HIDRO XACBAL S.A. (FMO-60760)

Countries
  • Guatemala
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.
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
A
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
Hidro Xacbal S.A. - Grupo Terra
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Climate and Environment
  • Construction
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)
$ 3.73 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)
$ 3.73 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 Mar 10, 2022

Disclosed by Bank Mar 2, 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.

WHO IS OUR PROSPECTIVE CLIENT?

Hidro Xacbal has been a client with FMO since 2007 when we signed a 15-year USD 30m senior loan as part of a USD 145.5 syndicated deal with Royal Bank of Trinidad and Tobago as Facility Agent to build and operate a hydro power station in Guatemala. Hidro Xacbal is part of the Grupo Terra group of companies with whom FMO now has 5 transactions in Renewable Energy.

WHAT IS THE FUNDING OBJECTIVE?

The loan matures in March 2022 with a partial balloon payment of USD 5.8m (FMO portion, total approx. USD 34m). The client asked to extend the loan by 3 years and spread the repayments out per quarter in a linear fashion. One of the current lenders, CABEI has decided to opt out of the extension. FMO, together with DEG and RBC will take over pro-rata a portion of the CABEI exposure. FMO's new exposure will become USD 9.5m. The extension will allow the client to spread out the last payment over a reasonable tenor (not excessively long given the strong performance over the years) and increase its working capital facility with a local bank to better manage its cashflows throughout the year.

WHY DO WE WANT TO FUND THIS PROJECT?

By extending the tenor, the client can increase its working capital lines with a local commercial bank and streamline its monthly cashflow profile. When the deal was signed in 2007, FMO could only offer a 15-year tenor, so the repayment schedule had a partial balloon repayment. It was known then that the loan would have to be refinanced. The extension will allow the project to better match cashflows to the new repayment schedule.

ENVIRONMENTAL AND SOCIAL RATIONALE

FMO's E&S category for this transaction is A. All risks are within the existing footprint of the Project and have been properly mitigated with a working ESMS. This investment needs to continue managing impacts in a manner consistent with all IFC Performance Standards: PS1: Assessment and Management of Environmental and Social Risks and Impacts; PS2: Labor and Working Conditions; PS3: Resource Efficiency and Pollution Prevention; PS4: Community Health, Safety and Security; PS6: Biodiversity Conservation and Sustainable Management of Living Natural Resource; PS7: Indigenous Peoples and PS8: Cultural Heritage. While PS5 has been triggered, there are no further actions required on this regard and there is a working grievance mechanism that remains current and active to capture any complaint.

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

One of the current lenders, CABEI has decided to opt out of the extension. FMO, together with DEG (KfW) and RBC will take over pro-rata a portion of the CABEI exposure.


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

As part of FMO's ex-ante disclosure (disclosure of transactions before contracting), you can send requests or questions for additional information to: disclosure@fmo.nl

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

How it works

How it works