CDB contributes $100 million to $269 million syndicated loan agreement with ACLEDA Bank for on-lending to Cambodian SMEs

Project narrative

On June 23, 2021, China Development Bank (CDB) and the International Finance Corporation (IFC) of the World Bank Group signed a $269 million syndicated senior loan agreement with ACLEDA Bank. CDB contributed $100 million to the syndicate. The loan carries a 5-year maturity. Its other borrowing terms of the loan are unknown. By December 2022, the loan had fully disbursed. The borrower was expected to use the loan proceeds to on-lend to Cambodian small and medium-sized enterprises (SMEs). A minimum amount of $100 million was to be used to support female-owned SMEs. The project supported by the syndicated loan was assigned to Category FI-2 according to IFC Sustainability Policy. The syndicated loan agreement reportedly includes strong ESG provisions that require the borrower to honor sustainable development obligations, such as environmental protection and social responsibility, and prevent adverse impacts on local people, the environment, biodiversity, cultural heritage, etc. The project's key environmental and social (E&S) risks derive from ACLEDA's SME lending activities, and its capacity and quality of environmental and social risk management system (ESMS) in place to manage such risks. Being an existing client of IFC, ACLEDA has established an ESMS and designated E&S roles and responsibilities, which were judged by the IFC to be commensurate with the project's underlying E&S risks. ACLEDA was required to maintain the ESMS, screen out higher risk transactions (e.g. rubber, teak or eucalyptus plantations), and continue improving the ESMS implementation. The labor practices of ACLEDA were found to be generally in line with IFC Performance Standard 2 on Labor and Working Conditions.