44623 - Africinvest Fund IV LLC

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Summary of Investment Information

Project Number

44623

Company Name

AFRICINVEST FUND IV LLC

Date SPI Disclosed

Oct 14, 2020

Country

Africa Region

Region

Africa

Projected Board Date

Dec 25, 2020

Environmental Category

FI-2 - Limited

Status

Pending Disbursement

Last Updated Date

Aug 9, 2021

Department

Disruptive Technologies and Funds

Industry

Funds

Previous Events

Approved : Dec 14, 2020
Signed : Dec 28, 2020

Sector

Growth Equity Fund

Project Description

The proposed project consists of an additional equity commitment of up to $15 million AfricInvest IV LLC (“AF IV” or the “Fund”), a generalist, closed-end private equity fund domiciled in Mauritius with a target size of $400 million. Fund will invest in mid-market growth capital transactions in Africa.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	35.0

Development Impact

Project Outcomes:

- Stakeholder: Access to growth capital for Fund investees: The Fund, while maintaining a generalist strategy, will provide access to much needed long-term equity capital for mid-market companies in Africa.

- Stakeholder: Increased Investee Growth: IFC expects the Fund to help in knowledge transfer and bring operational value-add to its investees.

Contribution to Market Creation

- Competitiveness: The project is expected to send a positive signal and demonstrate the sustainability of PE markets in the region

Financial additionality - IFC own account equity: IFC will provide long-term equity capital to help the Fund reach its target first closing size. Non-Financial additionality - Non-commercial risk mitigation: IFC's investment in AfricInvest IV will send a strong signal of confidence to potential investors and help reduce risk perception for domestic and international limited partners in Africa.

E&S Category Rationale / Risks and Mitigation

The Fund intends to invest in potentially medium risk sectors such as financial services, manufacturing, agribusiness, healthcare, education, logistics and distribution. The E&S risks and impacts associated with these sectors are considered limited, generally site-specific, largely reversible and can be readily addressed though mitigation measures. The overall portfolio risk is considered medium and the project has thus been categorized as FI-2 according to IFC’s Policy on Environmental and Social Sustainability. 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 Africinvest Fund IV, 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.

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.

Summary of Client Environmental and Social Management System (ESMS)

The Fund Manager is an existing IFC client, and line with IFC's requirements for financial intermediaries, the Fund Manager has an E&S management system (ESMS) and an E&S Officer. The ESMS is applicable to all funds managed by the Fund Manager. The ESMS enables the Fund Manager to identify the E&S risks and impacts associated with the activities of its portfolio companies; E&S action plans are developed to address identified gaps and the performance of the portfolio companies is monitored by the Fund Manager. The ESMS implementation process (due diligence and monitoring) is supported by external consultants as required. Given the growth in the Fund Manager's portfolio, an additional in-house E&S resource and additional E&S risk management training will be required to ensure adequate implementation of the ESMS, and management of E&S risks and impacts associated with portfolio companies. IFC will monitor the implementation of the ESMS for the new fund through the review of E&S due diligence and monitoring reports as well as site visits (as required).

Task Title & Description	Actual Due Date	Status	Comments	Completion Date
Other1 Organizational capacity	08/31/2021	Pending
Other2 Organizational capacity	12/31/2020	Completed		07/01/2020

Contacts

For Inquiries About the Project, Contact

AfricInvest Capital Partners
Hakim Khelifa
Executive Partner
+216 71 189 800
hakim.khelifa@africinvest.com
5th Floor, Barkly Wharf, Le Caudan Waterfront, Port Louis, Mauritius
www.africinvest.com

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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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