I. CHAIRMAN OPENS MEETING II. CEO's REMARKS III. PROJECT

Board of Directors Meeting

Thursday, September 5, 2024, 2:00 PM

Agenda

I. CHAIRMAN OPENS MEETING

II. CEO’s REMARKS

III. PROJECT APPROVALS

a. Nigeria Mortgage Refinance Company Plc

b. Enerjisa Enerji Üretim A.Ş.

c. First City Monument Bank Limited

d. Bank of the Philippine Islands

e. Copenhagen Infrastructure Growth Markets Fund II SCSp

f. Red Amigo Dal, SAPI de CV, SOFOM, ENR

IV. ADMINISTRATIVE APPROVALS

a. Minutes – June 5, 2024 Board of Directors

V. REPORTS TO THE BOARD

a. Risk Committee Report

VI. EXECUTIVE SESSION

VII. CHAIRMAN ADJORNS MEETING

Host Country

Nigeria.

Name of Borrower

Nigeria Mortgage Refinance Company Plc.

Project Description

The Borrower will use the proceeds of the Loan to make new loans

to eligible primary lending institutions (“PLIs”) by refinancing or

prefinancing eligible mortgage loans to eligible mortgage

borrowers across Nigeria with at least 20% of the Loan proceeds

targeting mortgage borrowers in the informal and low-income

market segments.

Proposed DFC Loan

$200,000,000.

All-Source Funding

Total

$228,571,429.

Policy Review

Developmental

Objectives

With more than 236 million inhabitants, Nigeria has the largest

population in Africa and is the sixth most populous country in the

world, but has a home ownership rate of just 25%, and less than

33,000 outstanding mortgage loans in aggregate. The country’s

current macroeconomic environment of high inflation and interest

rates has pushed millions of Nigerians into poverty and challenged

the ability for most households to secure affordable financing to

ensure their family members are adequately housed. This deficit

disproportionately impacts women, who face considerable barriers

in accessing land, property, and financial services. In Nigeria, men

are more than three times as likely to own a house or land as women.

This disparity consequently compromises a woman’s ability to

access credit facilities, among other financing products, due to lack

of sufficient collateral.

In response to these challenges, the Project seeks to provide

liquidity to Nigeria’s affordable mortgage market through

supporting the only Central Bank of Nigeria-licensed mortgage

refinance company. Proceeds from DFC’s support will be used to

on-lend to PLIs with the objective of refinancing or prefinancing

mortgage loans on affordable and accessible terms for homeowners.

As part of the Project, approximately 20% of the proceeds from

DFC’s loan will be allocated to informal and low-income borrowers

and an estimated 40% of the mortgages to be refinanced or

prefinanced will be those underwritten to women as borrowers or

co-borrowers. Given the Project characteristics, the Project has

received a score in the Highly Impactful tier of DFC’s Impact

Quotient.

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

direct loans to financial institutions for mortgage lending are

screened as a Category 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 Category C 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 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 the expansion of its mortgage lending portfolio in Nigeria,

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 IFC PS 4,

Community Health, Safety, and Security are triggered at this time.

The Borrower has an adequate environmental and social policy as

described in IFC PS 1, grievance mechanisms, and human resources

policies commensurate with its investment strategy. However, the

Borrower will be required to provide the DFC evidence that private

security guards are trained in accordance with requirements of IFC

PS 4 to meet the DFC’s 2020 Environmental Policy and Procedures.

Host Country

Türkiye / Upper Middle Income

Name of Borrower

Enerjisa Enerji Üretim A.Ş.

