38139 - ALCB Fund

Who We Are
Who We Are

IFC is the largest global development institution focused on the private sector in developing countries. By encouraging growth, IFC advances economic development, creates jobs and improves the lives of people.
More About Us
About IFC

Our Leadership

Development Partners
Accountability

Learn more about accountability
Annual Report

Download the Report
What We Do
What We Do

IFC advances economic development and improves the lives of people by encouraging the growth of the private sector in developing countries. We achieve this by investing in impactful projects, mobilizing other investors, and sharing expertise.
What We Do Overview
SOLUTIONS

Our products and services
OUR PRIORITIES

Climate Business

Fragile & Conflict Afflicted Situations

Gender

Mobilizing Private Capital

Sustainability
SECTORS & EXPERTISE

Agribusiness & Forestry

Creative Industries

Education

Financial Institutions

Funds

Health

Infrastructure

Manufacturing

Public-Private Partnerships

Tourism, Retail & Property

Trade & Supply Chain Finance

Venture Capital

Working Upstream
Where We Work
Where We Work

As the largest global development institution focused on the private sector, IFC operates in more than 100 countries around the globe. We apply lessons learned in one region to solve problems in another.
Overview
By Region

Africa

East Asia and Pacific

Europe

Latin America and the Caribbean

Middle East and Central Asia

South Asia
Our Impact
Our Impact

Our impact improves lives. IFC brings a clear set of advantages to the world’s most challenging markets. Including a history of innovation, a global mandate, and a determination to achieve measurable development impact.
Our Impact Overview
PRINCIPLES & MEASUREMENT

Impact Investing at IFC

Measuring and Monitoring (AIMM)

Evaluation

Sustainable Development Goals (SDGs)

Owned by 186 member countries and consistently rated AAA/Aaa. IFC aims to achieve our mission of promoting development by providing debt and equity to the private sector, through a range of benchmark and bespoke products.

For Partners

For Investors

Get in Touch

Summary of Investment Information

Project Number

38139

Company Name

AFRICAN LOCAL CURRENCY BOND FUND LIMITED

Date SPI Disclosed

Apr 25, 2016

Country

Africa Region

Region

Africa

Projected Board Date

May 26, 2016

Environmental Category

FI-2 - Limited

Status

Completed

Last Updated Date

Nov 6, 2024

Department

Regional Industry - FIG ME & Africa

Industry

Financial Markets

Previous Events

Approved : Apr 27, 2017
Signed : May 11, 2017
Invested : Sep 27, 2017

Sector

Finance Companies

Project Description

The proposed project is an investment of $40 million in the Senior Unsecured Note of African Local Currency Bond Fund (the “Fund” or “Project”), a local currency bond fund sponsored by KfW and managed by LHGP Asset Management LLP (the “Manager”) . The goal of the Fund is to improve and diversify access to long term funding in local currency and support the development of African capital markets by creating opportunities for African issuers, investors and intermediaries. ALCBF accomplishes its goals by anchoring first-time or innovative bond issuances by local entities and providing “Technical Assistance” to local issuers to off-set some of the costs of first-time issuance

Sponsor / Cost / Location

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

Development Impact

Local Capital Markets Development: The project will create awareness of domestic capital markets, build capacity of suitable issuers and enhance the fledgling eco-system of participants that are required to ensure development of the bond market in various African countries

Access to finance: The Africa Local Currency Bond Fund and similar vehicles offer an alternative source of financing for medium size firms that may not be able to access adequate funding from banks. Successful execution of The Fund will highlight mobilization of domestic capital to invest in domestic bonds as an attractive opportunity for asset managers and thereby potentially increase the number of vehicles providing local currency funding to local corporates in African countries.

Growth capital: An IFC investment in the early phase of the Fund''s life will give The Fund the scale and time needed to build a robust track record on the back of which it can mobilize other private investors subsequently.

Standard Setting: The Fund will adhere to World Bank / IFC E&S standards and IFC''s funds best practices, which will raise the bar for E&S and corporate governance practices among local institutional investors.

E&S Category Rationale / Risks and Mitigation

The project has been categorized as FI-2 in accordance with IFC’s Policy on Environmental and Social Sustainability. The project will support investments in bonds of medium-sized companies across a number of countries in Africa. The Fund’s main sector of focus is financial services – consumer lending, lending for housing, micro and SME lending. The others sectors include renewable energy (e.g. off-grid solar power to households and small enterprises and hydropower), infrastructure (e.g. road construction through securitization) and agribusiness; the exposures to these sectors are expected to be limited. The overall E&S risks and impacts associated with these transaction are considered limited and can be addressed through mitigation measures. The overall portfolio risk is thus considered medium. The identified applicable requirements for this project are the IFC Exclusion List, applicable E&S laws in the countries where the investee companies are located and the IFC Performance Standards.

The E&S risks and impacts associated with this fund relate to the ability of the fund manager, Lion's Head Global Partners, to identify and manage the E&S risks associated with the underlying bond transactions. For the financial services investments, the main concerns relate to the lending portfolios, particularly for SME lending and the labor and working conditions in the financial institutions. For the other sectors, although these investments are expected to be limited, the fund manager will need to assess sector-specific risks such as supply chain risks, working conditions, harmful child labor and forced labor in the agriculture sector; and land acquisition, occupational health and safety and community impacts for the hydro projects. It is noted that the fund will only be investing in bonds and in some circumstances may need to rely on publicly available information for its due diligence, thus the fund will have limited leverage in influencing the bond issuers on E&S risk management. Nonetheless, the fund needs to implement an E&S risk management framework in order to be able to identify and manage the main E&S risks and impacts associated with these investments. ALCB Fund has an Environmental and Social Management System (ESMS) which has only recently been developed. In order to meet IFC's requirements for this project, a few improvements need to be made to the E&S due diligence process in the ESMS. Upon investment, IFC will review the E&S assessments conducted for the first three investments. In addition, the fund manager needs to nominate a focal person to serve as the E&S Officer for the fund and ensure that adequate training is provided to the fund's team on E&S risk management.

Contacts

For Inquiries About the Project, Contact

Mr. James Doree (Director)
LHGP Asset Management LLP
154 Buckingham Palace Road
London SW1W 9TR
Telephone: +44 (0) 207 340 0412
mailto:James.Doree@lhgp.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster

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.

Task Title & Description	Anticipated Completion Date
Nominate officers	05/10/2016
Establish SEMS	06/30/2016
Staff Training	09/30/2016
Submission of ESDDs for first three projects	01/31/2017

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Development Impact

E&S Category Rationale / Risks and Mitigation

Similar Projects

Contacts

Projects

Summary of Investment Information

Project Description

Sponsor / Cost / Location

Project Sponsor and Major Shareholders of Project Company

Total Project Cost and Amount and Nature of IFC's Investment

IFC's Investment as Approved by the Board

Location of Project and Description of Site

Development Impact

Anticipated Impact Measurement & Monitoring (AIMM) Assessment

IFC's Role and Additionality

E&S Category Rationale / Risks and Mitigation

Environmental & Social Categorization Rationale / Key Risks & Potential Impacts

Environmental & Social Management System (ESMS)

Mitigation Measures / Environmental & Social Action Plan (ESAP)

Press-Release

Related Environmental Document

Similar Projects

Contacts

Information on E&S Complaints and Grievance Mechanisms

Disclaimer