AIB Equity (IFC-37054)

Regions
  • South Asia
Geographic location where the impacts of the investment may be experienced.
Countries
  • Afghanistan
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • International Finance Corporation (IFC)
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
Nov 2, 2015
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
Afghanistan International Bank
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Technical Cooperation
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Equity
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 10.00 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 @ IFC website

Updated in EWS Jul 31, 2018

Disclosed by Bank Sep 30, 2015

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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.

This project finances an equity stake in Afghanistan International Bank, as well as a comprehensive advisory services package, to help further institutionalize its shareholding, strengthen its operational risk management, and build its capacity for commercial lending in diversified sectors.

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

The project entails IFC taking an equity stake of up to 15% in Afghanistan International Bank (AIB) in two tranches. The initial tranche is for an equity stake of 7.5%, purchased equally from AIB’s two main sponsor shareholders. The second tranche comprises of an IFC option to increase its equity stake by an additional 7.5% within two years of its initial investment in AIB by subscribing to new shares issued by AIB. Afghanistan International Bank is a local Afghan private sector bank established in March 2004. It is headquartered in Kabul. As of December 2014, it had 33 branches, 2 cash outlets, 59 Automated Teller Machines, and 136 Point of Sale devices, across 10 provinces in Afghanistan. AIB is currently owned 46.25% each by two local groups - Horizon Associates LLC and Wilton Holdings Limited (together the two main sponsor shareholders), and 7.5% by the Asian Development Bank. Horizon, Wilton and the Asian Development Bank are also among the four founding shareholders that established AIB in March 2004 with a shareholding of 25% each.

Financial Intermediary
A financial intermediary is a bank or financial institution that receives funds from a development bank. A financial intermediary then lends these funds to their clients (private actors) in the form of loans, bonds, guarantees and equity shares. Financial intermediaries include insurance, pension and equity funds. The direct financial relationship is between the development bank and the financial intermediary.
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.

Afghanistan International Bank (“AIB” or “the Bank”) is a local Afghan private sector bank established in March 2004. It is headquartered in Kabul. As of December 2014, the Bank had 33 branches, 2 cash outlets, 59 Automated Teller Machines (“ATMs”), and 136 Point of Sale (“POS”) devices, across 10 provinces in Afghanistan. AIB’s banking services include corporate/commercial, small business and retail banking, as well as electronic and Islamic banking. With total assets of US$964.2 million, AIB has the largest market share in the Afghan banking sector of approximately 23%.


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.

Mr. Guy Mallet
Chief Executive Officer
Afghanistan International Bank
Shahr-e-Naw, Haji Yaqoob Square
Shahabudin Watt, Post Box 2074
Kabul, Afghanistan
Telephone: +93 (0) 20550255

ACCOUNTABILITY MECHANISM OF IFC
The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org. You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

How it works

How it works