According to the Bank’s website, the proposed Project is an up to US$15 million (in Malagasy Ariary (MGA) equiv.) investment for IFC's own account in a three-year senior unsecured bond to be issued by Societe Generale Madagasikara (SGM). SGM is an existing client of IFC under the Base of the Pyramid (BOP) Platform. The bond, which will be issued out of SGM's sustainable bond framework, will be privately placed and is expected to raise up to US$35 million in total. The Project is processed under the BOP Platform, which is designed to support lending to micro, small and medium enterprises (MSMEs) by financial institutions (FIs) in emerging markets in response to the COVID-19 pandemic and the interrelated crises which followed. 50% of the proceeds from the bond issuance will be used to finance MSMEs while the rest will finance renewable energy projects. IFC's investment will target MSMEs only.

As part of the BOP Program, the Project will use IDA PSW's Local Currency Facility (LCF) to source local currency, as well as the Pooled First Loss Guarantee (PFLG) from IDA PSW's Blended Finance Facility (BFF).  

The Project is categorized as FI-2 according to IFC's Policy on Environmental and Social Sustainability. The proceeds of the bond will support on-lending to MSMEs in Madagascar active in sectors with minimal adverse E&S impacts such as commerce, manufacturing, services, construction, textiles, transportation and storage, agribusiness, hotels and restaurants. IFC's investment will not be used to support any coal-related activities or higher-risk activities that may include: (a) involuntary resettlement; (b) potential adverse impacts on Indigenous Peoples; (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage; or (d) significant occupational health and safety risks. The main E&S risks and impacts of the Project derive from the Bank's capacity to maintain its management system to identify and manage the potential E&S risks and impacts associated with the sub-projects supported under this transaction. These risks are typically associated with labor and working conditions, occupational health and safety, pollution prevention and atmospheric emissions, and waste and wastewater management, among others.

The proposed Project consists of IFC investment in an unsecured amortizing bond of up to US$15 million (in Malagasy Ariary (MGA) equiv.), with a 3-year tenor.

TheProject will be financed from IFC's own account with the support of IDA Private Sector Window, that will enable IFC to provide local currency financing to MSMEs operating in the challenging economic environment, while supporting reaching underserved lending segments in Madagascar.

The total PSW eligible program size consists of up to US$433 million.

Societe General Madagascar - Present for more than 25 years in Madagascar, SGM is a subsidiary of the Societe Generale Group (the Group), a leading European financial services group and a major player in the economy for over 160 years, which supports 25 million clients every day with 126,000 staff in 65 countries. The Group entered Madagascar following the privatization of a previously state-owned bank and is engaged in offering sustainable and responsible banking services. SGM employs more than 1000 people and has a network of 70 branches across the country and offers banking services to individuals, MSMEs, corporates, and institutions (financial institutions, public entities, and NGOs).

Shareholders: The Group holds 70% of the shareholding of SGM, while the Malagasy state has a 28.5%, shareholding, and 1.5% is held by employees.

Societe General Madagascar
Dimbiniaina Rakotojoelimaria
Responsable Financements Structurés
+261(0)20 22 206 91 (9641)
dimby.rakotojoelimaria@socgen.com
14 Rue Général Rabehevitra – BP 196 – Antaninarenina, Antananarivo 101
https://societegenerale.mg/fr/

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