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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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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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Santander Central Bank Mandatory Reserves Coverage

$100 million
Summary of Proposed Guarantee

Project Description

This summary covers equity investments by Banco Santander S.A. (“Santander”) in its subsidiary in Argentina, Banco Santander Argentina S.A. (“Santander Argentina” or the “Bank”). The investor has applied for additional MIGA guarantees of up to USD100.0 million for a period of up to two additional years under the existing Santander Central Bank Mandatory Reserves Program in Argentina (the Project).

Spain-based Banco Santander is one of the largest global financial institutions in the world in terms of market capitalization with retail and commercial operations in countries across Europe, Latin America, and North America. Its subsidiary banks abroad are required to maintain reserves at the central banks in their respective jurisdictions, based on the volume of customer deposits that these subsidiaries have. Mandatory reserves contribute to Santander’s overall risk-weighted assets (RWA) at the consolidated level, resulting in less headroom for other assets at a given level of capital.

Environmental Categorization

Santander Argentina provides retail and consumer loans, small and medium enterprise (SME) and corporate finance services to clients in Argentina. MIGA analyzed the Bank’s portfolio for types of transactions, tenor, size, industry sectors, and exposure to MIGA’s exclusion list. Santander Argentina’s portfolio has corporate finance exposure to certain sectors that could have potential significant adverse environmental and social (E&S) risks and impacts such as oil and gas, agriculture and fisheries, construction and chemicals. This project has thus been categorized as FI-1 under under MIGA’s Policy on Environmental and Social Sustainability (2013).

As of December 2022, about 55% of the Bank’s lending is to retail, 30% to corporates, 15% to SMEs. The main sectors supported include agriculture and fisheries, food processing, construction, oil and gas. These are mostly medium to high-risk and certain sectors such as oil and gas can have potential significant adverse E&S risks and impacts. Santander Argentina has limited exposures to activities on the MIGA Exclusion List.

The main E&S considerations of this project relate to Santander Argentina’s ability to identify, assess, and manage the E&S risks and impacts associated with its lending activities and the management of labor matters.

MIGA also analyzed Santander Argentina’s E&S risk management procedures in line with the requirements of Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts (PS1), and Santander Argentina’s labor practices in line with the requirements of Performance Standard 2: Labor and Working Conditions (PS2). The applicable E&S requirements for this project will be: (i) MIGA Exclusion List; (ii) applicable E&S laws and regulations in Argentina; and (iii) MIGA E&S Performance Standards.

Santander Group is an Equator Principles financial institution and is also a signatory to other global sustainable/responsible finance initiatives. As a member of the Santander Group, Santander Argentina aligns its E&S risk management procedures with Santander Group’s Environmental, Social and Climate Risk Management Policy. Santander Argentina’s E&S risk management system (ESMS) is focused on transactions in four sensitive sectors – (i) mining and metallurgy, (ii) energy, (iii) oil and gas, and (iv) soft commodities. Transactions in these four sensitive sectors are assessed for E&S risks and impacts. The sector policies, reflect amongst other aspects, the E&S issues associated with the sectors, scope of application, best practice standards, as well as prohibited and restricted activities within the sectors. The Sector policies are adapted to consider the particular characteristics and development of the market in which the relevant Santander subsidiary operates. The ESMS was updated in October 2022 to incorporate MIGA’s E&S requirements – the scope of the ESMS was expanded to include all non-retail lending and to screen transactions against MIGA’s Exclusion List, applicable E&S laws as well as assessing transactions in accordance the MIGA Performance Standards for eligible corporate loans. Santander Argentina appointed a dedicated E&S officer who oversees the E&S risk management system. The implementation of the ESMS is considered adequate.

Santander Argentina has in place an external communication procedure for receiving and addressing E&S concerns and requests for information from third parties, in line with the requirements of PS1. MIGA also considered the Emergency Response Plan of Santander Argentina as part of the management system which was determined to be adequate.

Human resources and labor practices are compliant with the requirements of PS2. Amongst other aspects, Santander Argentina has labor policies and procedures that address terms of employment, recruitment, renumeration, and benefits, grievance management, training and others.

Santander Argentina has also satisfactorily completed and implemented the agreed E&S Action Plan (October 2022). Santander Argentina will be required to report periodically to MIGA on the implementation of the ESMS and application of the Performance Standards.

Development Impact

The aim of MIGA’s guarantee is to help Santander Group reduce the risk-weighting of some of its assets, which would lead to a reduction in Santander’s RWA on a consolidated basis. The RWA capacity that is freed up is expected to continue to support Santander Argentina’s lending activities and avoid deleveraging in a context of high economic fragility. The Project will also support climate finance lending, as well as increase access to Women-Owned Small and Medium Enterprises (WSMEs) and demonstrate the importance of adopting inclusive business models.

The proposed additional coverage continues to be consistent with the World Bank Group country engagement strategy in supporting inclusive recovery by encouraging private investment and job creation. In a context of high economic fragility and a shallow financial sector, the Project will support Santander Argentina’s lending activities to the SME, corporate and household segments, increasing access to finance and encouraging credit penetration.

The proposed Project continues to be aligned with MIGA’s FY21-23 Strategy and Business Outlook under its focus on supporting all clients and complementing market creation due to small size of the Argentine financial sector. In addition, the Project is contributing to MIGA’s strategic priority of demonstrating leadership global topics such as gender and climate.



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