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Summary of Environmental and Social Management System (ESMS) -Development Bank Ghana

Summary of Environmental and Social Management System (ESMS) -Development Bank Ghana


The core mandate of the Development Bank Ghana (DBG) is to alleviate financing constraints faced by micro, small and medium enterprises (MSMEs) and small corporates in agribusiness, manufacturing and high-value services through the provision of wholesale financing and partial credit guarantees to eligible financial intermediaries (to be known as Participating Financial Institutions - PFIs) for on-lending to an underserved MSME sector in Ghana. DBG aspires to be Ghana's primary development finance institution, promoting growth and sustainability in the financial sector.


DBG recognizes that in the delivery of its lending and investment, it may be exposed through the PFIs to the Environmental and Social (E&S) risks associated with the business activities of the sub-borrowers and sub-projects they finance. It is anticipated that potential E&S risks associated with some of DBG's activities will be substantial (E&S risk category B+ or FI/B+). To this end, DBG has established an environmental and social management system (ESMS) to identify, manage and monitor E&S risks arising from its activities and those of its PFIs as well as their beneficiary end-borrowers.

DBG's ESMS is a framework that integrates environmental and social risk management into the Bank's wholesale financing decision-making processes. The ESMS includes sound objectives, well-defined procedures and responsibilities that will ensure that the Bank avoids and manages loan facilities that have potential environmental and social risks.

The system involves categorizing risk, screening, conducting environmental and social due diligence prior to loan agreements and disbursements; and provides adequate monitoring of PFIs during the term of the loan agreement. DBG will ensure that adequate financial and human resources, as well as technical assistance activities needed to effectively implement the ESMS, are made available within the institution.

Environmental and Social Management Policy Commitments

The Board of Directors of DBG approved the Environmental and Social Management Policy and associated Procedures on December 1, 2021. This Policy enables DBG to align itself to best international practice and local legislation governing environmental and social issues and forms the basis of DBG’s Environmental and Social Management System (ESMS). The ESMS commits the Bank to implement effective environmental and social management measures in all its activities, products, and services.

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