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MIGA’s goal is to promote foreign direct investment into developing countries to support economic growth and more.

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Hands husking peas into a basket full of peas

Learn about the progress MIGA is making in its mission to support economic growth, reduce poverty and improve people’s lives.

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Explore different types of political risk insurance guarantees provided to investors and lenders.

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Explore global projects that support economic growth, reduce poverty and improves people’s lives.

Panama

Banco Nacional de Panamá – Social Housing and Small Businesses

$620 million
Financial Services
Summary of Proposed Guarantee
Proposed
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Project description

This summary covers loans from JPMorgan Chase Bank, N.A., and/or any of its subsidiaries or affiliates, HSBC Bank plc, and/or any of its subsidiaries or affiliates, and Other Lenders yet-to-be-identified to Banco Nacional de Panamá (BNP), the largest state-owned bank in Panama. 

MIGA’s coverage has been sought in relation to a Non-Honoring of Sovereign Financial Obligations by a State-Owned Enterprise (NHFO-SOE) guarantee for up to US$620 million to cover an up to US$520 million US dollar debt financing structure with a tenor of up to 5 years and 1 month.

The proposed project involves the expansion of mortgage lending to lower-income households by BNP as well as increase access to credit to MSMEs in Panama. As the largest state-owned bank in the country, BNP is a key agent in helping the Government of Panama ensuring access to financing across the country.

Environmental Categorization

The MIGA project will support retail mortgage loans and lending to small and medium enterprises (SMEs).  Retail mortgages and SME transactions are typically considered low to medium-risk transactions, with environmental and social (E&S) risks and impacts that can be addressed through mitigation measures. The project has thus been categorized as FI-2 in accordance with MIGA’s Policy on Environmental and Social Sustainability (2013). 

The main E&S aspects of this project relate to BNP’s ability to identify, assess, and manage the E&S risks and impacts associated with its lending activities and the management of labor matters at BNP. MIGA analyzed BNP’s portfolio for types of transactions, tenors, sectors, and exposure to MIGA’s Exclusion List. MIGA also analyzed BNP’s E&S risk management procedures for lending activities in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and BNP’s labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2). 

For the purposes of the MIGA guarantee, BNP will be required to assess SME transactions against: (i) MIGA Exclusion List; and (ii) applicable E&S laws and regulations in Panama. 

As of December 2023, BNP’s portfolio included the following sectors/types of loans:  residential mortgages, 35%; personal loans, 20%; public sector loans, 13-%; commercial loans, 15%; agriculture loans, 9%; financial institutions, 7%; and industrial loans, 1%.  BNP has no exposure to activities on the MIGA Exclusion List or coal-related projects.

BNP is an existing client and in relation to E&S risk management, BNP implements an E&S risk management system for identifying, assessing, and managing E&S risk and impacts associated with its lending activities. The system covers screening against the exclusion list; assessment of E&S risks and impacts; compliance with local E&S laws as well as identification of E&S conditions of lending as required.

As an existing client, BNP has emergency response procedures which are in line with the requirements of PS1. BNP also has labor policies and procedures that address terms of employment, recruitment, renumeration, benefits, grievance management and non-discrimination. 

For the proposed guarantee, BNP will be required to report annually to MIGA regarding project portfolio, the implementation of the E&S procedures as well as labor practices.

Development impact 

The Project is intended to facilitate increased access to credit toward first-time low-income households and micro and small medium sized enterprises in Panama. By way of targeting vulnerable and underserved groups of the population, the Project helps address the issue of persistent inequality, reinforces inclusive growth and demonstrates development reach. 

The Project is aligned with the World Bank Group Country Partnership Framework FY24-FY28 for Panama under the agenda of Inclusive Job Creation. 

 

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MIGA supports its clients (as defined in MIGA Policy on Environmental and Social Sustainability) in addressing environmental and social issues arising from their business activities by requiring direct investment clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities. MIGA support to Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations as per the requirements of Performance Standards 1. 

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for MIGA. The CAO is mandated to address complaints from people affected by MIGA-guaranteed business activities in a manner that is fair, objective, and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of MIGA.

Independent of MIGA management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of MIGA’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of MIGA-guaranteed business activities that is within the mandate of the CAO. They can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of a MIGA-guaranteed business activity. Complaints can be submitted to the CAO in writing to the address below:


Compliance Advisor/Ombudsman

International Finance Corporation

2121 Pennsylvania Avenue NW

Room F11K-232

Washington, DC 20433 USA

Tel: 1 202 458 1973

Fax: 1 202 522 7400

E-mail: cao-compliance@ifc.org

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