41705 - VEROD CAPITAL GROWTH FUND III LP

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Summary of Investment Information

Project Number

41705

Company Name

VEROD CAPITAL GROWTH FUND III LP

Date SPI Disclosed

Oct 10, 2018

Country

Western Africa Region

Region

Africa

Projected Board Date

Jan 3, 2019

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 21, 2023

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Jan 3, 2019
Signed : Mar 29, 2019
Invested : Aug 26, 2019

Sector

Growth Equity Fund

Project Description

The proposed project is for an equity investment of up to USD$15 million in Verod Capital Growth Fund III L.P. (the “Fund”), a 10-year closed-end generalist private equity fund targeting mid-market companies in Nigeria, Ghana, and opportunistically in Gambia, Liberia and Sierra Leone. The Fund is seeking to raise USD$150 million of total committed capital.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	15.0

Development Impact

IFC would (i) play a key catalytic role, especially at the First Close (ii) The Fund will benefit from implementation of the Social and Environmental Management System and promoting the adoption of IFC's E&S standards across the investee companies especially in the FCS countries like Gambia, Sierra Leone and Liberia which lack fund managers to drive ESG improvements; (iii) IFC will provide additional financing to investee companies through debt/equity co-investments; (iv) improved governance through IFC's continued active intervention on the Advisory Committee.

E&S Category Rationale / Risks and Mitigation

Verod is a West African private equity fund focused on mid-market growth capital and buyout investments in consumer demand driven sectors. The Fund’s pipeline includes the following sectors: consumer goods, light industrials, agribusiness, financial services, business services and education companies. The potential E&S risks and impacts associated with these sectors are considered mostly limited, site-specific and reversible; the overall portfolio risk is thus considered medium. The project has been categorized as FI-2 according to IFC’s Policy on Environmental and Social Sustainability. The applicable requirements are the IFC Exclusion List, the National E&S Laws in the countries where portfolio companies are located 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, 2024.

Investee	Country Of Investment	Sector
DTRT	Ghana	K-CB - Garment and Apparel (With Primary Textile Operations, Excluding Footwear)
Medplus	Nigeria	S-AC - Other Medical
Pan African Towers	Nigeria	M-BB - Computer & Electronic Products(Computers & Peripherals, Communications Equip., Elec. Watches & Similar Elec. Products. Integrated Circuits & the application of Miniturization Technologies characterize this sector.)
Tangerine Financial	Nigeria	O-JC - Composite Insurance (Life and Non-life)
iSON Xperience	United Arab Emirates	Y-YY - Non-Sector Specific Advisory Services

The main E&S risks and impacts of this project relate to the ability of the Fund Manager to conduct adequate E&S due diligence and monitoring to identify and manage the E&S risks associated with the activities of the portfolio companies in line with IFC’s policy requirements. The Fund Manager has an Environmental and Social Management System (ESMS) which is applicable to Funds I and II and will be updated and applied to Fund III. The Fund Manager has an ESG Officer with oversight responsibility for E&S risk management and adequate E&S due diligence and monitoring assessments are conducted for portfolio companies. The Fund Manager is required to update its ESMS with IFC Exclusion List and to develop and implement an external communication mechanism.

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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.

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	11/30/2018
Upgrade Applicable Requirements	11/30/2018
Staff Training	11/30/2018
External Communication Mechanism	11/30/2018

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