FIF - Green Loan to ProCredit Holding AG & Co. KGa

Location:

Regional

Project number:

50613

Business sector:

Financial institutions

Notice type:

Private

Environmental category:

FI

Approval date:

13 Oct 2020

Status:

Approved

PSD disclosed:

14 Oct 2020

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

The project will support PCH to meet growing client demand for green financing in SEE and provide much needed funding to finance the continued growth of the its green loan portfolio (CAGR of 34% over 2016 - 2019). As will be mandated under the Policy Statement, EBRD funding will be used by PC Serbia and PC Romania to extend loans to local SMEs in line with the objectives of the FIF.

 

Project Objectives

Senior unsecured term loan of up to EUR 20 million to PCH for on-lending to eligible Sub-borrowers by ProCredit Serbia ("PC Serbia") and ProCredit Romania ("PC Romania"). The Borrower will undertake to ensure that the amount of this facility (i.e. EUR 20 million) will be on-lent by PC Serbia and PC Romania to eligible sub-borrowers within a two-year period, in line with the eligibility criteria under PS. The financing will be aligned with the ProCredit Holding Green Bond framework as well as with the EBRD GET approach. The EBRD investment will support business development and SME lending in Serbia and Romania in line with the objectives of the Financial Intermediaries Framework ("FIF").

Transition Impact

ETI score: 60

The project contributes to the objectives of the FIF, supporting the Competitive and Resilient transition qualities. FIF seeks to:

(i) Foster SME competitiveness by increasing availability of financing; and contribute to the competitiveness of financial institutions by enabling innovation in strategy, products, processes and marketing related to SME lending.

(ii) By ensuring that banks and other financial institutions have adequate underwriting and risk management practices in place, the FIF also seeks to encourage sustainable lending practices, supporting the resilience of the financial system.

 

Client Information

PROCREDIT HOLDING AG & CO KGAA

ProCredit Holding AG & Co. KGaA (the "Company", "PCH"), a partnership limited by shares incorporated in Germany. PCH is a banking group focusing on financing SMEs, with diversified operations via 12 banking subsidiaries, out of which 93% of loan portfolio is located in South-Eastern Europe (70%) ("SEE Region") and Eastern Europe (23%) - coinciding with 10 EBRD countries of operations. The rest of operations are in South America i ProCredit Bank Ecuador (6%) and Germany (1%).

EBRD Finance Summary

EUR 20,000,000.00

Total Project Cost

EUR 20,000,000.00

Additionality

The Bank is additional because of its Terms: (i) the Bank's support is considered instrumental in successfully meeting PCH's growing client demand for green financing, and (ii) in providing adequate financial resources for PCH to expand its SME lending operations. Attributes: EBRD has significant experience in supporting the SME lending and is an experienced participant in GET-eligible financing of financial institutions; Conditionalities: EBRD's proceeds will be channelled towards financing SMEs in the SEE Countries.

Environmental and Social Summary

Categorised FI (2014 ESP). ProCredit is an existing client to the Bank and will continue to comply with EBRD's Performance Requirements 2, 4 and 9, including the application of an adequate environmental and social risk management system (ESMS), adherence to the E&S Risk Management Procedure for Micro, SME and Corporate Lending, as well as EBRD's Environmental and Social Eligibility Criteria for Wind, Solar, Biomass, Hydro and Geothermal Energy, as applicable. The ESMS has been implemented at each subsidiary and covers 3 pillars: internal environmental management, management of environmental and social risks in lending and green finance. ProCredit's current Green project portfolio is app. EUR 874 million and has grown 34% CAGR in 2016-2019 and further 10% in 1H2020. The Agreement between ProCredit and EBRD will include a commitment to allocate the EBRD investment amount to the SEE Countries to extend new loans to local SMEs. The project is consistent with the GET approach and the GET share is 100%.

Technical Cooperation and Grant Financing

None.

Company Contact Information

Martin Godemann
Martin.Godemann@procredit-group.com
+ 49 (0)69 951 437 160
+ 49 (0)69 951 437 168
www.procredit-holding.com
ProCredit Holding AG & Co. KGaA Rohmerplatz 33 - 37 60486 Frankfurt am Main, Germany

PSD last updated

14 Oct 2020

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Tel: +44 20 7338 6794
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General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.

 

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