42633 - African Rivers Fund III

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Summary of Investment Information

Project Number

42633

Company Name

AFRICAN RIVERS FUND III LP

Date SPI Disclosed

Dec 11, 2019

Country

Africa Region

Region

Africa

Projected Board Date

Jan 31, 2020

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 22, 2023

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Jul 17, 2017
Signed : Jun 26, 2020
Invested : Sep 17, 2020

Sector

Growth Equity Fund

Additional Project Attributes

Blended Finance

Project Description

African Rivers Fund III LP, a Mauritius limited partnership (“ARF III” or the “Fund”), is targeting US$75 million to construct a portfolio of small business investments diversified across Central and Eastern Africa, which collectively capture the underserved SME and FCS investment segment in those regions.

ARF III’s investment objective is to provide long-term finance to SMEs in the form of cash generating instruments such as straight debt, debt with revenue share and debt with equity. The Fund will be supported by the Blended Finance Facility of the IDA18 IFC-MIGA Private Sector Window (PSW), created by the Word Bank Group to catalyze private sector investment in IDA countries, with a focus on fragile and conflict-affected states.

Associated Advisory Engagement

IFC’s advisory engagement will focus on support for pre-investment advisory and portfolio value creation, E&S and governance.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	250.0

Development Impact

(i) access to growth capital for Fund investees as well as providing knowledge and skills through complementary advisory engagements, which is expected to close a significant private equity gap in these markets and build the capacity of the SME investees; (ii) the growth of the Fund's investee companies is expected to result in job creation and economic growth; and (iii) contribute to market creation by enabling private sector development through demonstrating the viability of investing into SMEs in countries largely underserved by PE funds.

E&S Category Rationale / Risks and Mitigation

This project has been categorized as FI-2 in accordance with IFC’s Policy on Environmental and Social Sustainability based on the pipeline of the fund. ARF III targets investments income-generative small businesses in Central and East Africa in sectors such as food services, manufacturing, healthcare, IT services and agri-business, which entail limited adverse E&S risk and impacts that are few in number, generally site-specific, largely reversible and readily addressed though mitigation measures. The overall portfolio risk is thus considered medium. For this project, the fund will be required to screen investments against the IFC Exclusion List, the national E&S laws and regulations of those countries in which investments are located, and the IFC Performance Standards. Given the sectors of focus for ARF III, the fund is not expected to support higher-risk transactions that may include: (a) involuntary resettlement; (b) potential adverse impacts on Indigenous Peoples; (c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage; or (d) significant occupational health and safety risks. In addition, investments involving coal mining, coal-related activities and upstream oil and gas activities will be excluded from the fund’s portfolio.

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
AdvanceTire	Angola	Q-AZ - Other Distributors and Wholesalers
Afrovision	Congo, Democratic Republic of	Q-AZ - Other Distributors and Wholesalers
BAJ SERVICE STATIONS	Uganda	Q-BZ - Other Retail
Bonne Cuisine	Uganda	F-AJ - Packaged Food
BRICOKIN	Congo, Democratic Republic of	Q-BZ - Other Retail
Coffeelac	Congo, Democratic Republic of	Q-AA - Trading of Agri Commodities
Congo Parking Service	Congo, Democratic Republic of	X-XZ - Other
DPXL	Congo, Democratic Republic of	X-XZ - Other
DT Bags	Uganda	Q-AZ - Other Distributors and Wholesalers
DT Logistics	Uganda	E-BD - Other Support Activities for Transportation (Grain Terminals, Cargo Terminals)
Ecopharm	Uganda	Q-AB - Pharmaceuticals and Medicine Wholesalers
Fawaz Trading	Congo, Democratic Republic of	Q-BD - Consumer Durables & Electronics Retail (Appliances and Electronics etc.)
Gecotrans	Congo, Democratic Republic of	E-BD - Other Support Activities for Transportation (Grain Terminals, Cargo Terminals)
Geek	Congo, Democratic Republic of	X-XZ - Other
Maison Galaxy	Congo, Democratic Republic of	Q-BZ - Other Retail
MCSGroup	Angola	X-XZ - Other
Medecines De Nuit	Congo, Democratic Republic of	S-AA - Hospitals and Clinics
Neil and Spector Healthcare	Uganda	Q-BB - Pharmaceuticals and Medicine Retailers
Novaa	Congo, Democratic Republic of	X-XZ - Other
NRJ	Congo, Democratic Republic of	E-BD - Other Support Activities for Transportation (Grain Terminals, Cargo Terminals)
Orange Computers	Congo, Democratic Republic of	Q-BD - Consumer Durables & Electronics Retail (Appliances and Electronics etc.)
Premier World	Uganda	U-AC - Travel Agency
Prime Concepts	Uganda	J-AG - Paper Packaging Products (Including Boxes, Cartons, etc.)
Pygma Energy	Congo, Democratic Republic of	Q-AZ - Other Distributors and Wholesalers
Quickprint	Congo, Democratic Republic of	X-XZ - Other
Ranchers Finest	Uganda	F-AJ - Packaged Food
Selton Hotel	Congo, Democratic Republic of	U-AA - City and Business Hotel
Shayna	Angola	Q-BZ - Other Retail
Simba Telecom	Uganda	Q-BD - Consumer Durables & Electronics Retail (Appliances and Electronics etc.)
Sindco	Congo, Democratic Republic of	X-XZ - Other
Sokoni Online Limited	Uganda	U-AA - City and Business Hotel
Sweets & Co1 Sarl	Congo, Democratic Republic of	Q-BZ - Other Retail
TMR	Uganda	S-AA - Hospitals and Clinics
Unicompex	Congo, Democratic Republic of	Q-AZ - Other Distributors and Wholesalers

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, XSML, is an existing client through other funds and in line with IFC’s requirements for financial intermediaries, the fund manager has an E&S risk management system and an E&S manager. The management system is applicable to all investments made across all funds managed by the fund manager. The E&S manager, as well as other members of XSML investment and portfolio management teams are involved in the implementation process of the management system. In addition, external support is provided by E&S consultants as required. XSML’s ESMS ensures that E&S risks and impacts are adequately assessed, and appropriate measures identified to address any identified gaps. However, the Fund Manager needs to reinforce the organizational structure of the team and enhance capacity to cover the new geography for ARF III and increase in the number of investees. In addition, to complement the E&S management system, XSML will be required to develop and external communication mechanism for receiving and addressing concerns raised by third parties about its investee companies.

Contacts

For Inquiries About the Project, Contact

XSML Capital Limited
Jarl Heijstee
Managing Partner
+31 85 273 6059
jarl.heijstee@xsmlcapital.com
1092 AD AmsterdamThe Netherlands
www.xsmlcapital.com

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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
Staff Training	06/30/2020
external communication mechanism	02/27/2020

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