32694 - NEW HOPE AGRICULTURE AND FOOD FUND II LP

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Summary of Investment Information

Project Number

32694

Company Name

NEW HOPE AGRICULTURE AND FOOD FUND II LP

Date SPI Disclosed

Apr 22, 2013

Country

China

Region

East Asia and the Pacific

Projected Board Date

May 28, 2013

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Feb 21, 2024

Department

CM4P4 - Regional Industry - MAS Asia & Pac/MAS Portfolio - E Asia & Pacific

Industry

Funds

Previous Events

Approved : May 28, 2013
Signed : May 31, 2013
Invested : Nov 29, 2013

Sector

Growth Equity Fund

Project Description

New Hope Agriculture and Food Fund II, L.P. (“NHF II” or the “Fund”) is a China focused private equity fund. The Fund will make equity investments in private companies within the agriculture and food sector in China.

Sponsor / Cost / Location

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

Development Impact

(i) Rural reach: By helping grow investee companies within the agricultural and food industry, the Fund will support companies in rural areas, where most of the investee companies will be located - contributing to inclusive growth. (ii) Increased food safety: Help improve operational efficiencies across the agribusinesses supply chains through investments in various parts of the chain, which increases food safety standards. (iii) Corporate Governance: Having a professional fund investing in unlisted companies will contribute to improved corporate governance standards and transparency of investee companies. (iv) Increased food supply: Increased investments in the agricultural sector will allow to increase efficiency and improve the agribusiness supply chain hence increase the food supply.

(i) Global Experience: IFC is sharing its global agriculture and food sector experience with the fund manager, which will help in generating investment ideas and knowledge sharing on best practices. (ii) Improve E&S Standards: Through participation in the Fund, IFC will be well-positioned to influence the adoption of good international industry practices for E&S, which is important for the Chinese agribusiness industry. (iii) Co-Investment: IFC can provide both debt and equity financing to the Fund's investee companies, which allows the Fund to increase its attractiveness to its investee companies.

E&S Category Rationale / Risks and Mitigation

The Fund’s proposed pipeline consists of investments in the China agribusiness sector. The single existing investment in the Fund's portfolio is a high environmental and social risk project. The inherent sector risks and some investment prospects indicate similar potential (although the Fund Manager has committed to screen out high E&S risk prospects going forward). The project has been classified as Category FI-1.

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
Ankon	China	S-AC - Other Health Services

As a private equity fund, the main risks of this project are associated with the impacts of the Fund’s investments in the Chinese agribusiness sector. The Fund's single existing investment is a fishing company operating in the Eastern Pacific Ocean and Western and Central Pacific Ocean. There is no foreseeable prospect of this company being able to meet the Sustainable Management of Living Natural Resources requirements of Performance Standard 6. The investment is however atypical for the Fund's current investment strategy, for which the key focus areas are biotech, agricultural equipment, distribution and cold chain. Such investments would typically be low to medium E&S risk although higher risk sub-sectors (e.g. fertilizer and pesticide production) remain in the Fund's broader investment universe. The Fund has no clearly defined E&S management system (ESMS) in place, although some control steps (e.g. legal compliance checking) have been built into the investment management procedures. The Fund has indicated its eagerness to upgrade its existing practices in order to meet IFC's ESMS expectations and to adopt the IFC Performance Standards as a benchmark for such.

As part of the IFC investment, the Fund will: (i) before IFC commitment, develop an ESMS and related capacity to review all sub-projects per Chinese E&S regulatory requirements, the Performance Standards and World Bank Group EHS guidelines; (ii) conduct an E&S due diligence (ESDD), with the help of qualified professionals, to identify the applicable E&S risks of each sub-project and require corrective actions as needed to ensure that these risks are managed according to the Performance Standards and applicable laws; (iii) implement a monitoring framework to supervise the E&S risks of all sub-projects and report to IFC. Additional support for SEMS implementation will come through IFC review of the first three ESDDs and any additional ones as needed as well as that of all Category A sub-projects (if any) prior to the Fund’s investment decision.

IFC will not take exposure to the existing (fishing company) investment but will require the Fund to encourage the company to adopt internationally recognized good fishing practices.

IFC supports its clients in addressing environmental and social issues arising from their business activities by requiring them to set up and administer appropriate grievance mechanisms and/or procedures to address complaints from Affected Communities.

In addition, Affected Communities have unrestricted access to the Compliance Advisor/Ombudsman (CAO), the independent accountability mechanism for IFC. The CAO is mandated to address complaints from people affected by IFC-supported business activities in a manner that is fair, objective , and constructive, with the goal of improving environmental and social project outcomes and fostering greater public accountability of IFC.

Independent of IFC management and reporting directly to the World Bank Group President, the CAO works to resolve complaints using a flexible, problem-solving approach through its dispute resolution arm and oversees project-level audits of IFC’s environmental and social performance through its compliance arm.

Complaints may relate to any aspect of IFC-supported business activities that is within the mandate of the CAO. They 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-financed business activity. Complaints can be submitted to the CAO in writing to the address below:

Compliance Advisor/Ombudsman
International Finance Corporation
2121 Pennsylvania Avenue NW
Room F11K-232
Washington, DC 20433 USA
Tel: 1 202 458 1973
Fax: 1 202 522 7400
E-mail: cao@worldbankgroup.org

The CAO receives and addresses complaints in accordance with the criteria set out in its Operational Guidelines which are available at: www.cao-ombudsman.org

Contacts

For Inquiries About the Project, Contact

Mr. Alex Zhang, Partner
Hosen Capital
Suit 2508, Twin Towers (West)
Jianguomenwai Avenue,
Beijing 100022, China

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Communications
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384

Local Access of Project Documentation

Hosen Capital
Suit 2508, Twin Towers (West)
Jianguomenwai Avenue,
Beijing 100022, China

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.

IFC complaint response is separate from and complementary to IFC’s clients’ project level grievance mechanisms and IFC’s Independent Accountability Mechanism (CAO). Lodging a complaint directly with IFC does not, at any time, restrict access to CAO.

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.

Independent of IFC and MIGA management and reporting directly to the IFC and MIGA Boards of Executive Directors, CAO helps resolve issues raised about the environmental and social impacts of projects through a neutral, collaborative, problem-solving approach via its Dispute Resolution function. It also reviews IFC’s and MIGA’s compliance with environmental and social policies, assesses related harm, and recommends remedial actions through its Compliance function. Additionally, CAO provides advice to IFC, MIGA, and their Boards to enhance environmental and social sustainability performance and minimize the risk of harm.

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.

Complaints can be submitted by any of the following methods:

Online form: available at https://www.cao-ombudsman.org/
Mail/Hand Delivery to: 2121 Pennsylvania Avenue, NW, Washington, DC 20433, USA
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.

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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