According to the International Finance Corporation, this project consists in a Senior Secured Loan, a loan takes priority over other loans in repayment, to SabCapital S.A. de C.V., SOFOM, E.R. The loan will be used to grow its tourism (hotels) and green buildings portfolios in Mexico. The proposed project will support the entrance of Banco de Sabadell S.A. (Spain), through SabCapital, as a new participant in the Mexican financial system. The loan will be fully guaranteed by Sabadell Spain.
The International Finance Corporation has rated the project as FI-2, which according to their documents corresponds with a medium risk or category B project. It gives the following explanation for their rating:
This project has been categorized as FI-2 in accordance with IFC’s Policy on Environmental and Social Sustainability based on the risk of the portfolio to which IFC will be exposed. As of March 2018, SabCapital lending to hotels represented 17.5% of their total loan portfolio. Most of SabCapital’s hotel portfolio includes projects with potential limited adverse environmental or social (E&S) risks or impacts that can be readily addressed through mitigation measures. However, some hotels might be in environmentally and culturally sensitive areas, and require additional mitigation measures. As part of IFC’s financing, SabCapital will be required to screen all its commercial loans against IFC Exclusion List, and to verify that loans to hotels and green buildings comply with the applicable E&S laws and, when applicable, with IFC Performance Standards.
The International Finance Corporation says that the project will have the following impacts:
(i) Competitiveness: In the highly concentrated banking system in Mexico, the entrance of Sabadell Spain is expected to help foster higher competition in the corporate banking and project finance space, particularly in tourism (hotels) and green investments.
(ii) Sustainability: The project will contribute on the development of sustainable finance in Mexico, with a special focus on tourism (hotels) and green buildings.
Additionally, the key potential environmental and social risks that the Corporation has identified are listed below:
(i) worker’s health and safety during construction
(ii) conversion of and impacts to critical natural habitat
(iii) unfair working conditions in the hospitality industry
(iv) life and fire safety in buildings accessed by the public.
The investment will be in the form of a Senior Secured Loan.
The International Finance Corporation lists the following description for the private actors involved in this project:
Sponsor: Sabadell Spain is the 4th largest Spanish financial institution, operating mainly in Spain, UK and the Americas. The group is listed in the IBEX 35 stock market in Spain.
Partner: SabCapital is a fully owned subsidiary of Sabadell Spain. It started operations in Mexico in April 2014 as a SOFOM, a non-bank financial institution (non-deposit taking), focusing on corporate lending in sectors such as tourism, real estate, energy, industry, among others.
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/