Board of Directors Meeting

Wednesday, March 6, 2023, 2:00PM

Agenda

 

I. CHAIRMAN OPENS MEETING

II. CEO’s REMARKS [10 minutes]

III. PRESENTATIONS

a. Sector Strategy Presentation – Health and Agriculture

b. Sector Strategy Presentation – Funds 

IV. PROJECT APPROVALS

a. Poti New Sea Port LLC & Transford LLC – Georgia

Kenneth Angell, Managing Director, Office of Small Business and Financial Services

Ijeoma Nwakuche, Project Finance Specialist, Office of Health and Agribusiness

Dan Horrigan, Assistant General Counsel, Office of the General Counsel

b. SFC Finance Limited – Africa Regional

Leila Ahlstrom, Director, Office of Small Business and Financial Services

Justin Andrews, Managing Director, Office of Small Business and Financial Services

Rette Lopp, Assistant General Counsel, Office of the General Counsel

c. Nu Colombia S.A. – Colombia

Diego Torres Torres, Associate, Office of Energy

Harris Mehos, Director, Office of Infrastructure

Herb Ladley, Managing Director, Office of Infrastructure

Rob Harrington, Attorney Advisor, Office of the General Counsel

V. PRESENTATIONS

a. Greenhouse Gas Accounting Standards 

b. Sub-board Projects 

VI. ADMINISTRATIVE APPROVALS

a. Minutes – December 6, 2023 Board of Directors

VII. REPORTS TO THE BOARD

a. Risk Committee Report

VIII. EXECUTIVE SESSION
IV. CHAIRMAN ADJOURNS MEETING 
Annex B – Public Information Summary

Host Country Georgia

Names of Borrowers Poti New Sea Port LLC and Transford LLC

Project Description Expansion of Poti New Sea Port through reconstruction of a ship berth 

and acquisition of equipment for handling bulk cargo, primarily 

fertilizer (the “Project”).

Proposed DFC Loan $25,000,000 Direct Loan

All-Source Funding Total $33,120,000

Policy Review

Developmental Objectives The Project is expected to have a positive development impact in 

Georgia by increasing maritime transport capacity and improving the 

country’s ability to function as a transit hub between Europe and Asia. 

The Project is expected to increase the cargo throughput capacity of Poti 

New Sea Port by reconstructing a new berth, deepening the seabed to 

accommodate larger ships, and providing modern cargo handling 

systems. Modernizing port infrastructure in Georgia will also contribute 

to global food security by increasing the availability of large bulk 

handling services for fertilizer and cargo in the Black Sea along the 

Middle Corridor, which offers an alternative to transport routes through 

Russia. The Project is also expected to address economic growth 

challenges in the Samegrelo-Zemo region, an underdeveloped region 

within Georgia that has the highest percentage of poor households in the 

country. The Project will support jobs in an area that suffers from high 

rates of poverty and unemployment and procure goods and services 

from local businesses.

Environment and Social 

Assessment

Screening: The Project has been reviewed against DFC’s categorical 

prohibitions and determined to be categorically eligible. Projects 

involving rehabilitation of existing port infrastructure and limited 

dredging of uncontaminated materials are screened as Category B 

because adverse Project-related environmental and social impacts are 

site-specific and readily mitigated using adequate environmental and 

social management systems.

Applicable Standards: DFC’s environmental and social due diligence 

indicates that the Project will have impacts that must be managed in a 

manner consistent with the following International Finance 

Corporation’s (“IFC”) 2012 Performance Standards (“PS”):

PS 1: Assessment and Management of Environmental and Social 
Risks and Impacts;

PS 2: Labor and Working Conditions;

PS 3: Resource Efficiency and Pollution Prevention; and

PS 4: Community Health, Safety and Security.

Poti New Sea Port LLC acquired the land required for the Project 

through a negotiated sale at fair market values. In addition, project 

activities are not expected to adversely impact modified habitats 

containing “significant biodiversity value”, natural habitats, critical 

habitats, legally protected areas, cultural heritage sites, or indigenous 

peoples. Therefore, PS 5, 6, 7 and 8 are not triggered by the Project at 

this time.

In addition to the above standards, the Project will also be required to 

comply with:

• IFC’s Environmental, Health, and Safety (“EHS”) General 

Guidelines (April 30, 2007); and

• IFC’s EHS Guidelines for Ports, Harbors, and Terminals (April 

30, 2007)

Environmental and Social Risks and Mitigation: Environmental and 

social issues of concern include the need for a robust Environmental and 

Social Management System, stakeholder engagement, stakeholder and 

worker grievance management, characterization and disposal of dredged 

material, water quality, occupational health and safety, ambient air 

quality, and emergency preparedness and response.

