IDB closes $430 million syndicated loan to Brazil’s Embraport project

IDB.Nov 25, 2011. WestLB, HSBC, Caixa Geral, Santander join IDB’s A/B Loan Program to finance a project that is critical to help ease congestion at Santos port.The Inter-American Development Bank (IDB) closed a $430 million syndicated loan with a group of four international commercial participants to finance the construction, operation and maintenance of a new private mixed-use container and liquids terminal in Brazil’s Santos Port, the largest port complex in the region.

The loan was granted to Empresa Brasileira de Terminais Portuários S.A. (Embraport), responsible for the project, which is critical in easing congestion and reducing costs in Santos. The transaction involves a 15-year $100 million IDB A loan and a 12-year IDB B loan of $330 million from WestLB, Caixa Geral de Depositos, HSBC and Banco Santander.

In parallel, Caixa Economica Federal of Brazil has also approved separate financing for the project totaling R$633 million, funded by BNDES, which alongside the IDB financing, will make up the $786 million (equivalent) global senior debt package.

“This operation sets an important milestone for the IDB and Brazil because we see it as an aggressive step towards supporting more private investment in the port sector. In this difficult credit environment, the IDB plans to do more to support Brazilian infrastructure, both through our own balance sheet as well as through attracting participants and co-financiers,’’ said John Graham, the project team leader at the IDB’s Structured and Corporate Finance Department.

The loans from the IDB and CEF/BNDES will finance the first phase of the new terminal, which will have an expected capacity of more than 1 million TEU (a measure that refers to number of 20-foot containers that the facility can handle per year) and will be able to handle liquid bulk. The project will improve the port’s capabilities to receive a new generation of deeper-draft container ships, which have already become commonplace in the global shipping market, helping reduce waiting lines outside the port.

The new terminal will also contribute to improved traffic conditions in the city because it will have adequate road and rail connections, and will be located away from the congested urban area of Santos itself. The new terminal will create approximately 1,500 direct jobs during construction as well as 550 employees at the outset of the operation and 1,500 at full capacity.

About the IDB's Structured and Corporate Finance Department
The Structured and Corporate Finance Department (SCF) leads all IDB's non-sovereign guaranteed operations for large-scale projects, as well as those linked to companies and financial institutions. Through its Loan Syndication Program, SCF acts as a catalyst, helping to engage third-party resources by partnering with commercial banks, institutional investors, co-guarantors and other co-lenders for projects with high developmental impact.

IDB releases first regional survey about Latin American and Caribbean banks’ sustainability

Nov 15, 2011.IDB. Miami.– The Inter-American Development Bank (IDB) released today the first regional survey about environmental, social and corporate governance sustainability of banks in Latin America and the Caribbean.

The survey, launched today during the Federation of Latin American Banks (FELABAN)’s annual meeting, showed that financial institutions in Latin America and the Caribbean have strong standards for corporate governance but more improvements are needed in terms of environmental and social sustainability.

Ninety-eight percent of the 55 financial institutions surveyed in the region have policies in place to combat money laundering and 93 percent have a policy to fight bribery and corruption. Yet, in terms of environmental sustainability, only 62 percent of those surveyed in the region incorporate environmental and social standards for their credit and loan business and only 36 percent have initiatives to reduce direct greenhouse emissions.

"This survey is a valuable benchmark and management tool for banks to measure their progress in terms of sustainability,” said Daniela Carrera-Marquis, Chief of the IDB Financial Markets Division at the Structured and Corporate Finance Department. “The IDB is committed in developing financial markets in the region in a sustainable manner and this survey will allow us to better tailor our products and services to meet the needs of our clients and their end users, maximizing our development impact.”

The survey, carried out among banks from 19 countries, also showed that 42 percent of the institutions surveyed have initiatives to increase workforce diversity and 55 percent have initiatives to promote access to financial services to minorities.

Twenty-two institutions from Mexico, Central America and the Caribbean, 15 from Andean Countries and 18 from the Southern Cone participated in the survey, which contained 46 questions divided in three topics: corporate governance, environmental and social sustainability.

Top-ranked banks

The survey is complemented by a study produced by Sustainalytics, a world leader in research and analysis of environmental, social and corporate governance issues, which has created a ‘sustainability rating’ that allows each bank to see their position over its competitors in any of these three aspects.

Following this methodology, the five banks in the region that are better positioned when it comes to environmental and social responsibility and corporate governance are: Grupo Financiero BBVA Bancomer, Bancolombia S.A., Banco Santander (Brazil), Banco de Galicia y Buenos Aires S.A. and HSBC Latin America Holding Limited.

“This project provides a unique opportunity to examine the financial sector in Latin America and the Caribbean as a whole, visualize trends and identify areas for improvement,’’ added Gema Sacristán, IDB beyondBanking program coordinator. “It also offers an opportunity for other banks to learn from the successes and adapt such best practices moving forward. We hope this study sends a clear message to the region about the new role for sustainability in financial intermediaries.”

The study is part of the IDB’s beyondBanking program aimed at promoting sustainability and stressing the competitive advantages that result when sustainable practices are mainstreamed in traditional bank management.

About beyondBanking

Banking on global sustainability is a program developed by the Financial Markets Division of the IDB’s Structured and Corporate Finance Department that seeks to promote sustainable environmental, social and corporate governance principles among Latin American and Caribbean financial intermediaries through financial and technical cooperation.