Project Description

DFC financing for the development, construction, ownership,

operation, and maintenance of a portfolio of wind power plants

located in the Republic of Türkiye

Proposed DFC Loan

$350,000,000

All-Source Funding

Total

$1,124,000,000

Policy Review

Developmental

Objectives

Türkiye imports nearly three-quarters of its energy resources and

relies heavily on fossil fuels to power its national grid. The

combination of foreign and nonrenewable dependency has hindered

Türkiye’s energy security and heightened its greenhouse gas

emissions, which have doubled in the past two decades. The Project

is expected to have a positive development impact in Türkiye by

fueling the government’s energy diversification strategy, helping to

decarbonize its grid through wind power, and improving Türkiye’s

energy independence. The wind farms are expected to generate

approximately 2.51 TWh per year, propelling the Borrower’s wind

generation from 3% to 14% of its energy portfolio and boosting

renewable energy installed capacity for the entire country by one

percent. Given the Project’s characteristics, it is categorized as

Highly Impactful per DFC’s Impact Quotient (IQ).

Environment and Social

Assessment

SCREENING:

The Project has been reviewed against DFC’s July

2020 Environmental and Social Policies and Procedures (ESPP)

and determined to be categorically eligible. The Project is

screened as Category A because large-scale wind projects are

considered to have significant adverse impacts that could be

diverse, irreversible, or unprecedented in the absence of adequate

mitigation measures.

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 of the

International Finance Corporation’s (IFC) 2012 Performance

Standards:

• PS1: Assessment and Management of Environmental and

Social Risks and Impacts;

• PS2: Labor and Working Conditions;

• PS3: Resource Efficiency and Pollution Prevention;

• PS4: Community Health, Safety, and Security;

• PS5: Land Acquisition and Involuntary Resettlement;

• PS6: Biodiversity Conservation and Sustainable

Management of Living Natural Resources; and

• PS8: Cultural Heritage.

The Project is not anticipated to impact any Indigenous Peoples as

confirmed by the Project’s Environmental and Social Impact

Assessments (ESIAs) and the lenders’ independent environmental

and social consultant (IESC). Therefore, PS 7 is not triggered at

this time. Applicable provisions of the IFC General

Environmental, Health and Safety (EHS) Guidelines, the EHS

Guidelines for Wind Energy, and the EHS Guidelines for Electric

Power Transmission and Distribution also apply to the Project.

ESIA Disclosure:

The ESIAs on the proposed Project will be

posted for public comment on DFC’s website from June 20-

August 19, 2024 for a 60-day period. To date, no comments have

been received.

Environmental and Social Risks and Mitigation

Measures:

Primary environmental and social risks associated

with the Project include direct and cumulative biodiversity

impacts, occupational health and safety, impacts to community

health and safety, labor management, contractor management,

resettlement, cultural heritage, and supply chain management.

The Borrower developed Environmental Impact Assessments

(EIAs) for the 9 sub-projects comprising the Project and is in

process of obtaining environmental approval (three of the sub-

project approvals have been challenged and supplemental studies

and submissions are being submitted to address this).

Supplemental ESIAs were completed for each sub-project to meet

lender requirements and associated E&S Management Plans

(ESMP) for all sites are currently being finalized. EIAs for the

Energy Transmission Lines (ETLs) are underway where

applicable with the aim of receiving all required approvals by the

end of 2024.

Environmental and Social Management System/ Plans.

At the corporate level, the Borrower has an E&S Governance

Framework and an integrated Quality, Health and Safety,

Environment and Energy Management System (QHSEE-MS) in

place certified to ISO 14001, ISO 45001, and ISO 50001. The

Borrower is drafting sub-project specific E&S management plans

and emergency response plans (ESMPs), which are currently

under review with the lenders’ IESC. The Borrower will be

required to provide finalized sub-project ESMPs that reflect the

risks and impacts identified in the final ESIAs.

The Borrower has established a project team to support the

development and construction of the sub-projects. This includes

two CLOs and an Environmental Specialist assigned to each of the

three main regions of the sub-projects. The Borrower will be

required to hire a corporate-level Biodiversity Specialist and

ensure adequate staffing and resources to implement site-level

plans.

Stakeholder Engagement and Grievance Handling

Substantial stakeholder engagement has been underway with

regards to the various EIA and resettlement processes, permitting,

and to meet lender requirements. The Borrower has drafted

Stakeholder Engagement Plans for each sub-project including a

grievance/request mechanism (GRM) to align with IFC PS1.

Biodiversity.

