Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC5624 Date ISDS Prepared/Updated: 09/23/2010 I. BASIC INFORMATION A. Basic Project Data Country: Haiti Project ID: P121391 Project Name: Haiti Post-Disaster Partial Credit Guarantee Fund Task Team Leader: Juan Buchenau Hoth Estimated Appraisal Date: October 8, 2010 Estimated Board Date: November 4, 2010 Managing Unit: LCSPF Lending Instrument: Specific Investment Loan Sector: Micro- and SME finance (40%);Housing finance and real estate markets (40%);General finance sector (20%) Theme: Other financial and private sector development (60%);Small and medium enterprise support (40%) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 3.00 GEF Amount (US$m.): 0.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 0.00 Haiti Reconstruction Fund 12.50 Inter-American Development Bank 20.00 32.50 B. Project Objectives [from section 2 of PCN] The main objective of this grant is to support the restructuring of loans to viable borrowers affected by the recent earthquake and to improve the conditions for the supply of financial services in the country. The first component of the program, the PCGF, shall: (i) support the restructuring of loans from banks and cooperatives whose borrowers have been affected by the quake but are still viable, and (ii) support new lending to MSMEs and for housing in view of the reconstruction of the country. These objectives are consistent with the Haiti Recovery Plan (March 2010) which proposes the creation of partial credit guarantee funds to boost credit to productive investments and the provision of reconstruction credit for housing. They are also consistent with the objectives laid out by the BRH in its February 2010 proposal. The BRH wishes to double the loan-to-deposit ratio from 30 percent before the quake to 60 percent by 2015 to bring it in line with regional standards. It also expressed the wish to expand banking credit to SMEs and housing. Page 2 The second component, the technical assistance program, aims mainly at providing support for the design and implementation of a program to improve the conditions for the supply of financial services in the country. C. Project Description [from section 3 of PCN] (i) First Component: Partial Credit Guarantee Fund The Fund would have two Pillars. Each Pillar would correspond to a sub-fund. Pillar 1, which is conceived as a temporary window, would guarantee loans to viable customers up to a certain amount (estimated cut-off at US $ 1 million), whose loans have been restructured following the quake and who are expected to be able to comply with the obligations from these loans. This sub-fund is directed towards viable borrowers that have been negatively affected as a result of the quake and are expected to recover, but that need temporary help; it would also include additional loans extended to these borrowers to facilitate their recovery. Pillar 2, which is intended to operate sustainably and permanently) would guarantee new small loans (cut-off not yet determined), extended to existing borrowers outside the restructuring process or to new borrowers, with a particular focus on MSMEs and housing. In both Pillars, loans would be presented by banks to the fund for coverage. For this, banks will provide information that allows identifying each loan, as well as its terms and conditions. Large loans (above a threshold to be determined) would have to undergo a review by the fund administrator before the issuance of the guarantee. In order to speed administrative processes and to reduce costs, guarantees for smaller loans will be granted in batches, which will be subject to review by sampling by the fund administrator. Claims presented to the fund will be paid as long as proper collection efforts by the corresponding bank and compliance with fund policies can be established. The Bank, IDB and HRF#s contributions would fund the window designed to support the restructuring of small loans. Any resources freed up after repayment of the restructured loans would be transferred to the window for new loans (Pillar 2) that is expected to be permanent. (ii) Second Component: Financial Sector Technical Assistance This component aims to provide support for the design and implementation of a program that will remove existing obstacles for the development of the financial sector, following up on the Financial System Stability Assessment (FSSA) of 2007. The BRH has suggested setting up a financial sector working group that would meet quarterly to discuss financial sector issues and coordinate donor#s activities. The second component would help this group and provide technical inputs for the design and implementation of a financial sector strengthening program, which would be implemented mainly with funding from other sources (FIRST, IADB, US Treasury, Government of Haiti, etc.). D. Project location (if known) Page 3 Zones affected by the earthquake. The project would help establish a partial credit guarantee fund, which would extend guarantees to loans whose borrowers have been affected by the recent earthquake. These borrowers would be mostly located in the zones affected by the earthquake. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] As this project is prepared and to be implemented jointly with the IADB (parallel financing), steps are being taken to have a single mechanism to carry out the environmental and social screening process. After discussion with the IADB team, the Bank's team suggests a twofold approach: a) to define a list of activities that may not be supported by the PCGF, in the case of small loans and b) to carry out an individual assessment of each loan to identify potential social and environmental risks as well as mitigating measures in the case of the large loans. Large loans would be subject to the same exclusion list as the small loans. Small loans are intended to be processed in batches and this process would involve the completion of screening based on negative list. The implementing agency for the PCGF will be the Central Bank of Haiti (BRH), and most particularly the Fonds de Developpement Industriel (FDI) for the Pillar 1. Currently the FDI counts with a limited number of professional staff. The project is planning significant technical assistance to reinforce the FDI's capacity. An Environmental Management Framework is being elaborated in coordination with the IADB. This Framework will be included in the operation manual. Prior to disbursement, the implementing agency will submit an action plan in form and substance acceptable to the World Bank and IDB which will define the actions, responsible parties and costs to implement the Environmental Management Framework. F. Environmental and Social Safeguards Specialists II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X As this project is prepared and will be implemented jointly with the IDB (parallel financing), steps are being taken to have a single mechanism to carry out the environmental and social screening process. Natural Habitats (OP/BP 4.04) X To be determined Forests (OP/BP 4.36) X Pest Management (OP 4.09) X To be determined Page 4 Safeguard Policies Triggered Yes No TBD Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: F - Financial Intermediary Assessment III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: 09/17/2010 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: N/A C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. An Environmental Management Framework is being elaborated in coordination with the IADB. This Framework will be included in the operation manual. IV. APPROVALS Signed and submitted by: Task Team Leader: Mr Juan Buchenau Hoth 08/03/2010 Approved by: Regional Safeguards Coordinator: Mr Glenn S. Morgan 08/03/2010 Comments: Sector Manager: Ms Lily L. Chu 08/03/2010 Comments: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 5