This is a follow-on investment in Poti New Sea Port. In 2018, DFC 

(then OPIC) supported the development of Phase 1, which included the 

refurbishment, modernization, and deepening of the north inner harbor 

of the port at Poti. Phase 1 operations began in October 2022.

Environmental and Social Management System

As part of Phase 1, the Borrowers prepared an Environmental and 

Social Policy Framework to define the environmental and social 

objectives and principles that will guide the Project to achieve sound 

environmental and social performance during both construction and 

operation. The Borrowers will also prepare an adequate environmental 

and social impact assessment for the Project (“Phase 2”).

The Borrowers have appointed an EHS Manager who will be 

responsible for overseeing the day-to-day implementation of the 

Environmental and Social Management Plans during the construction 

and operations phases, and for monitoring environmental and social 

impacts, record-keeping, and updating of the plans as necessary.

The Borrowers will prepare adequate Environmental and Social 

Management Plans for Phase 2 construction and will update the existing 
Phase 1 operational management plans to include Phase 2 activities. 

The Borrowers will also be required to prepare an adequate Dredging 

Management Plan for the deepening dredging activities. The Borrowers 

will be required to provide to DFC an Annual Environmental and Social 

Report summarizing its E&S monitoring data. 

Stakeholder Engagement and Grievance Management

The Borrowers developed a Stakeholder Engagement Plan (“SEP”) in 

December 2015. The SEP was updated in November 2021 to cover 

construction and operations under Phase 1. The Borrowers will be 

required to further update the SEP to include coverage of Phase 2 

activities and to identify stakeholders relevant to the Project’s overall 

area of influence for both phases. The SEP will also be updated to 

strengthen its identification of vulnerable and disadvantaged 

stakeholders and differentiated stakeholder analyses and engagement 

measures for them; identification and analyses of construction-related 

stakeholders for Phase 2; identification and inclusion of other interested 

stakeholder groups including any project opponents. 

The Borrowers will also be required to improve the Project stakeholder 

Grievance Mechanism (“GM”) to address deficiencies identified 

through a detailed review of the GM by the Independent Environmental 

and Social Consultant including: a plan to inform stakeholders about the 

GM, including channels for filing grievances, steps to resolve 

grievances, and timeframes for each step; and ensuring that the GM is 

gender sensitive and inclusive. 

DFC will require the Borrowers to prepare a separate grievance 

mechanism for workers, or to revise the existing overarching grievance 

mechanism, to ensure that it has in place a dedicated process for internal 

grievances. The worker grievance mechanism shall include an 

anonymous channel.

Characterization and Disposal of Dredged Material, and Water 

Quality

The Borrowers analyzed the material to be dredged for heavy metals, 

TBT, PCBs, hydrocarbons, and chlor-organic pesticides. Two of the 

parameters were found to be above international standards (Ni and Cu); 

however, this has been shown from prior sediment studies to be a result 

of naturally high background levels in the region. None of the other 

parameters was found to be above Georgian or international limits. 

Therefore, the material was determined by DFC and the Borrowers to be 

suitable for disposal at sea.

The material to be dredged will be disposed of at sea in an undersea 

“canyon” that has served as the historical location for disposal of 

dredged material for the Old Port. The government of Georgia has 

designated the canyon as the approved site for at-sea disposal of 

uncontaminated dredged material from Poti New Sea Port.
During both deepening and maintenance dredging activities, the 

Borrowers will implement a Water Quality Monitoring Program to 

monitor the impacts from dredging and disposal activities.

Air Emissions and Ambient Air Quality

The Project may result in adverse impacts to ambient air relating to 

dust/particulates released from the bulk storage piles on site. DFC’s 

Independent Engineer (“IE”) reviewed the Project’s existing Phase 1 

Air Emissions Management and Dust Control Plan (the “Plan”) and 

found that the mitigation measures set out in the Plan are likely to 

significantly reduce any potential operational dust emissions from the 

bulk storage piles at the facility, and that Phase 1 emissions from 

vehicles, machinery, trains, and ships are unlikely to have a significant 

adverse impact on local ambient air quality. Also, the Borrowers 

represent that after Phase 2 is complete, all bulk storage piles will be 

moved within the existing covered warehouse, further reducing adverse 

impacts to ambient air quality from the storage and movement of bulk 

cargo.

However, the IE also determined that there was not an adequate prePhase 1 air quality (“AQ”) baseline, and that the Plan could be 

improved to further minimize potential Project-related AQ impacts. 

Therefore, DFC will require the Borrowers to implement an adequate 

air quality monitoring system and collect current baseline data for at 

least 1 month prior to the start of construction of Phase 2, as well as 

additional data once Phase 2 becomes operational. DFC will also 

require the Borrowers to update the Plan to identify any additional 

nearby receptors relating to AQ, maintain a more detailed inventory of 

dust sources on-site, and implement procedures for the periodic review 

and updating of the Plan.

