Founded in 1932, Maquinaria y Vehículos S.A. (“Mavesa” or the “Company”) is a family-owned, leading distributor of specialized vehicles such as buses, heavy-weight trucks, construction equipment, and light cargo vehicles utilized in multiple industries in the Ecuadorian market. Mavesa is the local distributor of (i) global vehicle manufacturers such as Hino (Toyota trucks), Citroën, DS Automobiles, Dongfeng, ZX Auto, Skywell among others; (ii) heavy equipment and machinery producers LiuGong and Bomag (Fayat Group); and (iii) Marangoni retreaded truck tires. Additionally, the Company owns and operates a network of 33 specialized vehicle shops and service centers across 12 cities, providing full after-sales services to customers. The proposed transaction will be structured through a synthetic securitization of the Company’s loan portfolio originated from the provision of heavy-weight vehicle financing to its clients, to support Mavesa’s 2022-2023 growth plan which has a total cost of US$50 million and includes: (i) the purchase of electric vehicles (“EV”) and necessary investments in infrastructure and capacity building for US$18 million; and (ii) US$32 million for the working capital to finance the Company’s on-lending activities and growth post-COVID recovery. The Project would be funded by an up to US$50m IFC A/B Loan and, given Mavesa’s commitment to introducing EVs in Ecuador, the proposed transaction will be structured as a Sustainability Linked Loan (“SLL”).
While all Performance Standards are applicable to this investment, IFC’s environmental and social due diligence indicates that the investment will have impacts which must be managed in a manner consistent with the following Performance Standards
PS 1 - Assessment and Management of Environmental and Social Risks and Impacts
PS 2 - Labor and Working Conditions
PS 3 - Resource Efficiency and Pollution Prevention
PS 4 - Community Health, Safety and Security
- PS 5: Land Acquisition and Involuntary Resettlement: Project locations has been acquired on a willing seller willing buyer basis. According to the information provided by the company, no informal land users have been identified prior to land acquisition for new facilities and the existing facilities. As of May 2022, there have been no grievances or court cases related to the land acquisition and/or leasing. A potential land acquisition related risk is expected to be captured through the risk identification procedure.
- PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources: All land lots for the Project are in urban areas and impacts on biodiversity values are not anticipated.
- PS 7: Indigenous Peoples: No indigenous peoples were identified in the areas surrounding the company’s assets.
- PS 8: Cultural Heritage: The company’s assets do not overlap with World Heritage Sites and there is no known cultural heritage within the vicinity that can be affected.
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