40007 - Abraaj Global Credit Fund LP

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Summary of Investment Information

Project Number

40007

Company Name

ABRAAJ GLOBAL CREDIT FUND, LP

Date SPI Disclosed

Jul 12, 2017

Country

World Region

Region

Global

Projected Board Date

Aug 15, 2017

Environmental Category

FI-1 - Significant

Status

Completed

Last Updated Date

Nov 18, 2023

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Sep 18, 2017
Signed : Oct 16, 2017
Invested : Dec 14, 2017

Sector

Mezzanine Fund

Project Description

Abraaj Credit Managers Limited (the "Manager") is seeking to raise up to US$500 million for the Abraaj Global Credit Fund ("AGCF" or the "Fund") to provide growth capital in the form of direct lending to mid-sized companies principally across consumer-driven sectors in Africa, Asia, Latin America, the Middle East and Turkey.

Sponsor / Cost / Location

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

Development Impact

(i)Access to finance: AGCF will support access to finance to high-growth mid-market companies that have traditionally suffered from limited long-term debt capital, necessary to sustain their growth. The Fund will provide capital solutions via growth credit and mezzanine debt financing, as an attractive and viable alternative to equity. (ii) Private sector development: Abraaj's active engagement in portfolio companies will help investees improve operational efficiency and achieve growth when they lack access to finance. (iii) Job creation and economic growth: The proposed investment will contribute to the World Bank Group's goals of poverty alleviation by promoting job creation. The Fund will provide an important source of financing for high-growth mid-cap companies that are expected to create new employment opportunities and historically have the largest impact on job creation.

(i) Fund validation: AGCF is creating an opportunity in the development of a new asset class across global emerging markets that provides growth credit to mid-market companies operating in regions where such companies lack access to growth capital. IFC's presence and support will lend credibility and help attract institutional investors in a similar way to how IFC pioneered the growth equity market in emerging markets two decades ago. (ii) Complimentary and collaborative investment partnership: AGCF will primarily invest using mezzanine structures, which greatly complement IFC's most-used funding structure: senior debt. With Abraaj's origination pipeline being largely proprietary, and Abraaj having a track record of offering IFC co-investment opportunities in prior funds, this creates synergies that are anticipated to result in investment partnerships in credit opportunities across priority emerging market geographies. (iii) Catalytic role and mobilization: As an existing investor of Abraaj, IFC's support for the fund is expected to have a strong signaling effect and attract additional investors which will lead the Fund to reach its target size. IFC's commitment will play a catalytic role by deploying capital into sectors and geographies that are of priority to IFC.

E&S Category Rationale / Risks and Mitigation

Abraaj Group Credit Fund, plans to make private credit investments (70-75% mezzanine, 25-30% senior debt, 0-5% preferred equity) in middle-market companies. Select target countries are: India, Indonesia, Philippines, Turkey, Argentina, Colombia, Mexico, Peru, Ivory Coast, Nigeria and Kenya. The Fund will target the following sectors: Consumer Driven sectors, Utilities, Telecom/Media, Services, Energy Infrastructure, Logistics, Education, Healthcare and Real Estate. The Fund will seek to deploy capital across its target markets and in sectors where the Group has already developed an established expertise. Due to the nature of its financing in the Credit Fund, a third of the potential investments can be of high E&S risks with significant adverse Environmental and Social (E&S) risks and impacts. However, the majority of the potential E&S risks are considered to be medium and mainly entail limited adverse E&S risks and impacts that are few in number, generally site-specific, largely reversible and readily addressed though appropriate mitigation measures. Due to the diverse nature of its potential investments (both in geography and sector) and the potential of high E&S risk projects, this project has been classified as Category FI-1 according to IFC’s Environmental and Social Review Procedure. The Fund Manager will be required to ensure compliance of the investments made with the IFC Exclusion List, applicable national laws and regulations and 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, 2022.

Investee	Country of Investment	Sector
Derindere Fleet Leasing	Turkiye	Leasing Services

As a Global Credit Fund, the main risks are associated with the Fund’s investments, which are multi-sectoral and spread over a wide geographic area. Potential environmental and social risks and impacts derive from the Fund´s capacity to identify and manage the environmental and social risks associated with investment activities. Potential risks associated with investments are principally related to the (i) environmental risks such as air emissions, waste management, hazardous materials, as well as occupational health and safety of employees; (ii) employment practices as described in PS2; (iii) implementation of internal and external grievance mechanisms; (iv) supply chain E&S risks for consumer driven sectors; (v) responsible E&S management practices as it refers to resource use and management; (vi) biodiversity conservation; (vii) community issues such as land acquisition, health, safety and security, as well as potential impacts on indigenous and other vulnerable communities, (viii) community health and safety risks in areas of socio-economic or political strife and/or crime prone areas. The Abraaj Group has formal Environmental and Social (“E&S”) policies that are consistent with the IFC Performance Standards (“PS”). Responsibility for E&S policy and management is multilayered with the Head of Environmental, Social and Governance ("ESG") responsible for the implementation of the Group’s ESG Management System and overseeing regional ESG champions. As part of the IFC investment, the Fund will: (i) Continue to implement and improve its ESG, where necessary; (ii) Ensure continued E&S capacity to review all investee companies per the applicable laws and regulations of the target country and the IFC Performance Standards; (iii) Conduct an E&S due diligence ("ESDD") to identify the applicable E&S risks of each investee company and endeavor to require corrective actions as needed to ensure that these risks are managed according to the IFC Performance Standards and applicable local national laws; (iv) Continue with the current monitoring framework (and improve, where necessary) to supervise the E&S risks of all investee companies and report to IFC; (v) IFC will review all category A projects (if any) prior to investment.

No ESAP is required.

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

Abraaj Global Credit Fund
Christopher Wilder
Managing Director
+44 203 540 1526
Christopher.wilder@abraaj.com
1 Grafton Street London, W1S 4FE, United Kingdom
www.abraaj.com

For Inquiries and Comments About IFC, Contact

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

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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