Early Warning System

Countries

Honduras

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

Proposed

Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.

Bank Risk Rating

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

Jun 27, 2022

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

Banco del Pais S.A.

A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.

Sectors

Finance
Industry and Trade
Technical Cooperation

The service or industry focus of the investment. A project can have several sectors.

Ring Fence

Small & Medium Enterprises
Women

A financial intermediary is a commercial bank or financial institution that receives funds from a development bank, sometimes for a specific lending purpose. A "ring fence" is another name for this specific purpose. These funds are then used for lending by the financial intermediary to client companies or individuals.

Investment Type(s)

Loan

The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.

Investment Amount (USD)

$ 60.00 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)

$ 60.00 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 Jun 3, 2022

Disclosed by Bank May 28, 2022

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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 investment consists of a senior loan of up to US$60 million to Banco del Pais, S.A. (BANPAIS or the Bank) in Honduras under the FIG COVID-19 Emergency Response WCS Envelope (WCS Envelope). The proposed WCS loan consists of a one-year senior loan facility, renewable for up to two additional years, to support the Bank’s working capital lending program to Honduran small and medium enterprises (“SMEs”) and women-owned SMEs (“WSMEs”).

IFC will provide expertise in improving the E&S Standards for BANPAIS and potentially capacity building in developing its value proposition for WSME and women clients.

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.

The proposed Project will support BANPAIS’ SME financing, focusing on low to medium risk sub-projects and has been categorized as FI-2 according to the IFC's Sustainability Framework. The main E&S risks inherent in the Project derive from BANPAIS’ capacity to identify, assess, and manage risks associated with its SME portfolio, primarily composed of construction and real estate, agribusiness, manufacturing as well as wholesale and retail trade activities. These risks typically include occupational health and safety issues, labor and working conditions, child and forced labor, waste and wastewater management, land tenure, resource efficiency, pollution prevention, and impacts to vulnerable communities and biodiversity. The Project will not support higher risk E&S sub-projects and activities involving (a) involuntary resettlement; (b) adverse impacts on indigenous peoples; (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage; (d) substantial occupational health and safety risks; (e) the conversion or degradation of natural habitats as defined by IFC PS 6 – “Biodiversity Conservation and Sustainable Management of Living Natural Resources”; or (f) category A or coal-related sub-projects. IFC’s applicable requirements for this Project will be the IFC Exclusion List and relevant host country E&S laws and regulations.

People Affected By This Project

People Affected By This Project refers to the communities of people likely to be affected positively or negatively by a project.

The project is expected to have a development impact in terms of increased access to working capital credit for SMEs and WSMEs in Honduras. The Facility is supporting BanPais' clients' capacity to sustain operations during an acute shock, supporting the private sector economic recovery process and shortening the time it will take for the most vulnerable to return to their traditional income-earning opportunities.

More than two years after the first COVID-19 infections, the pandemic continues to affect firms in a variety of ways, hindering a sustained recovery. Moreover, Honduras and the northern part of the country where BanPais operates were severely affected in 2020 not only by the COVID-19 pandemic but by the impact of hurricanes Eta and Iota, exacerbating the country’s intrinsic vulnerabilities. A return to pre-COVID-19 economic activity necessitates access to finance for SMEs to sustain and grow operations and economic activity.

The proposed investment will provide working capital to the Bank focusing the proceeds on the SME segment, facilitating loans to this segment and helping reduce the SME finance gap in the country.

Investment Description

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

International Finance Corporation (IFC)

The proposed investment consists of a one-year, renewable senior loan of up to US$60 million to BANPAIS under the WCS Envelope, with the funds being on-lent to the Bank’s SME and WSME clients.

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.

Banco del Pais, S.A. (Banpais) (Client)

Private Actor Relationship

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.

BANPAIS is majority owned by Bicapital Corporation, the holding company of Bicapital Group and owner of Banco Industrial, the largest bank in Guatemala. Bicapital Group is one of the leading banking groups in Central America, with operations in 5 countries in addition to Honduras.

Private Actors Description

Bicapital Corporation

Bicapital Groups

Private Actor 1	Private Actor 1 Role	Private Actor 1 Sector	Relation	Private Actor 2	Private Actor 2 Role	Private Actor 2 Sector
Banco del Pais, S.A. (Banpais)	Subsidiary	-	owns	Banco Industrial Guatemala	Parent Company	Finance

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.

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://disclosures.ifc.org/#/inquiries

If you believe that your request for information from IFC has been unreasonably denied, or that this Policy has been interpreted incorrectly, you can submit a complaint at the link above to IFC's Access to Information Policy Advisor, who reports directly to IFC's Executive Vice President.

ACCOUNTABILITY MECHANISM OF IFC/MIGA

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