PayPoint Services SRL

Location:

Romania

Project number:

51842

Business sector:

Telecommunications, Media and Technology

Notice type:

Private

Environmental category:

C

Approval date:

10 Nov 2020

Status:

Disbursing

PSD disclosed:

06 Apr 2021

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

Up to EUR 25 million senior secured loan provided by the EBRD and a local parallel lender to finance the acquisition of Paypoint Romania by Innova Capital, and thereafter support the company's initiatives to digitalise its consumer payments services.

Project Objectives

Paypoint Romania is a vital and trusted actor in Romania, allowing Romanians to pay their utilities and telecom bills, top-up their mobiles and receive remittances from abroad at the company's collection and sales points. With an extensive network of 19,000 sites across the country, 81% of Romanians live less than 500 metres away from one of the company sites. As Romania is progressively evolving from a cash-based economy to an enhanced use of electronic payment infrastructure (card payments, mobile wallet, etc.), Paypoint Romania accompanies this transition with the launch of new electronic services such as mobile consumer application, automatic vending machines (AVMs) and card-enabled point- of-sale terminals, which provide additional value to consumers and merchants.

Transition Impact

ETI score: 66

-  Under the "Competitive" quality, the acquisition by Innova will trigger operational changes within Paypoint Romania, leading to significant improvements of the company's competitiveness to levels in line with best internationally available standards. These operational changes include the digitalisation of the company's services and extension of the company's services portfolio offered to consumers and retailers.

- Under the "Integrated" quality, the acquisition qualifies as net FDI inflows, which will support the rollout of significant innovative digital services in Romania. This will increase overall access to innovative payment methods, improve merchants' efficiency, and ultimately drive the development of the omni-channel retail market and economic growth.

Client Information

STAR PAYMENTS SRL

Paypoint Romania is the leading over-the-counter bill payments services provider in Romania with a 24% market share and offers additional services, including mobile top-ups and money transfers. New business initiatives and future growth opportunities are related to the digitalisation of the company's services, with the roll-out of mobile consumer application, automatic vending machines (AVMs) and point-of-sales (POS) terminals.

EBRD Finance Summary

EUR 19,000,000.00

Dual-tranche senior secured loan in an amount of up to EUR 19 million, financed by the EBRD.

Total Project Cost

Total Project Cost: (i) Up to EUR 25 million senior secured loan provided by EBRD and a local parallel lender; and (ii) equity contribution from the Sponsor, INNOVA/6 SCA SICAV-RAIF.

Additionality

The Bank is additional through:

(i)   Offering a financing structure that is not available in the market from commercial sources on reasonable terms and conditions, with the EBRD providing a long-term and innovative financing, tailored to the sponsor's needs to implement the value creation plan;

(ii)  The mobilisation of additional commercial funding through a local parallel financing structure otherwise not achievable, via the participation of a local parallel lender;

(iii) High standard-setting whereby the client seeks/makes use of EBRD expertise on higher financial standards, including through financial covenants. The EBRD financing will lead the company to improve its business and financial discipline beyond the current market practices for private companies through the adoption of financial covenants and IFRS audit of financials.

Environmental and Social Summary

Categorised C under the 2019 Environmental Social Policy (ESP) with low risk. Environmental and Social (ES) issues associated with the Bank's lending to the company, a payment technology company, are likely to be limited. ES Due Diligence (ESDD) has been carried out internally using the Bank's Corporate ESDD Questionnaire. Overall, the company shows compliance with PR2 and 4, with a few outstanding points regarding PR9 compliance still under review which will be finalised once the Sponsor has taken control of the company. There is no GET share associated with this transaction.

Technical Cooperation and Grant Financing

N/A

Company Contact Information

Krzysztof Kulig
kkulig@innovacap.com
Innova Capital Rondo ONZ 1, 35th floor 00-124 Warsaw, Poland

PSD last updated

06 Apr 2021

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.

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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.

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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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