The sub-projects are primarily situated on forested and agricultural

terrain, with some located closer to coastal areas and others

nestled within mountainous landscapes. While none of the sub-

projects fall within protected areas under Turkish or international

conservation laws, several sub-projects were found to be located

in Key Biodiversity Areas (KBAs).

As part of the national EIA, the Borrower carried out biodiversity

surveys from August 2021 through May 2022, which did not

encompass a year’s worth of baseline data, as required by best

practice. Based on the available information, high- level critical

habitat assessments (CHAs) were conducted for each sub-project.

Across five of the sub-project sites, the presence of four

endangered avian species—the Dalmatian pelican, the short-toed

snake eagle, the lesser spotted eagle, and the black stork—as well

as a critically endangered plant species, Verbascum hasbenii, were

identified.

To obtain a full year’s worth of data, the Borrower enlisted a

qualified third party to conduct supplementary flora and fauna

surveys across all sub-projects from April to July 2024. The

Borrower aims to present the results of these supplementary

surveys by August 2024 and update all relevant documentation by

the fourth quarter of 2024.

Additional work is underway to: a) verify the presence of species,

particularly migratory birds, at each site; b) finalize CHAs for

each sub-project and to undertake a cumulative CHA for

migratory species that might be affected by several sub-projects;

c) enhance the mitigation strategies in the project-specific

biodiversity management plans (BMPs) and Biodiversity Action

Plans (BAP), if needed; d) develop models for collision risk; and

e) determine tailored shut-down-on-demand (SDOD) protocols for

each sub-project.

The Borrower will be required to provide updated biodiversity

management plans for each sub-project, including updated CHAs,

BAPs, and a cumulative collision risk assessment that includes the

ETLs and an updated organizational chart. The BMPs are to

include commitments to adhere to SDOD protocols, and a timeline

for appointing a specialist to develop a comprehensive Post-

Construction Fatality Monitoring (PCFM) protocol for birds and

bats, including a training program.

Community Health and Safety.

The Borrower has identified the primary community health and

safety risks associated with the sub-projects as noise pollution,

dust pollution, shadow flicker, blade and ice throw,

electromagnetic interference, traffic accidents, and the

transportation of abnormal loads. The ESIAs identify mitigation

strategies to manage these risks. Some of the strategies include the

identification of sensitive receptors, siting of turbines, distance to

receptors, scheduled shut down of turbines when shadow flicker

estimates exceed limits, and dust suppression. The IESC observed

that a few sensitive receptors within 700 meters of the turbines

were not adequately considered and therefore the Borrower will be

required to update and provide a comprehensive list of sensitive

receptors, including specific mitigation strategies (particularly for

shadow flicker and blade/ice throw), and to update the traffic

management plans to align with IFC PS 4.

The Borrower anticipates using private unarmed security guards

and the security risks are considered manageable. Nevertheless,

each sub-project and associated ETLs will be required to have in

place a security management plan.

Contractor Management.

The sub-projects will require a contracted workforce between 100-

600 workers per site during construction, which is estimated to

take approximately 10 months to complete. Each sub-project will

require 4 or 5 contractors to complete civil works, electrical

works, ETL construction, and turbine installation. The Borrower’s

human resources department is responsible for managing the labor

performance of contractor and subcontractors. The Borrower has

drafted a Human Resources and Worker Management Plan that is

applicable to contractors. The Project will be required to finalize

and fully implement this plan and ensure that contractor

management aligns with IFC PS2, including monitoring and

developing a code of conduct that is applicable to all contractors’

and sub-contractors’ workers and addresses Gender-based

Violence and Harassment (GBVH).

Resettlement Impacts.

The establishment of sub-projects and the associated ETLs is

anticipated to result in primarily economic, not physical,

displacement. However, the Project is still assessing eight

identified structures that are located near turbines to determine

their use and status. Resettlement Action Plans (RAPs) for each

sub-project are being developed to meet IFC PS 5 and national

requirements. In total, the Project will require 1,257,858.32 m2 of

privately owned lands affecting 853 PAPs who will be

economically displaced. Land procurement is led by a Land

Acquisition Manager while resettlement activities are led by the

Social Manager with the support of the CLOs. The Project will be

required to implement PS5 compliant RAPs for all sub-projects,

including livelihood resettlement plans and ensure that land

acquisition processes for ETLs align with IFC PS5.

