest in the country with 831 branches. |
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| Anticipated development impact of the project |
Development Impact
The following development benefits are expected:
IFC is contributing to the development and diversification of the financial sector by assisting in the development of new markets and product lines with significant growth potential.
IFC’s project complements BPI’s strategy to support the EE and RE sectors and will enable the Bank to manage risk and grow its EE and RE assets at a faster pace than it would on its own.
Environmental and social benefits: The Philippines is heavily dependent on energy as an input and has one of the highest electricity rates in the region. The project will contribute to increasing efficiency in industry and reduce operating costs. In addition, the project will also contribute to pollution reduction by increasing usage of more efficient technologies with fewer harmful side-effects. |
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| IFC's expected development contribution |
| The risk sharing facility, combined with IFC’s technical support in the EE and RE sectors, will position BPI to lead the effort to provide much needed financing to companies in various industry sectors that will support EE and RE growth throughout the country. |
| Environmental and social issues - Category FI |
This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC will analyze the participating bank’s portfolio/pipeline activities proposed to be supported by this facility and determine the Applicable Requirements which may include: IFC FI Exclusion List; applicable National Social and Environmental laws and regulations; and/or IFC Performance Standards.
IFC will also review the capacity of the bank to manage social and environmental (S&E) risks through its S&E Management System (SEMS) for accounts under the RSF. IFC may suggest Supplemental Actions to address any gaps in the SEMS. The project may be required to:
- Develop a Social & Environmental Management System (SEMS) to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS in compliance with applicable performance requirements; and
- Submit an annual report to IFC as per an agreed format. |
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| For inquiries about the project, contact: |
Ms. Georgia Gamboa
Bank of the Philippine Islands
BPI Building
Ayala Avenue Corner Paseo de Roxas
Makati City, Philippines |
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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 |
| Local access of project documentation |
International Finance Corporation
11F Tower One, Ayala Triangle
Ayala Avenue, Makati City
Philippines |
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