32640 - GC Credit Opportunities GP Limited

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Summary of Investment Information

Project Number

32640

Company Name

GC CREDIT OPPORTUNITIES FUND, LP

Date SPI Disclosed

Nov 12, 2012

Country

Middle East, Pakistan, and Afg Region

Region

Middle East

Projected Board Date

Mar 11, 2013

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 21, 2024

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Mar 11, 2013
Signed : Apr 1, 2013
Invested : Apr 15, 2013

Sector

Mezzanine Fund

Project Description

The project consists of a US$20 million equity investment, not to exceed 20% of total commitments, in GC Credit Opportunities Fund, L.P (the “Fund”). The Fund, sponsored by Gulf Capital Pvt. JSC (“Gulf Capital”), has a target size of US$300 million and focuses on a diversified portfolio of debt instruments including, but not limited to, mezzanine instruments, preferred equity securities, high yield debt securities, convertible and other similar income producing securities and obligations (or options, warrants or equity interests relating thereto) in the Middle East and North Africa (“MENA”) region (collectively, the “Target Region”) with a majority of the Investments expected to be made, directly or indirectly, in companies in the Levant, Turkey and Egypt, as well as in the Gulf Cooperation Council countries of Bahrain, Kuwait, Oman, Qatar, the Kingdom of Saudi Arabia and the United Arab Emirates. The Fund may invest up to 20% of total commitments in companies that are headquartered, operate principally, or founded outside the Target Region, but which have operations and/or interests in the Target Region.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

Development Impact

- Fund focuses on growth midcaps and SMEs, which lack access to financing especially the growth capital type. Only 20% of MENA SMEs have access to credit, lowest in the World; - Establishment of credit and mezzanine funds in the region introduces additional and complementary sources of financing to the financial markets which are currently dominated by state-owned banks; - Focus on midcap and SMEs fosters job creation in a region where youth unemployment rate is at 24%; higher than any other region; - Proactive role played by the Fund is a part of its strategy in helping the companies execute growth strategies through balance sheet optimization, board seat positions and implementing operational improvements; all of which would lead to improved governance and private sector development.

- Catalytic role: IFC's presence will increase the credibility of the manager and help attracting institutional and international commercial investors. Without IFC support, the Fund might not increase its size and stay as a captive Fund of Gulf Capital. - Demonstration Effect: Support for a first-time fundraising team. - E&S Standards: The team has never worked with a DFI before. IFC's contribution would be significant in enhancing the GP's capabilities in the ESG matters. - Additional financing through co-investments: IFC can assist the investee companies by providing co-investment/debt financing to help complete their financial and business plans.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Not Applicable	Yes/No		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

This is a new investment in second closing of Gulf Capital Credit Opportunities Fund, L.P (the “Fund” or “GC Credit”), a mezzanine fund, focused on small and medium enterprises in the Middle East and North Africa and Turkey. The project has been classified as "Category FI-1" according to IFC's Environmental and Social Review Procedures due to potential exposures to textile, oil and gas, water related infrastructure and services, aluminum, construction, pharmaceuticals, construction related consumer durables. The expected portfolio will likely comprise of investments in areas of low to high E&S risks such as telecommunication, software, textile, consumer finance, oil and gas, car leasing, water related infrastructure and services, aluminum, construction, pharmaceuticals, construction related consumer durables. The Fund will be required to ensure compliance with the IFC Performance Standards, the host country laws and regulations and the Exclusion List.

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, 2025.

Investee	Country Of Investment	Sector
ADES	Arab Republic of Egypt	B-AA - Oil and Gas Exploration
Evolvence Knowledge Investments	United Arab Emirates	T-AA - Elementary and Secondary Schools
Olive Group	Middle East, Pakistan, Afganistan	R-AC - Other Services (Including IT Enabled Services)
Orion	Turkiye	R-AC - Other Services (Including IT Enabled Services)
Smart Energy Solutions	United Arab Emirates	V-IA - Electric Power Other (Including Holding Companies)
Turknet	Turkiye	N-AD - Other (Including Satellite Telecommunications, Radio and Television Broadcasting, etc.)
Carbon Holdings	Egypt, Arab Republic of	G-AA- Refineries and Crackers

The key risks involved in this project are those of the Fund's investments, as well as, the Fund’s lack of prior experience with E&S requirements of DFIs, to undertake E&S due diligence in line with IFC’s policy requirements. The Fund is in the process of establishing an environmental and social management system and recently nominated an ESMS officer.

The main risks associated with sub-projects in the region that involve telecommunication, software, textile, consumer finance, oil and gas, car leasing, water related infrastructure and services, aluminum, construction, pharmaceuticals, construction related consumer durables are related to labor and working conditions, resource efficiency and pollution prevention, impacts upon biodiversity and cultural heritage as well as OHS risks, community health, safety and security risks. The above can be managed and/or mitigated by the Fund: (i) Establishing and E&S Management System (ESMS), (ii) Develop guidelines for the implementation of the ESMS,(iii) Develop a training plan to ensure effective ESMS implementation and (iv) Provide training for the Fund’s ESMS officer and staff members responsible for environmental and social risk management . In addition,I FC will review ESDD’s of the first three ESDDs as well as any Category A projects prior to the Fund’s investment to support the implementation of the ESMS.


Task Description	Anticipated Completion Date
Establish an ESMS	On or prior to Commitment
Develop guidelines for the implementation of the ESMS	On or prior to Commitment
Develop a training plan to ensure effective ESMS implementation	On or prior to Commitment
Provide training for the Fund’s ESMS officer and staff members responsible for environmental and social risk management.	Within 3 months after the Commitment

Contacts

For Inquiries About the Project, Contact

Elbrus Capital
52nd Floor
Moscow City
Naberezhnaya Tower, Block C
10 Presnenskaya Nab.
Moscow, 123317, Russia
Tel.: +7 (495) 663-7400
Fax: +7 (495) 663-7407
E-mail: info@elbcp.com

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IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring its real sector clients to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities in relation to environmental and social issues arising from IFC's clients' business activities. Since 2012, IFC's Financial Intermediary clients applying the Performance Standards are required to develop External Communications Mechanisms to receive and review inquiries or complaints from any interested party regarding the E&S risks and impacts of their operations.

For IFC projects that are active or under consideration, individual(s), or their authorized representative(s), who allege they have been or will be adversely affected by E&S risks or impacts arising from IFC's clients' business activities, may submit a complaint to IFC directly for consideration. When receiving an E&S complaint, IFC engages with complainants and works with its clients to find solutions to E&S concerns as quickly and efficiently as possible.

Complaints can be submitted to IFC online at www.ifc.org/escomplaints or by email to EScomplaints@ifc.org.

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Affected communities have unrestricted access to the Compliance Advisor Ombudsman (CAO), the independent accountability mechanism for IFC and MIGA. CAO facilitates the resolution of complaints related to IFC and MIGA projects and sub-projects, undertakes reviews of IFC’s and MIGA’s environmental and social compliance, fosters public accountability for their commitments, and enhances the environmental and social performance of IFC and MIGA.

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Complaints may relate to environmental and social harm regarding any aspect of the planning, implementation, or impact of a project or sub-project, and can be made by any individual, group, community, entity, or other party affected or likely to be affected by the environmental or social impacts of an IFC- or MIGA-financed business activity.

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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.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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