Cultural Heritage.

The ESIAs indicate that the sub-projects have the potential to

impact tangible and intangible cultural heritage. The Borrower is

developing a Cultural Heritage Management Plan including a

Chance Finds Procedure to mitigate impacts, with the support of a

third-party consultant.

Supply Chain.

The Borrower has in place an agreement with Enercon Global

GmbH, a German wind turbine manufacturer and service provider,

and its Turkish subsidiary (collectively, “Enercon”), whereby

Enercon would be the exclusive supplier and servicer of turbines

for the Project. Enercon has a Human Rights policy that is

reflected in its corporate Code of Conduct and Supplier Code of

Conduct, which commits to respecting human rights, upholding

anti-discrimination and equal opportunity, prohibiting forced and

child labor, and providing adequate wage, working time and

grievance mechanisms. The Project’s ESMP will include a Supply

Chain Management Plan.

Host Country

Federal Republic of Nigeria

Name of Borrower

First City Monument Bank Limited

Project Description

Direct loan to support the financing of a portfolio of small and

medium enterprise (“SME”) loans in Nigeria, with a focus on

women-owned and women-led SMEs, and to support longer-tenor

loans to SMEs.

Proposed DFC Loan

$100,000,000

All-Source Funding

Total

$125,000,000

Policy Review

Developmental

Objectives

SMEs in Nigeria comprise up to 96% of businesses, 84% of jobs,

and 50% of GDP, yet they face a financing gap of up to $156

billion. Limited banking history, a lack of collateral, and a

perception of high repayment risk are significant barriers to SME

finance in the country. Additionally, an estimated 35% of

Nigeria’s SMEs are women-owned/led, and these enterprises are

estimated to face a financing gap of up to $22 billion. Women

entrepreneurs face numerous barriers in accessing finance,

including gendered social norms, inheritance trends, and marriage

practices that promote male ownership of household assets.

In addressing these challenges, the Project is expected to have a

positive development impact in Nigeria by expanding lending to

SMEs. The DFC Project will also provide access to finance for

women-owned/led enterprises in Nigeria with a target that at least

20% of proceeds will support this segment. Given the Project

characteristics, the Project is categorized as Highly Impactful per

DFC’s Impact Quotient.

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 loans to financial institutions for SME on-lending 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

to finance on-lending to SMEs in Nigeria, 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 to meet the expectations listed in the

ESPP and IFC PS 1.

Host Country

The Philippines

Name of Guaranteed

Party

Bank of the Philippine Islands

Project Description

A loan portfolio guaranty to support lending to small and medium

enterprises (“SMEs”) outside Metropolitan Manila with a

prioritization for agribusinesses.

Proposed DFC

Loan/Guaranty

$75,000,000 maximum DFC liability. 8-year coverage period.

All-Source Funding

Total

$150,000,000

Policy Review

Developmental

Objectives

SMEs, especially those working in the agricultural sector in the

Philippines, face substantial challenges in accessing credit from

commercial banks. The Government of the Philippines, through a

central bank mandate, has sought to increase agribusiness lending

by directing commercial banks to set aside 25% of total loanable

funds for agriculture to address the $6.3 billion financing gap in this

sector. However, many local financial institutions have difficulty in

meeting these agribusiness targets, particularly given the sector’s

weak information infrastructure and lending institutions’ limited

risk appetites. In addressing these challenges, the Project is

expected to have a positive impact in the Philippines by expanding

SME lending to enterprises outside of Metropolitan Manila, with a

particular focus on agricultural SMEs. Given the Project

characteristics, the Project is categorized as Highly Impactful per

DFC’s Impact Quotient.

Environment and Social

Assessment

The Project has been reviewed against the DFC’s 2024

Environmental and Social Policies and Procedures manual

(“ESPP”) and has been determined to be categorically eligible.

