[China Co-Financing Fund] IDB administers USD 13 million loan from CHC to BanPro for DPR program to increase access to financing for agribusiness

📋 Staff Comments

1. Transaction amount of 13 million USD is based on the IDB Invest project page, which says the amount provided by the CHC would be 'up to' 13 million USD. It is assumed the 13 million USD was the amount actually loaned because the financial information on the IDB Project page lists 13 million USD as the syndicated amount, and sources from Banpro confirm that financing from the CHC was committed. However, it should be noted that IDB Invest project pages can often have out of date information, particularly in their descriptions. Thus, while there is significant evidence that funds from the CHC were used to finance this project, the exact transaction amount may be under 13 million USD.
2. The one year grace period is not included in loan details insofar as it appears a loan payment was made between the end of 2019 and the end of 2020; the amount listed as a debt obligation by BanPro in 2019 was C$ 1,353,524,000, while only C$ 1,229,100,012 was listed as a debt obligation in 2020. Because the loan was signed in September, however, it is possible that there was a full year grace period (September 2019 - September 2020) and the first payment occurred between September 2020 and December 2020.
3. 40 million / 1353.524 million = 0.
4. According to https://www.exchangerates.org.uk/NIO-USD-spot-exchange-rates-history-2019.html, the exchange rate on 12/31/2019 (which likely was used for currency conversions for a 2019 end of the year report) was C$1 NIO = $0.
5. Indicates the full 40 million USD loan was disbursed by the end of 2019.
6. Banco de la Produccion (Banpro) was founded in 1991. It is the largest (private) bank in Nicaragua and is ranked among the 20 largest banks in Central America.
7. IDB Invest, a member of the IDB Group, is a multilateral development bank committed to promoting the economic development of its member countries in Latin America and the Caribbean through the private sector. IDB Invest finances sustainable companies and projects to achieve financial results and maximize economic, social and environmental development in the region. With a portfolio of $12.1 billion in asset management and 333 clients in 24 countries, IDB Invest provides innovative financial solutions and advisory services that meet the needs of its clients in a variety of industries.
8. IDB Invest has a track record working with Banpro. In 2018 IDB Invest approved a US$20 million senior credit line to support the Bank’s efforts to build a green portfolio (US$10 million disbursed as of January 2019). The engagement included technical assistance and a US$1.5 million guarantee facility to enhance collateral to make viable to offer green lines to smaller companies and agricultural producers. Finally, Banpro is part of IBD Invest TFFP program with an approved line of US$30 million.
9. The loan may have been secured by (i.e. collateralized against Diversified Payment Rights sold by Banco de la Producción, S.A. This issue warrants further investigation.

📚 Sources & References

• Banpro DPR – Supporting middle-sized agroindustry producers in Nicaragua
• IDB Invest partners with Banpro to support agribusiness producers and small and medium enterprises in Nicaragua
• Produbanco - Grupo Promerica, [Luis Rivas A., 'un economista nicaragüense, que se desempeña como Chief Operating Officer de Grupo Promerica' Facebook post about IDB Invest loan], 2019 Memoria Anual Banpro
• Informe de Estados Financieros Separados Al 31 de Diciembre de 2019 y 2018
• Informe de Estados Financieros Separados Al 31 de diciembre de 2020
• Informe de Estados Financieros Por el Año que Terminó el 31 de Diciembre de 2021
• Nicaragua’s Banpro gets two loans worth US$90 million
• Banpro DPR – Supporting middle-sized agroindustry producers in Nicaragua
• Banpro DPR – Apoyo a los Productores Agroindustriales PYMES en Nicaragua
• Banpro DPR - Supporting middle-sized agroindustry producers in Nicaragua (IDBI-12582-01) Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.