WCS Crisis Response Prime Bank The proposed Project is an up to US$35 million Working Capital Solutions (WCS) facility to be extended to Prime Bank Limited (Prime Bank or the Bank) in Bangladesh, under the FIG COVID-19 Emergency Response WCS Envelope (WCS Envelope). The WCS Envelope is designed to provide funding to existing IFC client banks in emerging markets that will then extend new trade-related or working capital loans to companies whose cash flows have been disrupted by the global outbreak of the coronavirus pandemic. This proposed Project is a one-year facility, renewable for an additional one year, for a maximum aggregate tenor of two years. This Project will support working capital, trade finance and FX liquidity needs of the sub-borrowers (export/import-based SMEs and Corporates) through Prime Banks Off-Shore Banking Unit.  In addition, IFC as implementing entity of the IDA Private Sector Window (PSW) Blended Finance Facility is expected to support working capital loans in PSW eligible countries under the WCS Facility with a first loss guarantee of up to US$215 million (blended concessional finance co-investment). Without the de-risking provided by IDA PSW, IFC will be limited in its ability to support Working Capital loans in IDA PSW countries given the increased demand for financing and the high risk in IDA PSW countries. This support is targeted in the context of responding and helping with the resilience measures around COVID-19 crisis.  The level of concessionality provided to the WCS Facility by the blended concessional finance co-investment is estimated to be approximately 3% of the total PSW eligible facility size, which will be up to US$860 million. This estimate is based on the difference between (i) a reference price (either a market price if available; the price calculated using IFCs pricing model, which comprises three main elements: risk, cost and profit; or a negotiated price) and (ii) the concessional price being charged by the blended concessional finance co-investment. Further details and historical information on estimated subsidy levels in IFCs blended finance portfolio can be found at: www.ifc.org/blendedfinance. As is the case with all of IFCs blended concessional finance co-investments, this project has been assessed against the Enhanced Blended Concessional Finance Principles for DFI Private Sector Operations adopted by IFC and more than 20 other DFIs in 2017.  Further information on these Enhanced Principles and IFCs blended finance approach and governance can also be found at: www.ifc.org/blendedfinance. To support this increase in trade volumes at this most critical time, IFC is starting this support through existing clients while remaining open to engaging with other eligible financial institutions providing working capital in emerging markets. This proposed Project is estimated to provide ~US$133 million of liquidity in aggregate over the maximum life of the Project (up to 2 years) to Prime Bank, which will then on lend to up to 110 export-import based corporate and SME customers and support critical sectors like RMG/textile, Power, Pharma, Chemical, etc.
 
By sustaining the Banks' ability to provide these services, IFC's proposed facility is intended to promote the resilience of trade finance markets, as well as broader stability that comes about by providing for the going concern of market participants in Bangladesh. Turbulence in global funding markets, among other factors, has made it difficult for the extensive network of clients and partner banks to maintain their role as an enabling platform for liquidity to multiple emerging markets, many experiencing their own acute liquidity shocks while the need for liquidity increases. IFC expects the facility to attract additional private sector investors and partners to support emerging market liquidity, strengthening the market's ability to absorb shocks imposed by the current crisis.