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Overview

China Co-Financing Fund provides $12.5 million loan to Scotiabank El Salvador for on-lending purpose (Linked to Record ID#86526)

Commitments (Constant USD, 2023)$12,896,673
Commitment Year•2020Country of Activity•El SalvadorDirect Recipient Country of Incorporation•El SalvadorSector•Other MultisectorFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
May 28, 2020

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Funding agencies

Government Agencies

  • People's Bank of China (PBC)

Cofinancing agencies

Intergovernmental Organizations

  • IDB Invest (formerly Inter-American Investment Corporation or IIC)
  • Inter-American Development Bank

Receiving agencies

Private Sector

  • Scotiabank El Salvador, S.A.

Implementing agencies

Intergovernmental Organizations

  • China Co-Financing Fund for Latin America and the Caribbean (CHC)
  • IDB Invest (formerly Inter-American Investment Corporation or IIC)

Loan desecription

China Co-Financing Fund provides $12.5 million loan to Scotiabank El Salvador for on-lending purpose

Interest type•Unknown

Narrative

Full Description

Project narrative

On May 28, 2020, IDB Invest, the private sector arm of the Inter-American Development Bank (IDB) Group, signed a financing agreement with Scotiabank El Salvador, S.A., in which IDB Invest agreed to arrange a senior unsecured loan of up to 37.5 million USD. The loan would consist of 15 million USD from IDB Invest, 10 million USD from the IDB, and 12.5 million USD from the China Co-Financing Fund for Latin America and the Caribbean. Loan terms are unknown. The funds are likely to be used to expand lending to small and medium sized enterprises (SMEs), since accompanying the loan is technical advising from IDB Lab about the creation and implementation of an SME digital platform called "Let's SME" that seeks to provide digital financial services to Scotiabank's SME clients. Although IDB Invest indicates that the loan was approved and signed with a syndicated amount of 12.5 million USD, the description of the project still discusses the loan from the China Co-Financing Fund as "possible co-financing." The China Co-Financing Fund is funded by the Chinese government and administered by the IDB. Scotiabank El Salvador is a former subsidiary of the Bank of Nova Scotia (Scotiabank), based in Canada, but its sale to Imperia Intercontinental Inc. was finalized in early 2020.

Staff comments

1. The origin of Imperia Intercontinental Inc. is unclear; the company also owns stakes in other banks in El Salvador, and some sources suggest it is headquartered in Panama, but a company website does not exist. This issue warrants further investigation. 2. IDB lists this project as "implementation", so AidData has coded status field accordingly. 3. The China Co-Financing Fund for Latin America and the Caribbean was established on January 14, 2013 with a contribution of $2 billion by the People's Bank of China. It is administered by the IDB. For more information, see umbrella Record ID#86526.