Occupational Health and Safety (“OHS”)

There have been no lost time incidents or fatalities as part of DFC’s 

support of the Phase 1 development. The Borrowers will prepare sitespecific construction and operational phase OHS Management Plans for 

Phase 2. All Phase 2 subcontractors will adhere to the Borrowers’ OHS 

Management Plans and procedures and will implement health and safety 

communication and training programs to prepare workers to recognize 

and respond to workplace hazards. Construction safety specifications 

will be an integral part of the tender documentation for the 

subcontractors, and the Borrowers will require that each contractor 

appoint dedicated OHS officers. The Dredging Contractor will include 

OHS mitigation measures in the Dredging Management Plan.

Emergency Preparedness and Response

The EPC contractor will be required to develop a site-specific 

Emergency Preparedness and Response Management Plan for Phase 2 

construction. The plan will include an overview of risks and emergency 
scenarios, emergency preparedness and response procedures, spill 

prevention and control measures, roles and responsibilities, notifications 

and communications (including alarms, warning systems and back-up 

systems), equipment, and resources.

The Borrowers will prepare a Project-specific Emergency Preparedness 

and Response Plan prior to beginning Phase 2 operations, and the 

Dredging Contractor will be required to include adequate emergency 

preparedness and response measures in the Dredging Management 

Plan.

In case of severe weather, the Georgian State Hydrography Service will 

issue a severe weather warning, after which the Poti Harbor Master 

announces the port closure. Crane operation will be suspended during 

high winds.

Oil spill response measures will be coordinated with Poti Port and will 

follow Poti Port’s Oil Spill Contingency Plan, which arranges responses 

by spill severity.
Annex B – Public Information Summary

Host Countries Africa Regional 

Angola 

Benin

Botswana

Burkina Faso

Cameroon

Cape Verde

Congo, Dem. Rep.

Congo, Rep.

Cote d’Ivoire 

Egypt 

Ghana 

Kenya 

Lesotho 

Madagascar 

Malawi 

Mali 

Mauritius 

Morocco 

Mozambique 

Namibia 

Nigeria 

Rwanda 

Senegal 

South Africa 

Tanzania 

Togo 

Tunisia 

Uganda 

Zambia 

Name of Borrower SFC Finance Limited, a Mauritius company 

Project Description Financing to expand the Borrower’s debt financing to small and 

medium enterprises (“SMEs”) in Africa.

Proposed DFC Loan $65,000,000 loan with a 10-year tenor

All-Source Funding Total $95,000,000 

Policy Review

Developmental Objectives The Project is expected to have a positive development impact in SubSaharan Africa by allocating at least $95 million to a portfolio of 

growth-oriented small and medium enterprises (SMEs) that provide 

economic, social, and environmental benefits. SMEs are a critical 

enterprise segment for Africa’s economic development and 
productivity. Throughout Africa, SMEs represent 90% of all companies, 

an estimated 40% of GDP, and 80% of employment. Yet access to 

finance for SMEs is relatively limited and represents a barrier to 

enterprise growth. Unmet financing demand is estimated to be 

approximately $302.8 billion, or 15% of GDP, for Sub-Saharan Africa. 

The Project is expected to provide loans to at least 27 SMEs during the 

initial five years of the loan facility, while providing significant 

technical assistance to facilitate growth. The Project is also part of a 2X 

Flagship Fund, qualifying as 2X due to the Borrower’s commitment that 

at least 30% of its investees will be women-owned or -led, as well as 

committing to gender diversity among the Borrower’s own staff and 

senior management. 

Environment and Social 

Assessment

The Project has been reviewed against DFC’s 2020 Environmental and 

Social Policies and Procedures manual (“ESPP”) and has been 

determined to be categorically eligible. DFC loans to non-bank financial 

institutions for the expansion of debt financing to small and medium 

enterprises (“SMEs”) are screened as a Financial Intermediary C (FI-C) 

for environmental and social assessment. These downstream loans are 

expected to result in minimal adverse environmental and social impacts. 

Therefore, all those downstream loans have been pre-screened as low 

risk and further review and consent is not required for these loans. 

To ensure that the Borrower’s loans are consistent with DFC’s statutory 

and policy requirements, the DFC Loan will be subject to conditions 

regarding the use of proceeds. The primary environmental and social 

issues identified in this transaction relate to the need for an 

Environmental and Social Policy that meets the 2012 IFC Performance 

Standards. 

