Supply Chain Solutions Framework

Location:

Regional

Project number:

52501

Business sector:

Agribusiness

Notice type:

Private

Environmental category:

FI

Approval date:

09 Jun 2022

Status:

Approved

PSD disclosed:

04 May 2022

Project Description

The establishment of a Supply Chain Solutions Framework (the "Framework") with an overall limit of up to EUR 150 million. Under the Framework, the EBRD will participate through unfunded and funded risk-sharing arrangements ("Facilities") with partner banks ("Partner Banks") in the supply chain finance programmes they extend to large companies known as "aggregators" ("Anchor Buyers") with suppliers based in EBRD countries of operations ("CoOs"). The Framework will cover multiple business sectors.

Project Objectives

The objectives of the Framework are threefold: (i) provide suppliers in EBRD CoOs, particularly SMEs, with better and more affordable access to working capital finance; (ii) facilitate the alignment of Anchor Buyers and their suppliers alike (particularly SMEs) with best practice ESG standards that make the supply chains in EBRD CoOs to which they form part more sustainable and resilient and (iii) serve as a mechanism through which the EBRD can provide emergency liquidity to supply chains in its CoOs during crises. Framework headroom will be allocated to Facilities under which the EBRD will undertake funded and/or unfunded risk participations in individual supply chain finance programmes ("Sub-deals").

Transition Impact

ETI score: 65

Transition impact ("TI") for the Framework and its operations (i.e., Sub-deals) will stem from the Competitive (primary), Well-governed, and Inclusive qualities. Sub-deals will need to target the Competitive quality and one of either the Well-governed or Inclusive qualities. In particular, the Framework will support:  

  1. Competitive: access to affordable and timelier working capital finance and improved standards for integration into sophisticated value chains for suppliers in EBRD CoOs, with a particular focus on SMEs.
  2. Well-governed: the application of higher ESG standards at the Anchor Buyer and supplier levels, including as it relates to improving climate corporate governance and implementing accountability mechanisms for greening and decarbonising supply chains.
  3. Inclusive: activities that improve the inclusiveness of Anchor Buyer supply chains and/or improve supplier standards that address specific inclusion gaps in their respective components of their supply chains or countries. 

EBRD Finance Summary

EUR 150,000,000.00

Total Project Cost

EUR 150,000,000.00

Additionality

The additionality of the EBRD's operations under the Framework stems from the EBRD ability to offer a large volume instrument that fills market gap, as supply chain financing is at a relatively nascent stage of development in the EBRD's CoO. Due to the innovative financing structure, EBRD will be in a position to promote the rollout of a financial product in its CoOs that provides affordable, timely, and accessible working capital finance solutions to suppliers. Furthermore, the financing structure mobilises additional commercial funding thereby facilitating more finance to suppliers in EBRD's CoOs, including SMEs. Through its Advice for Small Business programme, EBRD provides expertise, innovation, knowledge and/or capabilities to suppliers in the EBRD CoO that are material to the timely realisation of the project objectives to support the alignment supply chains with best practice ESG standards.

Environmental and Social Summary

The Framework and Facilities are not categorised but the sub-projects (i.e., Sub-deals) will be Category FI (2019). Under the Framework, by sharing the risk of Anchor Buyers through funded and unfunded participations, the Bank will indirectly be exposed to any environmental and social risks associated with the Sub-deals. Therefore, the Partner Banks under the Framework will be required to comply with EBRD's PRs 2, 4 and 9 and submit Annual E&S Reports to the Bank and if necessary implement the EBRD's E&S Risk Procedures (which will be designed for the Framework), which will include any specific environmental and social due diligence provisions for the Sub-deals under the Framework. For relevant Sub-deals (for example higher risk transactions), an applicable environmental checklist will need to be forwarded to ESD for review Sub-deals under the Framework may have ESG uplifts and GET components and will be reviewed on a case-by-case basis.

Technical Cooperation and Grant Financing

Donor funds may be deployed on a case by case basis, with the proceeds supporting, amongst others, the delivery of bespoke advisory and training activities under the EBRD's ASB framework, rollout of sustainable supply chain finance programmes that deliver financial incentives to suppliers, including SMEs, which meet defined ESG-linked targets/criteria, and the provision of technical assistance to eligible Anchor Buyers to facilitate a "top-down" approach with regard to embedding sustainability and resilience in supply chains running through the EBRD's CoOs.

Company Contact Information

Onur Bingol
BingolO@ebrd.com

PSD last updated

01 Jun 2022

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

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

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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