Direct Finance Framework non SME

Location:

Regional

Project number:

48501

Business sector:

Manufacturing and Services

Notice type:

Private

Approval date:

08 Apr 2015

Status:

Approved

PSD disclosed:

01 Jun 2017

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

In January 2021 the EBRD Board will consider a renewal of the annual headroom for the Direct Finance Framework (DFF) Non-SME corporate facility; the headroom amount proposed for 2021 is EUR 800 million.

The majority of investments under this framework, for which approval had been delegated from the EBRD Board to EBRD management, are projects in industry, commerce and agribusiness.

Project Objectives

The framework provides the EBRD with an integrated instrument covering all its countries of operations to meet the growing business needs of local small and medium-sized enterprises currently not sufficiently supported by other financing sources. The Bank's proceeds are used for financing acquisitions, expansion and/or modernisation investments, efficiency improvements as well as working capital.

In April 2015, the EBRD streamlined its direct financing instruments by merging four facilities: (1) the Direct Investment Facility; (2) the Direct Lending Facility; (3) the Local Enterprise Facility; and (4) the Medium-Size Project Facility under a new Direct Finance Framework (DFF).

In 2016, the DFF was separated for internal reporting purposes into two sub-facilities; (1) an SME facility (for Small Business Initiative eligible projects only) and (2) a Non-SME corporate facility with an envelope of EUR 350 million.

In 2017 the Board approved a renewal of the DFF Non-SME facility initially with a EUR 350 million headroom, which was replenished in October 2017 to an annual amount of EUR 600 million.

In 2018, the framework had an total annual headroom if EUR 600 million. Headroom for 2019 was increased to EUR 750 million as a result of the higher expected Bank business volume. In 2020, headroom was further increased to EUR 900 million to accommodate the Bank's future business needs.

Transition Impact

ETI score: null

The expected Transition Impact for DFF Non-SME projects is determined on a project-by-project basis. The main qualities of the expected transition impact for projects under the DFF Non-SME facility include but are not limited to: (1) Competitive, (2) Integrated, (3) Green.

Client Information

Local private enterprises operating in all EBRD countries of operations.

EBRD Finance Summary

EUR 800 million 

Total Project Cost

EUR 800 million 

Additionality

The additionality of the DFF Non-SME usually derives from the following sources:

1) Financing Structure: (i) EBRD offers financing that is not available in the market from commercial sources on reasonable terms and conditions which are necessary to structure the project; (ii) EBRD offers a tenor which is above the market average and is necessary to structure the project.

 2) Risk mitigation: (i) EBRD provides comfort to clients and investors by mitigating non-financial risks; (ii) EBRD's long-term relationships with a client provides comfort to the client to be willing to take on more risk and/or finance, enabling outcomes such as innovation or expansion into new markets.

3) Standard setting: (i) Client seeks/makes use of EBRD expertise on corporate governance improvements, including for climate risk management; (ii) Client seeks/makes use of EBRD expertise over energy and resource efficiency and climate resilience financing via provision of energy and climate audits, minimum performance standards of technologies, climateirelated strategies and policies, monitoring, reporting and verification (MRV) systems etc; (iii) Client seeks/makes use of EBRD expertise on higher inclusion and gender standards and/or equal opportunities action plans.

Environmental and Social Summary

Sub-projects financed through this framework are categorised and appraised on a case-by-case basis in accordance with the Bank's 2019 Environmental and Social Policy. Where the Bank is investing in projects or companies that present a potentially higher environmental and/or social risk, commensurate studies will be carried out with assistance from external consultants to fully understand all related liabilities and risks associated with a company's operations, as well as to develop and agree upon an environmental and social action plan as required. Further, the environmental and social due diligence undertaken on a case by case basis will look to identify and/or confirm potential environmental and social benefits to be realised through the delivery of the projects. Target borrowers/investee companies will be required to comply with the Bank's Performance Requirements and provide the Bank with an annual report on environmental and social issues.

Sub-projects financed through this framework are not subject to Board approval. PSDs will be released on a project-by-project basis including summary information on the sub-project's significant environmental or social issues and agreed mitigation measurse. No "Category A" projects will be approved under this Framework. 

Technical Cooperation and Grant Financing

There is no Technical Cooperation funds raised specifically for the DFF Non-SME facility.

Company Contact Information

For business opportunities or procurement, contact the client company.

PSD last updated

14 Dec 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

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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