32338 - CENTRAL AMERICAN MEZZANINE INFRASTRUCTURE FUND II LP

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Summary of Investment Information

Project Number

32338

Company Name

CENTRAL AMERICAN MEZZANINE INFRASTRUCTURE FUND II LP

Date SPI Disclosed

Nov 5, 2013

Country

Central America Subregion

Region

Latin America and the Caribbean

Projected Board Date

Dec 9, 2013

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Dec 21, 2024

Department

Regional Industry INF LAC & EUR

Industry

other

Previous Events

Approved : Dec 9, 2013
Signed : May 14, 2014
Invested : Jun 13, 2014

Sector

Infrastructure Fund

Project Description

The Central American Mezzanine Infrastructure Fund II LP (“CAMIF II” or the “Fund”) is a follow-on fund to the existing CAMIF fund (“Fund I”), in which IFC is currently an investor. Like Fund I, CAMIF II is a 12 year mezzanine Fund that will invest in operating and new (brownfield and greenfield) medium-sized companies/projects in infrastructure and related sectors in Central America, the Caribbean, Mexico and Colombia. The Fund will make subordinated long-term US dollar loans, with current coupon and equity participation features as well as straight equity investments. The Fund will be managed by a subsidiary of LAP Latin American Partners LLC (“LAP”). A first closing of US$80-150M is expected in November 2013 and a second closing reaching the target amount of $250M is expected up to one year later.

Associated Advisory Engagement

n/a

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	12.50
Equity	17.50

Development Impact

Reduce Infrastructure Bottlenecks: Fund will provide capital for infrastructure projects which will contribute to the competitiveness of the target region and will help eliminate critical infrastructure bottlenecks that limit growth and job creation. Economic and Private Sector Development: Fund will provide quasi-equity and equity capital to help promote growth and job creation in local communities. Demonstration Effects: Fund will strengthen investees from a financial and governance perspective and help them scale up their operations, thus making them more attractive targets for further investment. This will help to demonstrate the business case for private infrastructure projects and encourage more private investors to enter the sector in the target region.

Mobilization: IFC would be supporting a capable investment team and helping it to attract other DFIs and private investors in the Fund. This follow-on fund would probably be raised without IFC participation but most likely with a smaller size and more unbalanced liability structure. Collaboration in the Financing of Projects: IFC and CAMIF II can collaborate in co-financing of infrastructure projects. IFC can provide expertise (such as industry, environmental and social and product) and resources to improve the Fund's efficiency and help them continue building industry and country knowledge and incorporate best practices. Knowledge Transfer: By participating in the Fund's Advisory Committee, IFC would contribute to the implementation of CAMIF's investment strategy, by providing industry and country knowledge and advice on international best practices. AML Best Practices: Like Fund I, CAMIF II will implement a comprehensive Anti-Money Laundering and Combatting the Financing of Terrorism Policy, which will be based on IFC's latest standards. IFC's involvement in the Fund will promote implementation of these standards not only at the Fund and its investors' level, but also at the investee company level. E&S Best Practices: The inclusion of IFC's E&S sustainability standards and the monitoring of compliance by IFC will improve project quality in a manner not contributed by any other investor. IFC's presence will assist the fund managers to insist on and obtain compliance both when negotiating projects and once projects are in portfolio.

E&S Category Rationale / Risks and Mitigation

The Central America Mezzanine Infrastructure Fund II LP (“CAMIF II” or the “Fund”) is a follow-on fund to the existing CAMIF I Fund (“Fund I”), in which IFC is currently an investor. CAMIF II is a 12 year mezzanine Fund that will invest in operating and new (brownfield and greenfield) medium-sized infrastructure companies/projects in Central America, the Caribbean, Mexico and Colombia. Given the inherent environmental and social risks of some of the Fund’s target sectors (i.e., renewable energy, transportation and agribusiness) and the possibility of the Fund supporting projects with significant E&S risks and impacts this project has been classified as Category FI-1 according to the IFC’s Sustainability Policy. For this project, the Fund will be required to assess the potential investments against the IFC Exclusion List, host country laws and the provisions of the 2012 Performance Standards.

In accordance with IFC's Access to Information Policy, IFC will periodically disclose the names, locations and sectors of sub-projects that have been supported by IFC investments through private equity funds, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of January 1, 2023.

Investee	Country Of Investment	Sector
PROCESADORA ESPECIALIZADA DE ALIMENTOS, S.A. DE C.V.	Mexico	F-AH - Seafood Product Preparation and Packaging
VIRGIN MOBILE MEXICO S. DE R.L. DE C.V.	Mexico	N-AC - Mobile Telephony
PanTerra Gold Limited	Dominican Republic	B-BE - Gold
Five Energy Renewable Corp. SA	Honduras	D-AA - Construction and Real Estate
Zona Industrial de Procesamiento San Juan , S.A. de C.V.	Honduras	D-AA - Construction and Real Estate
Interocean	Panama	E-AC - Deep Sea Water Transportation
Hydro Systems	Guatemala	C-BA - Water and Wastewater Utilities
Industrias Martec	Central America Region	F-AH - Seafood Product Preparation and Packaging
ProNuvo S.A.	Costa Rica	F-AI - Other Food
JIA	Guatemala	F-AI - Other Food
RV4 Desarrollos	Guatemala	D-AA - Construction and Real Estate

As a Private Equity Fund, the main risks are associated with the Fund’s investments, which will include equity, quasi-equity or subordinated loan investments of between US$10 and US$20m in asset-based, capital-intensive segments of the infrastructure space in Central America and selected Caribbean countries including Mexico and Colombia. In addition, potential environmental and social risks and impacts derive from the Fund´s capacity to identify and manage the environmental and social risks associated with its lending activities to greenfield investments; particularly, lending to companies pursuing sustainable energy finance investments in renewables which sometimes tend to be perceived as controversial given their magnitude, location and potential impacts to indigenous peoples and natural habitats. Examples of renewable energy resources may include (but not be limited to) wind, geothermal, hydro, biomass, biogas and waste-to-energy.
For CAMIF 1, the Fund manager developed and implemented a satisfactory environmental and social management system (ESMS). The scope of the ESMS is on both undertaking the necessary environmental and social due diligence as well as monitoring the environmental and social performance and progress made with agreed action plans. CAMIF has undertaken environmental and social due diligence for all investments in Fund 1. The Fund has designated an environmental and social manager and an environmental coordinator, both officers have a background in environmental and social management. For this project, the Fund will be required to enhance the scope of the ESMS and include the provisions of the 2012 Performance Standards.

S.no	Title	Anticipated Completion Date	Status
1	Other1 - Enhance the ESMS to include the provisions of the 2012 Performance Standards.	04/13/2023	Completed

Contacts

For Inquiries About the Project, Contact

James Martin / Teseo Bergoglio
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Suite 910
Washington DC 20006
Tel: 202-530-3180

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Online form: available at https://www.cao-ombudsman.org/
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Voice mail: +1 202 458 1973
Email: cao@worldbankgroup.org
SMS, WhatsApp, Telegram, and Signal: +1 202 650 2627

CAO receives and addresses complaints in accordance with the CAO Policy, which can be accessed at: https://www.cao-ombudsman.org/policies-guidelines.

This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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