IFC Board Approves Management Action Plan in Response to CAO Investigation Related to IFC’s Investment in ABBank of Viet Nam

Washington, March 26, 2026 - The IFC Board of Executive Directors approved IFC's Management Action Plan in response to an investigation of IFC's investment in An Binh Joint Stock Bank (ABBank) of Viet Nam conducted by the Compliance Advisor Ombudsman (CAO), IFC's independent accountability mechanism.

In 2010, IFC invested US$40.6 million in ABBank with the aim of increasing financial inclusion, creating jobs and reducing poverty in Viet Nam. The project aligned with IFC's fiscal 2010-2012 strategy for Viet Nam, which aimed to enhance the country's economic competitiveness during its transition to a market economy and promote inclusive growth. IFC completed a planned divestment from its ABBank shareholdings in May 2024. Prior to IFC's investment in 2010, ABBank held a 10.31 percent equity stake in EVN International Joint Stock Company (EVNI), a subsidiary of Viet Nam Electricity that had contributed to the development of the Lower Sesan 2 hydropower project in Cambodia prior to IFC's investment. No proceeds from IFC's equity investment were used to finance EVNI or the hydropower project.

CAO's investigation responds to three complaints found eligible in 2018 from Cambodian communities in the reservoir area and upstream of the hydropower project who raised concerns about significant, adverse environmental and social (E&S) impacts from the project. These included issues related to community resettlement, impacts on livelihoods, threats against community members opposing the project, damage to socio-culturally significant sites such as ancestral graves and spiritual forests, and impacts on local fish populations.

CAO's investigation, completed in November 2024, found that IFC did not conduct an adequate pre-investment E&S due diligence of ABBank and, during supervision, did not monitor the E&S commitments in its legal agreements with the client. CAO found related harm to the complainants concerning community resettlement, impacts on livelihoods and biodiversity, threats against community members opposing the project and damage to socio-culturally significant sites, and recommended both project and systemic-level actions.

IFC's position as stated in the Management Action Plan is that neither the Lower Sesan 2 hydropower plant, where the alleged harm occurred, nor EVNI were required to apply IFC E&S Policies as they did not receive IFC financing. IFC is therefore unable to offer any project-specific actions. IFC's Board-approved Management Action Plan outlines the following systemic-level actions:

· IFC agrees to additional efforts to enhance financial institution due diligence and dedicate more resources to monitoring high- and medium-high-risk FI clients and to have E&S staff receive regular training on IFC Performance Standards and procedures, including recent FI-focused sessions and workshops for E&S specialists.

· In 2023, IFC developed a new Guidance Note on FIs that sets out to (i) further clarify what is considered a higher E&S risk transaction; (ii) include the definition of a higher E&S risk transaction; (iii) clarify the circumstances requiring enhanced FI due diligence; (iv) define E&S responsibilities of FI clients with regard to sub-projects and sub-sub-projects; (v) codify sub-project disclosure commitments; and (vi) enhance clarity on the scope of application of E&S requirements, including the IFC PSs, by FI clients for higher E&S risk transactions.

· IFC has developed and strengthened its environmental and social review procedures, which is accompanied by tipsheets that provide guidance for IFC staff on due diligence and monitoring for FI investments.

· IFC agrees to develop a new tipsheet providing staff guidance on assessing FI clients' capacity needs, as well as guidance for IFC staff to better use its leverage in different types of FI projects, including explicit guidance on linking E&S commitments in the Environmental and Social Action Plan (ESAP) to investment milestones such as commitment, first disbursement and subsequent disbursements.

CAO will monitor effective implementation of the actions set out in IFC's Management Action Plan in an annual monitoring report and publish IFC's progress reports on its website.

More information about this case, including the CAO Investigation Report and IFC Management Action Plan, are available here.

Case Webpage:
https://www.cao-ombudsman.org/case/cambodia-financial-intermediaries-01-03

Investigation Report:
https://www.cao-ombudsman.org/sites/default/files/downloads/CAO-InvestigationReport-CambodiaFI0103ABBank-Nov2024-ENG.pdf

IFC Management Report and Management Action Plan:
https://www.cao-ombudsman.org/sites/default/files/downloads/IFC-ManagementReport-MAP-March2026-ENG.pdf

About CAO

The Compliance Advisor Ombudsman (CAO) is the independent accountability mechanism of the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), members of the World Bank Group. CAO's mandate is to address complaints from people affected by IFC and MIGA projects in a manner that is fair, objective, and constructive, improve environmental and social outcomes, and foster accountability and learning to reduce the risk of harm to people and the environment. For more information, visit https://www.cao-ombudsman.org.