45023 - Convergence II

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Summary of Investment Information

Project Number

45023

Company Name

CONVERGENCE PARTNERS DIGITAL INFRASTRUCTURE FUND LP

Date SPI Disclosed

Mar 9, 2021

Country

Africa Region

Region

Africa

Projected Board Date

May 25, 2021

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 21, 2023

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : May 25, 2021
Signed : Jul 13, 2021
Invested : Jul 26, 2021

Sector

Growth Equity Fund

Project Description

The proposed project consists of an equity investment of up to US$ 25 million in Convergence Partners Digital Infrastructure Fund (“the Fund” or “CPDIF”), a digital infrastructure investment vehicle focused on sub-Saharan Africa (SSA), seeking $250 million in third party commitments and to comprise two parallel funds in South Africa and Mauritius. The fund’s strategy is to invest in companies operating in the digital technology sector and ICT infrastructure with a geographical focus on Nigeria, Ghana, Cote d’Ivoire, the Democratic Republic of Congo (DRC), Ethiopia, South Africa, Kenya, Uganda, Zambia, Tanzania, Mozambique, Botswana.

Associated Advisory Engagement

There are no expected advisory services engagements associated with this investment.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	45.0

Development Impact

The Project is expected to result in increased capacity of digital infrastructure, with a potential to improve quality of digital connectivity and services for individuals and businesses. These outcomes would be achieved by supporting the sharing of broadband and data infrastructure and adding new international connectivity and data center capacity across a number of countries, including some with substantial gaps in digital connectivity. Beyond the Project, this investment has the potential to result in increased competitiveness of the market for digital connectivity and data across the target countries, by creating competitive markets via demonstration and replication channels.

IFC's additionality in this Project is expected to be both financial and non-financial. Financial additionality entails providing patient equity to support the fundraising round of a Fund Manager specialized in the digital sector in Sub-Saharan Africa, a region with limited availability of private equity. Non-financial additionality involves non-commercial risk mitigation by providing comfort to additional investors through signaling the Fund Manager's ability to expand in the digital sector across challenging markets, including FCS countries like the DRC and Mozambique.

E&S Category Rationale / Risks and Mitigation

This project has been categorized as FI-2 in accordance IFC’s Sustainability Policy. CPDIF is a dedicated private equity fund focusing on communication infrastructure and associated activities. The potential pipeline investments entail limited environmental and social (E&S) risks and impacts that can be readily addressed through mitigation measures. The overall portfolio risk is considered medium. The investments will include digital technologies, ICT technologies and ICT infrastructure. For this project, the client will be required to screen projects against IFC Exclusion List, applicable national laws in the countries where investee companies are located, and the IFC Performance Standards. The Project will not support higher risk investments (Category A). It will also not support any investment that may include: a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on 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 support.

IFC will periodically disclose the names, locations and sectors for Category A sub-projects that have been supported by IFC investments through financial intermediaries, subject to regulatory constraints and market sensitivities. The sub-project(s) listed below reflect(s) the status of the portfolio as of July 1, 2020.

According to AIP 2023, effective of January 1, 2023, IFC must list confirmed investments under "investee Information" by Fund. Kindly approve.

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
42Markets	South Africa	O-FA - Other Non-Banking Financial Institution (NBFI)
CSquared Holdings	Africa Region	N-AG - Wholesale Broadband - Terrestrial [Project only]
Ctrack	South Africa	N-AD - Other (Including Satellite Telecommunications, Radio and Television Broadcasting, etc.)
Datacentrix	South Africa	N-AD - Other (Including Satellite Telecommunications, Radio and Television Broadcasting, etc.)
Merit Telecoms	Nigeria	N-AD - Other (Including Satellite Telecommunications, Radio and Television Broadcasting, etc.)
Yellow	Malawi	O-HA - Microfinance and Small Business - Non Commercial Banking

The main E&S risks and impacts relate to the ability of the Fund Manager to identify, assess and manage the E&S risks and impacts associated with the activities of the investee companies in line with requirements of Performance Standard 1. CPDIF has established an E&S management system to identify and assess potential E&S risks and impacts related to its lending activities. The policies and procedures are applicable to all investments made across all funds managed by the Fund Manager. As an existing IFC client having a satisfactory E&S performance, the fund manager has an Environmental and Social Management System (ESMS) in line with IFC’s requirements and an assigned E&S officer responsible for the implementation of the ESMS. External support is provided by E&S consultants where required. The fund manager will be required to continue to implement its E&S risk management system adequately and will enhance the due diligence process on land acquisition which is particularly relevant to investments in telecom towers, to ensure that the investing activities under this project are in line with the applicable requirements. To ensure the effectiveness of the policies and procedures, IFC will review the E&S assessments conducted for the first three investments (after IFC’s investment) as part of IFC’s E&S monitoring process.

Contacts

For Inquiries About the Project, Contact

Convergence Partners Africa Ltd.
Yolande Tabo
Investor Relations Principal
+2711 550 5320
yolandet@convergencepartners.com
Postnet 232, Pvt Bag X11, Craighall, 2021, South Africa
https://www.convergencepartners.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.

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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.

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Online form: available at https://www.cao-ombudsman.org/
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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	06/30/2021
Revise ESMS	07/30/2021

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