Avla Chile WHL (IDBI-12872-01)

Countries
  • Chile
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • IDB Invest (IDBI)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
FI
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Mar 3, 2021
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
AVLA Seguros de Crédito y Garantía S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee, Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 40.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Loan Amount (USD)
$ 40.00 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ IDBI website

Updated in EWS Jun 19, 2021

Disclosed by Bank Nov 13, 2020

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Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

The proposed project includes a financing mechanism that will consist on a senior, secured, revolving warehouse facility of up to US$40 million, whose proceeds will be used to purchase and accumulate eligible endorsable mortgage loans or other similar instruments to small and mid-sized companies in Chile for a future asset backed securitization. The transaction will support and improve SMEs access to financing in Chile, narrowing the current financing gap that is increasing due to the COVID-19 crisis, and will help further expand debt capital markets in the country through new issuances of asset backed securities. The proceeds from the line will allow AVLA Group to expand its SMEs' credit insurance business segment. The warehousing facility may support several accumulation periods, for a maximum of six years.

The sub-loans are expected to average US$400,000 with a tenor of roughly four (4) years.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.



      1. Scope of Environmental and Social Review. AVLA is a new client of IDB Invest and does not have an operating Environmental and Social Management System (“ESMS”).  As a condition of this operation, AVLA will develop and implement an ESMS, and appoint a team member with the necessary capacity to manage and supervise E&S risk.

 

      1. Environmental and Social Categorization and Rationale. The proposed operation is classified as an FI-2 per IDB Invest’s Sustainability Policy, given the primary focus on SMEs. Category A sub-projects, per IDB Invest’s definition, will be excluded.

 

      1. Environmental and Social (E&S) Risks and Impacts. The main E&S risks of this projects are associated with AVLA’s capacity to identify and manage the E&S risks associated with its activities.  The Environmental Social Health and Safety (“ESHS”) impacts and risks associated with loans to SMEs are likely to be moderate in nature.  AVLA’s portfolio is concentrated in commerce and services (62%), as well as exposure to construction (12%), agriculture (13%), and manufacturing (5%).   

 

      1. Mitigation Measures. AVLA does not currently have an ESMS and will develop one..  The ESMS will apply at a minimum to the financial guarantee and private credit insurance business lines.  AVLA will be required to ensure that all loans supported under the operation comply with IDB Invest’s Exclusion List, applicable E&S local laws, and the ESMS.  Sub-loans will be limited to US$2 million. The scope of the ESMS is defined in the below action plan.

 

      1. Environmental and Social Action Plan https://idbinvest.org/en/projects/avla-chile-whl 



Investment Description
Here you can find a list of individual development financial institutions that finance the project.

Loan & Guarantee

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

Borrower: AVLA Seguros de Crédito y Garantía S.A. 


Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

Contact name: Luis Bryce
Title: Global Head of Capital Markets
Phone number: +51 952 136 539
Email address:
lbryce@avla.com

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://www.iadb.org/en/access-information/information-request

ACCOUNTABILITY MECHANISM OF IDB / IDB INVEST

The Independent Consultation and Investigation Mechanism (MICI) is the independent complaint mechanism and fact-finding body for people who have been or are likely to be adversely affected by an Inter-American Development Bank (IDB) or Inter-American Investment Corporation (IDB Invest)-funded project. If you submit a complaint to MICI, they may assist you in addressing the problems you raised through a dispute-resolution process with those implementing the project and/or through an investigation to assess whether the IDB or IDB Invest is following its own policies for preventing or mitigating harm to people or the environment. You can submit a complaint by sending an email to MICI@iadb.org. You can learn more about the MICI and how to file a complaint at http://www.iadb.org/en/mici/mici,1752.html (in English) or http://www.iadb.org/es/mici/mici,1752.html (Spanish).

How it works

How it works