45092 - Vantage Mezzanine Fund IV

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Summary of Investment Information

Project Number

45092

Company Name

VANTAGE MEZZANINE IV PAN AFRICAN SUB-FUND PARTNERSHIP

Date SPI Disclosed

Apr 30, 2021

Country

Africa Region

Region

Africa

Projected Board Date

May 31, 2021

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Dec 22, 2023

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Jun 1, 2021
Signed : Jun 11, 2021
Invested : Aug 26, 2021

Sector

Mezzanine Fund

Project Description

The proposed investments is an IFC equity investment of up to US$25 million, not to exceed 20% of total capital committed, in the fund known as Vantage Mezzanine IV Pan African Sub-Fund Partnership, a Pan-African sub-fund, which, together with two additional distinct limited partnerships (the “Fund” or “Vantage IV”), has a target size of US$350 million (the “Project”). The Pan African Sub-fund will be managed by Vantage Mezzanine IV Proprietary Limited (“Vantage Capital” or the “Fund Manager”) and aims to boost the growth of Africa’s nascent mezzanine finance industry by providing much needed capital to African mid-sized companies, many of which are or have been negatively impacted by the COVID-19 pandemic. The Project will support high-growth, mid-market companies, some of which will have a portion of their revenues in hard currency.

Associated Advisory Engagement

None.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	25.0

Development Impact

This Project supports market creation by strengthening the private credit ecosystem and increasing funding market activity in Africa. By supporting Vantage Capital, which has shown itself able to demonstrate the continued viability of the private credit market in a difficult economic environment, IFC anticipates that its financing will continue to strengthen the competitiveness of the private credit market and will signal to other fund managers that it is viable to invest in a region suffering from a lack of investor confidence.

IFC's additionality in this Project is expected to be both financial and non-financial. It includes the following: (i) IFC will have financial additionality by providing own account equity funding that is scarce in the market; and (ii) non-financial additionality through non-commercial risk mitigation by supporting the Fund in reaching final close in a difficult fundraising environment.

E&S Category Rationale / Risks and Mitigation

This Project is classified as FI-2 in accordance with IFC's Policy on Environmental and Social Sustainability, based on the Fund's pipeline and business strategy. The Fund Manager focuses on high-growth, mid-market companies in Sub-Saharan Africa, in sectors such as information and communication technology, real estate, trade, manufacturing, healthcare, education and services. The activities in these sectors typically have limited adverse environmental and social risks and impacts that are few in number, site specific, largely reversible and can be readily addressed through mitigation measures. The Project portfolio risk is thus considered medium. For this Project, the Fund Manager will be required to screen the investments against the IFC Exclusion List, applicable national Environmental and Social laws and regulations and screen out higher risk transactions using IFC Performance Standards. The Fund will not invest in any coal-related activities, or higher risk business activities that may include: a) involuntary resettlement, b) risk of 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 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
Centum Two Rivers SEZ	Kenya	D-AA - Construction and Real Estate
SPMS	Morocco	A-AG - Diversified Edible Agricultural Crops Production
Aquasantec International Limited	Kenya	L-AC - Other Plastic and Rubber Products (Including Polypropylene Bags, Housing Components, Containers, etc.)
Promamec S.A.	Morocco	S-AC - Other Medical
Sky Realty Holding Limited	Arab Republic of Egypt	D-AA - Construction and Real Estate

The main risk relates to the Fund's environmental and social (“E&S”) capacity and systems in place to identify, assess and avoid or manage E&S risks and impacts associated with the activities of its investee companies, in line with IFC's E&S requirements.

Summary of Client Environmental and Social Management System (ESMS)

The Fund has developed an Environmental and Social Management System (ESMS), however, does not have a dedicated E&S officer to implement the system yet. The Fund Manager will be required to i) hire an E&S officer, ii) implement the ESMS to identify E&S risks associated with each sub-project, iii) require sub-projects to implement corrective actions as needed, and iv) monitor implementation of such corrective action plans. The Fund Manager will also be required to provide additional E&S risk management training to its staff to strengthen the ESMS implementation process. To complement the ESMS, the Fund Manager will be required to establish and implement an external communication procedure for receiving and addressing inquiries and concerns about its investment activities from third parties. In addition, IFC will review the first three E&S due diligence reports prior to the Fund's investment to support the implementation of the ESMS.

Contacts

For Inquiries About the Project, Contact

Vantage Capital
Johnny Jones
Partner
+27 (0) 11 530 9114
Johnny@vantagemezzanine.com
Melrose Arch, 2076, South Africa
https://www.vantagecapital.co.za

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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	06/30/2021
Establish SEMS	06/30/2021
Staff Training	12/27/2021
Develop an external communication mechanism	06/30/2021

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