Under DFC’s ESPP, the Borrower is required to comply with applicable 

local and national laws and regulations related to environmental and 

social performance and applicable provisions of the 2012 International 

Finance Corporation’s Performance Standard (“PS”) 1 and 2. A deskreview based due diligence assessment indicates that because the 

Project will use DFC support to support the expansion of SME lending 

in Africa, significant adverse impacts concerning community health and 

safety, biodiversity, land acquisition and resettlement, indigenous 

peoples, and cultural heritage are not anticipated; therefore, PS 3, 5, 6, 

7, and 8 are not triggered at this time. The Borrower does utilize private 

security and therefore, relevant aspects of PS 4, Community Health, 

Safety and Security are triggered. 

The Borrower has an Environmental and Social Risk Policy, grievance 

mechanisms, and human resources policies commensurate with its 

investment strategy. However, the Borrower will be obligated to update 

its worker grievance mechanism to include an anonymous pathway for 

submissions to meet the expectations listed in DFC’s 2020 

Environmental Policy and Procedures.
Annex B – Public Information Summary

Host Country(ies) Colombia

Name(s) of 

Borrower(s)/Guaranteed 

Party(ies)

Nu Colombia S.A.

Project Description The proceeds of the DFC Loan will be used to finance the expansion of 

the Borrower’s digital financial services business, including but not 

limited to working capital needs to support the growth of its credit card 

business, investments for new hardware, software, and product 

development and for general costs related to client acquisition initiatives 

in Colombia (the “Project”). As the business expands and clients 

develop personal credit histories, the Borrower will also offer personal 

savings accounts and customizable financial products, thereby 

enhancing financial inclusion.

Proposed DFC Loan 3-year senior unsecured $150mm loan

All-Source Funding $241mm

Policy Review

Developmental Objectives While Colombia has made significant progress in financial inclusion 

across the country in recent years, only approximately 35% of adults 

have access to credit products. This relatively limited penetration rate of 

personal credit has historically limited Colombians’ ability to pay for 

essential goods and services (e.g., education and healthcare expenses), 

prompted the use of informal lending channels, and hindered the 

prospect of developing a formal credit history for future personal 

consumption and/or entrepreneurial needs. 

In response to this challenge, the Project is expected to have a positive 

development impact in Colombia by implementing an innovative 

fintech business model to expand access to credit to lower- and middleincome individuals and households throughout the country. 

Additionally, the Project seeks to facilitate access to credit to 

traditionally financially underserved populations, including individuals 

and households that previously have not had access to credit, those 

populations living in small towns and rural areas, and women. DFC has 

qualified the Project as 2X based on the Borrower’s undertaking to meet 

and/or exceed the 2X criteria for women representation in its leadership 

team and percentage of women borrowers in its credit card portfolio. 

Given the Project characteristics, the Project is categorized as Highly 

Impactful per DFC’s Impact Quotient (“IQ”).

Environment and Social 

Assessment

The Project has been reviewed against the DFC’s 2020 Environmental 

and Social Policies and Procedures manual (“ESPP”) and has been 

determined to be categorically eligible. DFC corporate loans to nonbanking financial services companies to address working capital needs 
DFC Board of Directors March 6, 2024 Meeting

Page 11

are screened as a Financial Intermediary C (FI-C) for environmental and 

social assessment. These downstream investments are expected to result 

in minimal adverse environmental and social impacts. Therefore, all 

those downstream investments have been pre-screened as low risk and 

further review and consent is not required for these investments. 

To ensure that the Borrower’s investments are consistent with the 

DFC’s statutory and policy requirements, the DFC loan will be subject 

to conditions regarding the use of proceeds. The primary environmental 

and social issues identified in this transaction relate to the need for an 

Environmental and Social Policy (“ESP”) that meets the 2012 IFC 

Performance Standards. 

Under the DFC’s ESPP, the Borrower is required to comply with 

applicable local and national laws and regulations related to 

environmental and social performance and applicable provisions of the 

2012 International Finance Corporation’s Performance Standard (“PS”) 

1 and 2. A desk-review based due diligence assessment indicates that 

because the Project will use DFC support for corporate activities in 

Colombia, significant adverse impacts concerning community health 

and safety, biodiversity, land acquisition and resettlement, indigenous 

peoples, and cultural heritage are not anticipated; therefore, PS 3, 5, 6, 

7, and 8 are not triggered at this time. The Borrower does utilize private 

security and therefore, relevant aspects of PS 4, Community Health, 

Safety and Security are triggered. 

The Borrower has an Environmental and Social Risk Policy, grievance 

mechanisms, and human resources policies commensurate with its 

investment strategy and that will require updating and strengthening 

meet the expectations listed in the DFC’s 2020 Environmental Policy 

and Procedures and IFC PS 1.