AAIB - SME loan, EgyptSEFF loan, trade finance

Overview
Project Summary Document
Environmental and Social Documentation
Procurement
Complaints

Project ID 48658

Status Complete

Location

Egypt

Business Sector

Financial Institutions

Notice Type

Private

Project timeline

Exploratory
Passed Concept Review
Passed Structure Review
Passed Final Review
Board Approved
Signed
Implementing
Completed

Project ID 48658

Status Complete

Location

Egypt

Business Sector

Financial Institutions

Notice Type

Private

Environmental Category

Approval Date

28 Nov 2018

Disclosure date

14 Jun 2017

As per section 1.4.2 (iii) of the Directive on Access to Information: "For Projects approved by Bank management where the Board of Directors has delegated the approval authority, the PSD shall be disclosed at the start of the relevant no-objection notification period to a member country of the Bank in accordance with Article 13 (iii) of the Agreement Establishing the EBRD."

Translated version of this PSD: Arabic

Project Description

The project consists of a financing package of up to USD 110 million to Arab African International Bank ("AAIB").

The facility will comprise (i) a senior loan of up to USD 30 million for on-lending to private small and medium enterprises ("SMEs"); (ii) a senior loan of up to USD 30 million under the Egypt Sustainable Energy Financing Facility ("EgyptSEFF"), of which up USD 15 million is expected to be co-financed by either the Agence Francaise de Developpement ("AFD") or the European Investment Bank ("EIB") under the same conditions; and (iii) a trade finance limit of up to USD 50 million for guarantees and cash advances.

EgyptSEFF is a comprehensive financing facility programme in the amount of up to EUR 140 million for sustainable energy investments. The funds will be made available to Participating Financial Institutions ("PFIs") in Egypt for on-lending to eligible private sector sub-borrowers for sustainable energy investments. The facility will promote penetration of energy efficient ("EE") and renewable energy ("RE") technologies, appliances and equipment in Egypt by stimulating demand and raising awareness of the benefits of investments in such technologies.

Project Objectives

The EBRD loan will enable AAIB to develop its SME lending activities and expand access to finance for underserved private SMEs, and to support on-lending to private sub-borrowers for EE and RE projects, which are of particular relevance in the context of high energy intensity of the Egyptian economy.

Transition Impact

The SME loan will increase the availability of finance to private SMEs allowing greater access to finance for this largely underserved segment.

The EgyptSEFF loan will generate transition impact by promoting expansion of lending into energy efficiency and renewable energy in Egypt. It will have positive demonstration effects particularly with respect to utilising financial intermediaries for energy efficiency and small renewable energy investments.

In addition, the project will contribute to the development of the internal capacity of AAIB for financing energy efficiency and renewable energy projects. This will be achieved by dedicated technical assistance, providing training to loan officers and helping AAIB with product design and the establishment of the necessary procedures, tools and structures for financing energy efficiency improvements.

Client Information

ARAB AFRICAN INTERNATIONAL BANK

AAIB is the fifth-largest bank in Egypt. The bank has market shares of 5% by loans and 4.5% by deposits.

EBRD Finance Summary

Up to USD 110 million in total financing, of which:

(i) up to USD 30 million SME loan;
(ii) up to USD 30 million EgyptSEFF loan (of which up to 15 million to be cofinanced by either EIB or AFD); and
(iii) up to USD 50 million trade finance limit.

Total Project Cost

USD 110,000,000.00

Environmental and Social Summary

Categorised FI (2014). AAIB will be required to comply with PRs 2, 4 & 9. Under the SME Loan the client will be required and apply the EBRD's E&S Procedures for Corporate and Small Loans and submit annual environmental and social reports to the EBRD. All projects under EgyptSEFFwill be required to comply with the national environment, health and safety and labour regulations and standards as well as the E&S eligibility criteria for RE and EE sub-projects. This will be confirmed to AAIB by a Project Consultant who will be hired by the EBRD to cover this issue. AAIB will be required to confirm compliance with the E&S requirements as well as the PRs by providing annual environmental and social reports to the Bank.

Technical Cooperation

The loan may be supported by technical cooperation to assist AAIB to develop a new SME business unit and to enhance its capacity and know-how in SME lending, including a review of its product range and risk management approaches.

AAIB will benefit from the support of the grant resources from the European Union's Neighbourhood Investment Facility and funds from the EBRD Shareholder Special Fund provided under the EgyptSEFF framework. Donor funds will support a comprehensive technical assistance programme to provide (i) implementation support AAIB and its customers, and (ii) verification of the outcome of completed projects, as well as investment incentives to AAIB and end borrowers.

Company Contact Information

Mr. Mohsen M. Rashad
mohsenrashad@aaib.com
+202 27961743
+202 27912692
www.aaib.com
5 Midan Al Saray Al Koubra, Garden City, Cairo, Egypt

Transition impact

ETI Score:60

PSD last updated

07 Nov 2019

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Environmental and Social Documentation is not available for this project.

Selected procurement notices related to this project may be shown below. Further procurement opportunities related to this and other projects, if available, maybe be viewed in the EBRD Procurement Portal.

The EBRD's Environmental and Social Policy (ESP), Access to Information policy (AIP) and Project Accountability Policy (PAP) enable sound and sustainable development in its projects. The Independent Project Accountability Mechanism (IPAM) deals with complaints about environmental, social and disclosure matters related to the Bank’s investments.

No complaints about this project have been made so far.

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