BANCO DE AMERICA CENTRAL, S.A (FMO-61498)

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
Approved
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."
Voting Date
Nov 24, 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 de America Central, S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
The service or industry focus of the investment. A project can have several sectors.
Potential Rights Impacts
  • Healthy Environment
Only for projects receiving a detailed analysis, a broad category of human and environmental rights and frequently at-risk populations.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 200.00 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)
$ 80.00 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 30, 2023

Disclosed by Bank Sep 9, 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?

Banco de America Central, S.A. (BAC) is a large size commercial bank in Guatemala with a strong presence in the small and medium sized company sector (SME) as well as among corporate clients in the country. The Bank has total assets amounting to USD 4.7 billion and a loan portfolio of USD 3.4 billion as of March 2022.

WHAT IS THE FUNDING OBJECTIVE?

The USD 200 million senior term facility will focus on supporting SMEs and local Green loans in Guatemala. The SME funding will be used by BAC to expand its SME portfolio, while the Green loans will be on-lent to green projects in line with FMO's green lending criteria. These loan purposes fit perfectly with the ongoing strategy of BAC and their Group to become a more sustainable financial institution and to support local SME clients. The total USD 200 mln transaction refers to a committed tranche of USD 120mln and an uncommitted tranche of USD 80mln (which may be activated). The committed tranche will be funded by FMO and joint participants.

WHY DO WE WANT TO FUND THIS PROJECT?

Providing financing to SMEs and green projects in Guatemala is in line with FMO's strategic goal to support job creation, reduction of GHG emissions and to expand actions against climate change effects. Considering the size of this facility and BAC's loan portfolio for SMEs and corporate clients, there will be a significant contribution to advance green finance and environmental protection among private sector entities in Guatemala. Additionally, funding SMEs will be key in the context of weathering the impact of international economic slowdown and energy crisis.

ENVIRONMENTAL AND SOCIAL RATIONALE

Given the Bank's current portfolio, including an exposure to IFC PS Triggered Transactions >10%, the customer has an E&S Category A. The Bank has an existing ESMS which is limited in scope; therefore, an Environmental and Social Action Plan (ESAP) will be agreed with the client which seeks to align BAC's ESMS with FMO's requirements. BAC is willing to partner up with FMO to advance their sustainability policy, an upgraded ESMS plays a central role in that process.

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

FMO NV

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.

Banco de América Central, S.A. (BAC) is a large commercial bank in Guatemala with a strong presence in the small and medium-sized company sector (SME) and among corporate clients in the country. The Bank has total assets amounting to USD 4.7 billion and a loan portfolio of USD 3.4 billion as of March 2022.


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