📋 Tender Overview
STATUS: Approved
MEMBER: Bangladesh
SECTOR: Multi-sector
E&S CATEGORY: FI
PROJECT NUMBER: 000728
FINANCING APPROVED FUNDING: USD50 million
FINANCING TYPE: Nonsovereign
TIMELINE: CONCEPT REVIEW
February 22, 2023
APPRAISAL REVIEW/FINAL REVIEW
July 10, 2024
FINANCING APPROVAL
April 22, 2025
OBJECTIVE
To promote sustainable infrastructure projects in Bangladesh by providing mid to long-term financing to the private sector, thereby fostering sustainable economic growth.
DESCRIPTION
The proposed project is a non-sovereign-backed on-lending facility of up to USD50 million to Eastern Bank PLC (EBL) to finance multi-sector infrastructure and energy-efficient sub-projects in Bangladesh. EBL will use the loan proceeds from AIIB to extend financing to sub-borrowers involved in infrastructure development and energy-efficient activities across the country.
EBL will be responsible for the origination, underwriting, and appraisal of the sub-borrowers, as well as monitoring of the sub-loans, and will assume the associated sub-borrower’s credit risk.
ENVIRONMENTAL AND SOCIAL INFORMATION
Applicable Policy and Categorization. AIIB’s Environmental and Social Policy (ESP) including the Environmental and Social Exclusion List (ESEL) and relevant Environmental and Social Standards (ESSs) apply to this FI Project. With the arrangement involving the provision of funds through an FI, the Project has been placed in Category FI, whereby AIIB delegates to EBL the decision-making on the use of AIIB's funds in so far as the infrastructure sub-projects meet the conditions to be agreed upon with EBL. This includes the selection, appraisal, approval, and monitoring of sub-projects and oversight of the sub-borrowers and sub-projects in line with AIIB's ESP requirements. Coal mining, coal transportation, coal-fired power plants, and infrastructure services that inclusively support these activities and gas-related sub-projects or investments will be excluded.
Environmental and Social Instruments. EBL has existing Environmental and Social Management System (ESMS), namely, the Environmental and Social Risk Management (ESRM) Procedure for their commercial bank operations and trade finance as part of their Credit Instruction Manual. For the AIIB financing facility (the Project), EBL has agreed to prepare an addendum or a standalone ESMS (enhanced ESMS) to define the process for screening, categorization, appraisal, contracting and monitoring sub-loans supported by AIIB loan proceeds according to the ESP, and specifically the applicability of AIIB ESF for higher activities. EBL’s commitment to enhancing its ESMS has been incorporated into an Environmental and Social Action Plan (ESAP) agreed by EBL which will be part of the loan agreement. The enhanced ESMS for the Project will be submitted to AIIB for review and approval prior to the utilization of the AIIB’s proceeds and the overview of the enhanced ESMS will be disclosed. In addition, a technical assistance
