34483 - Emerald Sri Lanka Fund I Limited

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Summary of Investment Information

Project Number

34483

Company Name

Emerald Sri Lanka Fund I Limited

Date SPI Disclosed

Apr 11, 2014

Country

Sri Lanka

Region

South Asia

Projected Board Date

May 13, 2014

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 14, 2022

Department

Equity Portfolio Management

Industry

Infrastructure

Previous Events

Approved : May 29, 2014
Signed : Dec 15, 2014
Invested : Apr 16, 2015

Sector

Private Equity/Venture Cap Fund - Country

Project Description

The proposed project is an investment in Emerald Sri Lanka Fund I Limited (“Fund”), a private equity fund which aims to invest in small and mid-sized businesses seeking growth or expansion capital in Sri Lanka. The Fund will take significant minority stakes in 10-12 well run companies. The Fund will add value by providing support and expertise on capital structures, financial reporting, business development, management development, corporate governance, strategy etc. to the portfolio companies.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.0

Development Impact

Development of private equity industry: The Fund is expected to be the first private equity fund dedicated to investing in Sri Lanka and will pave the way for development of the private equity asset class in the country and encourage flow of private capital into financing growth of small and mid-sized private companies.

Private Sector Development: The Fund is expected to promote sustainable growth in companies that do not have access to other sources of capital. The Fund will add value to portfolio companies through capacity building, improved corporate governance, and providing operational expertise.

Access to Finance to MSMEs: The Fund will provide capital to capital strained MSMEs.

Job Creation: Supporting high growth MSMEs in the growth phase leads to substantial job creation, at a greater rate than the national average.

Stamp of Approval: IFC will play a catalytic role in mobilizing other investors.

Demonstration effect: IFC's investment will act as a strong signal to the investor community that Sri Lanka is a viable and attractive proposition for growth capital. This will increase interests of other investors to infuse expansion capital in Sri Lanka where MSMEs have limited access.

Global Expertise: IFC will help the Fund adopt best practices and terms. IFC's presence will ensure that ESG best practices are adhered to at the fund and the investee level.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Employment: New Jobs in Fund Investees (#)	individuals		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The proposed investment strategy, and sectors of investment present potentially medium to limited adverse environmental or social risks or impacts that will be few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures and good industry practices. In rare circumstances, the portfolio may also include a very limited number of business activities with potential significant adverse environmental or social risks or impacts that could be diverse, irreversible, or unprecedented. Hence, the E&S risk of the proposed investment is medium and the project is categorized as FI-2. The applicable performance requirements will be i) the IFC- FI Exclusion List; ii) The host country E&S laws and regulations; and iii) the IFC 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, 2025.

Investee	Country Of Investment	Sector
Consolidated Business Systems Limited	Sri Lanka	F-AI - Other Food
JAT Holdings Limited	Sri Lanka	M-GA - Furniture and Related Products
Panasian Power PLC	Sri Lanka	V-BJ - Renewable Energy Holding Companies
Arimac Lanka Pvt Limited	Sri Lanka	N-BB- Content (B2C Companies)
Cleanline Linen Mgmt Pvt Ltd	Sri Lanka	U-AE- Other (Including Restaurants, Amusement Parks, etc.)
Idea Group Limited	Sri Lanka	D-AA- Construction and Real Estate

Main E&S risk and impacts of the project emanate from the sectors in which the fund will make investments which include processed agricultural products, information technology and other knowledge-based services, logistics and port-related services, consumer goods and services, healthcare services, and building materials, construction and other industries ancillary to the infrastructure sector. The key risks will include labor practices, occupational health & safety concerns, fire and life safety, waste and pollution management. At present, the Fund does not have an E&S risk management system. The Fund will be required to develop and implement an E&S risk management system benchmarked to IFC Performance Standards.

Task Title & Description	Status	Comments	Completion Date
Nominate officers	Completed	Email and signed SEMS document showing wef date of 15 December 2014	12/15/2014
Establish SEMS	Completed	email and SEMS document showing wef date of 15 December 2014	12/15/2014
Staff Training	Completed	Chalitha Dissanayake attended ESG training conducted by IFC in Hong Kong- June 2016 Senaka Kakiriwaragodage attended ESG conference organized by FMO in Hong Kong as communicated in annual AEPR	06/02/2016

Contacts

For Inquiries About the Project, Contact

NDB Zephyr Partners Limited
IFS Court, TwentyEight,
Cybercity, Ebene,
Mauritius

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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.

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.

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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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