USD 50 Mn Senior unsecured term facility- On lending to Green Projects and to MSME Borrowers  

How does BII evaluate the impact of its investments?

The monitoring process adopted by BII to evaluate the impact of the investments is primarily by obtaining periodic reports from the borrowers, the frequency of which is monthly and semi-annual. These reporting requirements are contained as conditions in the agreements executed between BII and the Bank.  

The monthly report contains specifications of the new eligible lending that have been generated in a given month in a pre-specified format. This tracks the progress in terms of disbursements that the entity has made and also the climate impact created by this portfolio quantified in terms of GHG reductions.  The semi-annual report is the summary of the Green Financing portfolio funded by BII with details of the Green Financing purposes for which the BII funding has been mobilised. 

What due diligence does BII undertake prior to making investment decisions and how does this compare with best practice? 

During the due diligence there were many discussions with the regards to the credit evaluation procedures at the Bank, with detailed discussions with the relevant business units. 

Further discussions and analysis were specifically carried out to understand the manner in which the Green Financing portfolio was maintained.  The Bank's Green Financing Taxonomy was perused, the manner of tagging green facilities and verification/authenticating process thereafter was assessed.  The Bank also assesses the climate impact created by the Green Finance portfolio, using a web-based third party multi-lateral maintained tool.  The said tool was also reviewed.  Clarifications were sought as necessary from the officers handling the subject. 

What due diligence does BII undertake prior to making investment decisions and how does this compare with best practice? 

Environmental and Social and due diligence was included as a main component of the due diligence process. Environmental and social action plan (ESAP) was proposed to close the identified gaps (during the due diligence process) in the Bank's Environmental and Social Management system, . The ESAP was a part of the contract document between the BII and the Bank. This is in line with the general practice DFIs follow in due diligence process.