Bank of China (Grand Cayman Branch) contributes to $300 million syndicated loan to Fondo MIVIVIENDA S.A. (FMV) for on-lending purposes

Bank of China (Grand Cayman Branch) contributes to USD 300 million syndicated loan to Fondo MIVIVIENDA S.A. (FMV) for on-lending purposes in 2023 On June 2, 2023, Fondo MIVIVIENDA S.A. (FMV) — a Peruvian state-owned mortgage lender and provider of affordable housing financing to low- and middle-income families and individuals — signed a $300 million facility agreement with JPMorgan Chase Bank, N.A. and the Grand Cayman Branch of Bank of China Limited.

The loan was guaranteed by the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank that provides political risk insurance and guarantees for projects in developing countries.

The MIGA guarantee provided coverage protecting against losses — worth up to $427 million — that result from FMV’s failure to make payments when they are due under an unconditional and irrevocable financial payment obligation (over a 6.5-year period).

The proceeds of the loan were to be used by FMV to increase access to mortgage loans for the lowest-income segments of the Peruvian population and those affected by vulnerability, and to promote the development of green housing in Peru.

FMV planned to allocate 50 percent of the borrowed funds to finance mortgage loans for Peruvian women and a Gender Action Plan (GAP) was to be developed by FMV to increase housing finance for women in Peru and segments of the population affected by vulnerability. MIGA assessed the environmental and social (E&S risks) associated with FMV’s mortgage loans to be minimal.

As such, the project was categorized as FI-3 under MIGA’s Policy on Environmental and Social Sustainability (2013).

FMV’s labor policies were also assessed by MIGA to be in line with the labor set under Performance Standard 2: Labor and Working Conditions.