DFC LPGs to financial institutions for the expansion of lending to

SMEs 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 Guaranteed Party’s loans are consistent with the

DFC’s statutory and policy requirements, the DFC LPG 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 Guaranteed Party 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 an LPG to a financial institution for lending to

SMEs outside of Metropolitan Manila with 25% of lending going

to agribusiness in the Philippines, significant adverse impacts

concerning community health and safety, biodiversity, land

acquisition and resettlement, indigenous peoples, and cultural

heritage are not anticipated; therefore, PS 3, 4, 5, 6, 7, and 8 are

not triggered at this time.

The Guaranteed Party does have an environmental and social

policy as described in IFC PS 1, grievance mechanisms, and

human resources policies generally commensurate with its

investment strategy. However, to the extent the Guaranteed

Party’s policies do not align with DFC’s 2024 Environmental and

Social Policy and Procedures, the Guaranteed Party will be

required to provide updates to its human resources policies and its

Environmental and Social Policy to align with DFC’s 2024

Environmental and Social Policy and Procedures.

Host Countries

Global, with a focus on the following countries:

Asia: Indonesia (UMIC), Philippines (LMIC), Vietnam (LMIC),

India (LMIC)

Latin America: Brazil (UMIC), Colombia (UMIC), Mexico

(UMIC)

Central and Eastern Europe: Bulgaria (HIC), Estonia (HIC), Greece

(HIC), Latvia (HIC), Lithuania (HIC), Poland (HIC), Romania

(HIC)

South Africa (UMIC)

Name of Fund

Copenhagen Infrastructure Growth Markets Fund II SCSp (“the

“Fund”), domiciled in Luxembourg

Name of Fund Manager

Copenhagen Infrastructure Partners P/S (“CIP” or the “Fund

Manager”), based in Copenhagen

Project Description

The Fund will invest in the development and construction of

renewable energy infrastructure, with a focus on large-scale wind

and solar PV greenfield projects.

Proposed DFC Equity

Investment

Up to $75 million

Target Fund Size

$3 billion

Policy Review

Developmental

Objectives

Globally, investments in clean energy need to reach $4.5 trillion per

year by 2030 to limit global warming to 1.5°C. In 2023, an

estimated $1.7 trillion was invested in clean energy, representing a

shortfall of $2.8 trillion. Investment needs vary across regions, and

with energy comprising nearly three-quarters of greenhouse gas

emissions globally, large investments are needed to reduce overall

emissions and allow populations to adapt to increasingly climate-

vulnerable environments.

In response to these challenges, the Fund is expected to have a

positive development impact in markets across Asia, Latin

America, Africa, and Europe by providing much needed capital to

greenfield renewable energy projects and platforms. The Fund

Manager will build on its previous expertise to take primarily

controlling stakes that allow for strategy and operating influence

over its investments. Given the Fund’s characteristics, it is

categorized as Highly Impactful per DFC’s Impact Quotient.

Environment and Social

Assessment

Financial Intermediaries (“FIs”) with downstream investments that

pose high environmental and social risks are screened as Category

FI-A for the purposes of environmental and social assessment.

Downstream investments made by the FI will be screened for

categorical prohibitions and subject to DFC’s public disclosure

requirements.

Climate change resilience assessments for FI projects are not

required under DFC’s policies. However, the FI will be required to

include climate change resiliency assessments for any Category A

projects as part of the ESIA process.

Applicable Standards:

Under DFC’s ESPP, the FI 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.

An on-site and virtual due diligence assessment indicates that

because the Project involves an investment in a financial

intermediary, significant adverse impacts with respect to

community health and safety, biodiversity, land acquisition and

resettlement, indigenous peoples, and cultural heritage are not

anticipated. Therefore, PS 3, 4, 5, 6, 7, and 8 are not triggered by

DFC’s investment; however, DFC’s ESPP requires the FI to

maintain an ESMS that appropriately identifies, assesses, manages,

and monitors risks with respect to the IFC Performance Standards

and the General and Sector-specific EHS Guidelines. It is

anticipated that the FI’s subprojects may trigger the following PS:

1, 2, 3, 4, 5, 6, 7, and 8.

