Cross Border Facility Platform (MIGA-15258)

Regions
  • Latin America and Caribbean
Geographic location where the impacts of the investment may be experienced.
Countries
  • Brazil
Geographic location where the impacts of the investment may be experienced.
Specific Location
Uninformed
Whenever identified, the area within countries where the impacts of the investment may be experienced. Exact locations of projects may not be identified fully or at all in project documents. Please review updated project documents and community-led assessments.
Financial Institutions
  • Multilateral Investment Guarantee Agency (MIGA)
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
U
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
Jun 15, 2024
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 Santander S.A.
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Agriculture and Forestry
  • Communications
  • Education and Health
  • Energy
  • Finance
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Guarantee
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 826.50 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.
Project Cost (USD)
$ 826.50 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 @ MIGA website

Updated in EWS Apr 15, 2024

Disclosed by Bank Apr 8, 2024

Contribute Information
Can you contribute information about this project?
Contact the EWS Team

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.

As stated by the MIGA, this summary covers an application made by Banco Santander S.A. (Santander) of Spain for its USD denominated cross-border loans from Madrid to its corporate clients in Brazil. MIGA intends to cover the risk of Transfer Restriction and Inconvertibility (TR) and will work with Santander to develop a master coverage that will allow Santander to receive a capital relief from such TR cover, in accordance with Spanish banking rules and regulations.

The MIGA-guaranteed loans will be used by Brazilian corporates to support projects in the following areas: food & nutrition security, digital services, water & sanitation, affordable & reliable sustainable energy, urban connectivity, health, and inclusion.

The Project is expected to facilitate cross border investments in Brazil to increased access to finance toward Brazilian corporates in support of an array of highly developmental activities contributing to targeted developmental outcomes.

The proposed Project is consistent with Brazil's Country Partnership Framework (CPF) for FY18-23 under Focus Area 2, Private sector investment and productivity growth, and under Focus Area 3 -inclusive and sustainable development- given the proposed key priority areas eligible[1].Furthermore, the Project is intended to fully align with theGlobal Challenge Programs (GCPs).

The Project is also aligned with MIGA's FY24-26 Strategy and Business Outlook under its strategic focus of ensuring inclusive growth with an intended focus to direct use of proceeds toward projects preliminarily defined as (i) aligned with CPF and (ii) aligned with MIGA strategic areas of climate and/or gender.

As of December 2023, Santander's cross-border portfolio in Brazil included loans to mid-sized and large corporate clients in sectors such as telecommunications, oil & gas and mining, consumer goods, crop production and automobiles. The bank has no exposure to activities on the MIGA Exclusion List within cross-border loan portfolio. The bank also has no exposure to coal-related activities; the MIGA portfolio will not include coal-related activities or oil and gas activities.

[1]A new CPF for Brazil is currently under consideration.

 

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

The MIGA assigned the general risk category 'FI' to the project.

The main E&S aspects of this project relate to Santander's ability to identify, assess, and manage the E&S risks and impacts associated with its lending activities and the management of labor matters by Santander. MIGA analyzed Santander's cross-border portfolio for types of transactions, industry sectors, and exposure to MIGA's Exclusion List. MIGA also analyzed Santander's E&S risk management procedures and emergency preparedness procedures in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and the Santander's labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2).

The MIGA requirements for applying the Performance Standards differ from the Equator Principles requirements. For the purposes of the MIGA guarantee, Santander will be required to assess cross-border transactions against: (i) the MIGA Exclusion List; (ii) applicable E&S laws and regulations in Brazil; and (iii) the Performance Standards (for eligible loans in line with MIGA's requirements).

For the proposed guarantee, Santander will be required to report annually to MIGA regarding its cross-border portfolio, the implementation of the E&S procedures as well as labor practices.

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 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.

As stated by Bloomberg, Banco Santander S.A. attracts deposits and offers retail, commercial and private banking, and asset management services. The Bank offers consumer credit, mortgage loans, lease financing, factoring, mutual funds, pension funds, insurance, commercial credit, investment banking services, structured finance, and advice on mergers and acquisitions.


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.

No project contacts provided at the time of disclosure.

ACCESS TO INFORMATION

You can submit a request for information disclosure at: https://www.miga.org/contact/access_to_information. You can also request general information about MIGA and for information on guarantees by emailing: migainquiry@worldbank.org.

ACCOUNTABILITY MECHANISM OF IFC/MIGA

The Compliance Advisor Ombudsman (CAO) is the independent complaint mechanism and fact-finding body for people who believe they are likely to be, or have been, adversely affected by an IFC or MIGA- financed project. If you submit a complaint to the CAO, they may assist you in resolving a dispute with the company and/or investigate to assess whether the IFC is following its own policies and procedures for preventing harm to people or the environment. If you want to submit a complaint electronically, you can email the CAO at CAO@worldbankgroup.org.  You can learn more about the CAO and how to file a complaint at http://www.cao-ombudsman.org/

How it works

How it works