Total loan amounts to USD 247 million Led by FMO and other Development Finance Institutions 24 February 2016 Colombo: The LOLC Group is pleased to announce a landmark syndication obtained by three of its key financial institutions. The official signing ceremony of the loan agreements took place at the Cinnamon Grand Hotel in the presence of the Honourable Minister of Finance, Mr. Ravi Karunanayake, the Governor of the Central Bank of Sri Lanka, Mr. Arjuna Mahendran, ambassadors of the participant funding agencies and other dignitaries. A total of USD 247 million was received from multiple foreign funding partners and consists of 3 loans, demonstrating international investor confidence and reliability of the LOLC Group.This funding amount represents a significant national milestone, as it includes the largest syndication of the Non-bank Financial Institution sector in Sri Lanka. A USD 153.1 million loan was granted to Commercial Leasing and Finance PLC, through FMO (Financierings Maatschappij Ontwikkelingslanden), the Dutch Development Bank that provided the loan and acted as Mandated Lead Arranger and Facility Agent. The loan consists of a senior loan of USD 39.2 million from FMO and a USD 113.9 million syndicated loan from 11 distinguished funding partners for Commercial Leasing & Finance PLC (CLC). The 11 partners are: The OPEC fund for International Development (OFID) (USD 20 million); Finnfund- the Finnish Fund for Industrial Cooperation (USD 11 million); Proparco – a subsidiary of the Agence FranÃ§aise de DÃ©veloppement (AFD) (USD 10 million); BIO – the Belgian Investment Company for Developing Countries (USD 7 million); DEG – the German Investment and Development Corporation (USD20 million); OeEB the Austrian Development Bank(USD 10 million); responsAbility Investments AG (USD 12 million); Blue Orchard Finance (USD 10.1 million); Symbiotics (USD 9.0 million) and Dutch Oikocredit (USD 5 million). ACTIAM also participated by providing USD 5 million via FMO’s fund structure. Speaking on the occasion, Linda Broekhuizen, Chief Investment Officer of FMO, said, “FMO is proud to act as Mandated Lead Arranger and Facility Agent of this USD 153 million facility. It is encouraging to see so much commitment to job creation and economic growth, both among the other lenders and CLC. FMO is particularly proud to lead this facility for the LOLC Group, with which we have a long lasting relationship for more than 25 years. LOLC Grou’s efforts to strengthen small businesses and entrepreneurship in Sri Lanka is an important basis for sustainable economic development and lasting improvement of people’s living conditions in the country.” In addition to the syndicated loan transaction, FMO – in partnership with other lenders in the syndicate – is committed to supporting CLC with a tailored technical assistance programme to further strengthen CLC’s operation standards. The technical assistance includes capacity building in the area of Asset and Liability Management, environmental, social and governance standards, client protection principles and a management development program focused on leadership and skill training for employees. LOLC Finance PLC received a USD 69 million loan consisting of USD 30 million from the Asian Development Bank (ADB) and a USD 39 million syndicated loan from prominent Middle Eastern banks. Transcending business, this is also a symbolic moment in multilateral relations, as this is the first syndicated loan from a consortium of Middle Eastern banks to the NBFI sector Sri Lanka. The ADB syndication of USD 69 million to LOLC Finance PLC is structured in two tranches: Tranche A is for a period of 7 years and has been funded by ADB; and Tranche B is for a period of 3 years and has been funded by Emirates NBD Bank, Bank Muscat, First Gulf Bank, National Bank of Oman and Rakbank. ADB has acted as a Lender of Record for both the tranches, with Bank Muscat and First Gulf Bank as the Mandated Lead Arrangers for Tranche B, while Dubai Based Investment Bank, Alpen Capital ME Limited acted as the financial advisor. LOLC Micro Credit Limited, the largest microfinance company in the country, received a USD 25 million senior loan from ADB, making it the single-largest loan received by the company in the present financial year. In addition to the loan transaction, ADB will also provide a technical assistance package to LOLC Micro Credit Limited and LOLC Finance PLC, comprising mobile banking support and the development of Environmental and Social Management Systems. Over the years, these programs have played a vital role, supplementing funding assistance by providing LOLC with the training in the technology and procedures required to maintain their standing at the top level of the Sri Lankan finance industry. “ADB is very pleased to partner with LOMC and LOLC Finance to provide long-term funding to micro-entrepreneurs and SMEs- critical segments of the Sri Lankan economy. The ADB loans build upon our relationship with the LOLC Group, which was initiated with a loan in 2007. It also complements other funding that ADB has done recently to support growth of the private financial sector in Sri Lanka. In addition to senior loans, ADB partnered with a consortium of leading Middle Eastern Banks to provide a B loan to LOLC Finance to meet their expanding needs,” said Christine Engstrom, Director for Financial Institutions at ADB’s Private Sector Operations Department. The Honourable Minster of Finance of the Government of Sri Lanka, Mr. Ravi Karunanayake, in his statement, said: “On behalf of the Government of Sri Lanka, I would like to thank the overseas partners in this landmark transaction for placing their confidence in the LOLC Group. This is a proud occasion not just for the LOLC Group but for the country as a whole. These loans will greatly assist the macroeconomic environment, thereby restoring the confidence, stability and growth required as Sri Lanka is entering a new chapter in its economic development and we are optimistic that more investor interest of this magnitude will further fuel the nation’s progress. I would like to commend LOLC for tirelessly assisting in the development of the SME and Micro Segment activities, and for its success in securing this funding. The most efficient economic policies cannot completely eradicate uncertainties that a country faces, as borrowings from domestic and international markets are a necessity for economic progress. The government is making a strong effort to bridge the financial deficit and drive public finances on a sustainable path, and FMO, ADB and its consortium of partners need to be recognized for the great role they play in transforming the nation’s future.” Commemorating this landmark syndication, the Group Managing Director of LOLC Group, Mr. Kapila Jayawardena said, “We are pleased to be the recipients of near a quarter billion dollars by renowned Development Financial Institutions (DFIs) around the world. The group has one if not the largest array of international funding partners. These institutions consider LOLC Group as their preferred conduit in achieving their development and commercial goals. Over the years these partnerships have expanded and strengthened and contribution extends beyond funding. Our foreign partners have offered us invaluable assistance ranging from capacity building to exposure to global standards over the years, which has enabled us to achieve operational excellence offering the competitive edge. With such a strong platform as the long-lasting relationships we have created with the funders, I hope to see our Group harness our strengths and further promote our vision, especially in the micro and SME sector; inclusive, sustainable growth and flourishing prosperity for all Sri Lankans” .