Early Warning System

Regions

Latin America and Caribbean

Geographic location where the impacts of the investment may be experienced.

Countries

Panama

Geographic location where the impacts of the investment may be experienced.

Financial Institutions

Netherlands Development Finance Company (FMO)

International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.

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."

Borrower

EDEMET-EDECHI

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

Sectors

Energy
Infrastructure

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

Investment Type(s)

Loan

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

Investment Amount (USD)

$ 120.00 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 @ FMO website

Updated in EWS Nov 9, 2020

Disclosed by Bank Jun 29, 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.

Clients are two electricity distribution companies in Panama: Empresa de Distribucion Electrica Metro-Oeste, S.A. ("EDEMET") and Empresa de Distribucion Electrica Chiriqui S.A. ("EDECHI"). EDEMET and EDECHI ("Naturgy Panama" or "the Companies") have more than 600,000 residential clients and account for 62.67% of total electricity sales in Panama. The loan will be allocated US$80 million to EDEMET and US$40 million to EDECHI, for a total of US$120 million. The Companies are controlled, and majority owned by Naturgy. The companies are regulated utility companies.

The transaction consists of a senior loan with a term of 30 months (the "Transaction"). The purpose of the Transaction is to provide working capital to the Companies to compensate for the lack of liquidity resulting from the deferral of electricity bills during the four-month moratorium approved by the Government of Panama (Law 152 of May 4, 2020) intended to help end-users affected by the economic crisis caused by the global coronavirus (Covid-19) pandemic. The beneficiaries of this Transaction will be the Companies' end users.

The bank has categorized this transaction E&S B, as these are operational companies which conduct electricity distribution activities with relatively limited environmental & social impacts. IFC Performance Standards (PS) 1 - 4 are triggered. Adequate environmental & social management systems are expected to be in place. PS 5 - 8 are expected to be not triggered as the companies' activities concern existing electricity distribution operations. This financing will not be used to make any capital investments.

Investment Description

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

Netherlands Development Finance Company (FMO)

Private Actor 1	Private Actor 1 Role	Private Actor 1 Sector	Relation	Private Actor 2	Private Actor 2 Role	Private Actor 2 Sector
-	-	-	-	Empresa de Distribución Eléctrica Chiriquí S.A. (EDECHI)	Contractor	-
-	-	-	-	Empresa de Distribución Eléctrica Metro-Oeste, S.A. (EDEMET)	Contractor	-

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.

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW) . A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism

COMPANIE CONTACT
The contact information of the companies' representatives was not provided at the time of disclosure.