Environmental and Social Risks and Mitigation:

Key risks

associated with the FI include the need for rigorous E&S

management system and organizational capacity at the FI to oversee

a portfolio of high risk projects and the need for PS 2-complaint

labor, workforce, and procurements policies to manage risks related

to infrastructure construction and high risk supply chains. The FI

has developed an ESMS but will require updates to fully align with

DFC’s requirements, including IFC Performance Standards. The

FI’s ESMS requires that E&S risks be monitored at subproject sites,

with oversight by the FI. DFC’s due diligence indicates that the FI’s

E&S Policies are generally aligned with requirements, and it

maintains sufficient E&S capacity commensurate with the scale and

nature of the FI’s downstream investments. The FI will be subject

to DFC monitoring to ensure compliance.

The FI will be required to incorporate DFC’s categorical

prohibitions as part of their environmental and social screening

procedures. The FI will be required to update its monitoring

procedures and provide an annual E&S monitoring report

throughout the DFC investment. The FI maintains a suite of HR

policies; however, to further strengthen its workforce management,

the FI will need to update aspects of these policies and procedures

in line with IFC Performance Standards 1 and 2.

Host Country

Mexico

Name of Guarantied

Party

Goldman Sachs Bank USA (“GS Bank”)

Project Description

DFC will provide an 80% guaranty to GS Bank for a debt facility

to Red Amigo Dal, SAPI de CV, SOFOM, ENR (“Konfio”).

Proposed DFC

Guaranty

$340,000,000

All-Source Funding

Total

$385,000,000

Policy Review

Developmental

Objectives

In Mexico, small and medium enterprises (“SMEs”) represent 98%

of all businesses, 75% of employment and produce 50% of its GDP,

yet they face an estimated $163 billion financing gap. Women-

owned/led enterprises comprise 35% of the SME segment but face

significant barriers to growth, particularly as it relates to access to

finance. In particular, there is significant gender bias in lending in

the country and many financial institutions see women-owned/led

SMEs as higher-risk clients, leading to less favorable credit terms

than their counterpart SMEs.

In response to these challenges, Konfio will lend 100% of the loan

proceeds to SMEs in Mexico with at least 30% of the loan proceeds

earmarked for 2X eligible SMEs. Konfio also will leverage an

innovative platform to efficiently qualify clients, disburse loans,

and service loans digitally. Notably, the platform eliminates gender

bias by using algorithms to make lending decisions based only on

applicants’ credit risk. DFC has qualified the Project as 2X based

on Konfio’s intent to meet the 2X criteria for leadership and

investments through financial intermediaries. Given the Project’s

characteristics, it is categorized as Highly Impactful per DFC’s

Impact Quotient (IQ).

Environment and Social

Assessment

The Project has been reviewed against the DFC’s 2024

Environmental and Social Policies and Procedures manual

(“ESPP”) and has been determined to be categorically eligible. The

DFC guaranty to GS Bank to increase its lending capacity to

Konfio, which lends to SMEs in Mexico, is 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 Project is consistent with DFC’s statutory and

policy requirements, Konfio will be subject to conditions regarding

the use of proceeds of the GS Bank loan. The primary

environmental and social issues identified in this transaction relate

to the need for an Environmental and Social Policy (“ESP”) of

Konfio that meets the 2012 IFC Performance Standards.

Under DFC’s ESPP, Konfio 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. Significant adverse impacts concerning community health

and safety, biodiversity, land acquisition and resettlement,

indigenous peoples, and cultural heritage are not anticipated; thus,

PS 3, 5, 6, 7, and 8 are not triggered at this time.

Konfio has environmental and social policies as described in IFC

PS 1, grievance mechanisms, and human resources policies that are

generally commensurate with their investment strategies. However,

Konfio will be required to update its environmental and social

policy and labor policy to fully align with DFC’s 2024

Environmental Policy and Procedures, including strengthening its

approach to client protection.