📋 Tender Overview
STATUS
Proposed
MEMBER
Multicountry
SECTOR
Multi-sector
E&S CATEGORY
FI
PROJECT NUMBER
000778
FINANCING
FINANCING TYPE
Nonsovereign
TIMELINE
CONCEPT REVIEW
November 10, 2023
APPRAISAL REVIEW/FINAL REVIEW
July 11, 2024
OBJECTIVE
Enhance trade flow and connectivity among AIIB members by providing trade facilitation support for infrastructure equipment and related capital goods sectors.
DESCRIPTION
The project proposes to support the financing of infrastructure equipment and related capital goods trade by providing risk mitigation in emerging and frontier markets. The project intends to facilitate more risk taking on emerging markets and on emerging market Issuing Banks (IBs) by proposing to offer Standard Chartered Bank (SCB) Credit Guarantees (CG) or Unfunded Risk Participation (URP) covering nonpayment risk on IBs in emerging markets for trade-related letters of credit.
ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy and Categorization: AIIB's Environmental and Social Policy (ESP), including the Environmental and Social Exclusion List (ESEL) is applicable to this project. The project is categorized as a Financial Intermediary (FI), as the financing structure involves providing CG or URP to SCB to support Letters of Credit issued by the IBs. AIIB would delegate to SCB the decision-making for identifying and managing the environmental and social (E&S) risks related to trade finance via appropriate portfolio selection in line with AIIB’s E&S requirements to be set out in the framework agreement.
Environment and Social Instrument: The project’s E&S instrument will be appropriate portfolio selection and SCB’s Environmental and Social Risk Management (ESRM) Framework applicable to SCB’s Corporate and Investment Banking (CIB) clients, which is materially consistent with AIIB’s ESP and Standards. The ESRM Framework details the scope of the application, risk assessment process and measures to address such risks. The ESRM Framework ensures that SCB’s CIB clients and transactions (excluding financial institutions clients and their transactions) are evaluated utilizing a risk-based approach against rigorous E&S standards, thereby maintaining alignment with AIIB’s ESP requirements to be set out in the framework agreement. SCB sets, and regularly reviews, E&S standards for its clients via a series of public Position Statements. For clients operating in sensitive sectors such as (i) extractive industries, (ii) power generation; (iii) agricultural industries; (iv) infrastructure and transport; and (v) chemicals and manufacturing where E&S risks are heightened, SCB uses its sector specific position statements to manage these risks. In addition, SCB also has two Position Statements covering Climate Change and Human Rights, and a document that captures Prohibited Activities.
Environmental and Social Aspect. AIIB’s E&S risk assessment of the project is restricted to the transactions (LC Confirmation/Discounting) to be executed
