Cooperativa de Ahorro y Crédito Pacífico (“Pacífico”)

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Project Number: 
12325-01
Expected Consideration Date by the Board: 
09/14/2018
Date Posted: 
07/24/2018
Company: 
Cooperativa de Ahorro y Crédito Pacífico
Financing Requested: 
Up to PEN32,270,000 (approximately US$10,000,000)
Sector: 
Financial Services
Environmental and Social Category: 
FI-2
Location: 
Peru
Scope Objective: 

The proposed operation includes: a partial credit guarantee of up to 32,270,000 Soles Peruanos (“PEN”) to be issued in favor of a Local Bank to be determined (“LB”). LB will provide a loan in PEN to Cooperativa de Ahorro y Crédito Pacífico (the “Loan”) for up to PEN32,000,000 approximately, and BID Invest will grant a guarantee in favor of LB covering the credit risk of Cooperativa de Ahorro y Crédito Pacífico (“Guarantee”) under the Loan. The Loan will have a term of up to five years and quarterly amortization. The use of funds for the Loan will be to finance Small and Medium-Sized Enterprises (“SMEs”) in the productive sector of Peru.

Environmental Review: 
  1. Overview of Scope of IDB Invest Environmental and Social Review. The Environmental and Social (“E&S”) review of the proposed transaction was carried out through desk research, phone calls with the client, and a portfolio review. Cooperativa de Ahorro y Crédito Pacífico is a new IDB Invest client. On-lending risks are generally considered low. The client has agreed to the development and implementation of an Environmental and Social Management System (“ESMS”). It has initiated this work stemming from a previous Development Finance Institution loan, and will complete it with the assistance of a local consultant.
  1. E&S Categorization and Rationale. The proposed operation is classified as an FI-2 per IDB Invest’s Sustainability Policy. Sub-loans average US$157,000 and are primarily directed real state (19.0%), transport (18,6%), services (17.6%) and commerce (14,3%). A small percentage of their portfolio is focused on agriculture. Category A sub-projects, per IDB Invest’s definition, do not feature under this on-lending program.  
  1. E&S Risks and Impacts The environmental and social risks are likely to be minimal to moderate. Given the targeted sectors, agriculture present potential though limited risks given the small on-lending size. The principle risk and impacts will relate to labor‑specific issues, use of pesticides, and possible land management concerns.
  1. Mitigation Measures. Pacífico will be required to evaluate, manage and monitor E&S risks through the application of an ESMS, which will include application of the exclusion list and local law. The ESMS will include an overarching policy, categorization guide, due diligence check list, legal clauses, and monitoring procedures. Pacífico has initiated an analysis of its portfolio, and will agree to a work plan in undertaking the development and implementation of the ESMS. Pacífico has hired and will retain an E&S manager to oversee operation of the ESMS and individual sub-loan screening. Pacífico has already taken part in IDB Invest’s annual Sustainability Week.
  1. E&S Action Plan:

Task

Description

Deadline

ESMS Plan

Pacífico to agree to an ESMS development and implementation plan with Board approval. Plan will include hiring of consultant for production of ESMS.

Condition precedent to first disbursement

Hiring of external consultant

Pacífico to hire an external consultant to assist in developing and implementing ESMS with focus given to risks present in the productive sector. Pacífico to provide IDB Invest Terms of Reference, scope and timeline of work agreed.

One month after first disbursement

Development of ESMS

Pacífico to develop ESMS consistent with IDB Invest Policy, and in line with IFC Performance Standard 1.

6 months post disbursement

 

Contact Information: 

Client Contact Name: Anthony Miyagusuku
Title: Credit Policies Chief and Portfolio Supervisor
Phone: +511 7192100
Email Address: anthony.miyagusuku@cp.com.pe