46072 - Africa Conservation & Communities Tourism Platform

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Summary of Investment Information

Project Number

46072

Company Name

AFRICA CONSERVATION AND COMMUNITIES TOURISM FUND, SCSP SICAV-RAIF

Date SPI Disclosed

Jan 20, 2023

Country

Africa Region

Region

Africa

Projected Board Date

Feb 20, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jul 20, 2023

Department

Regional Industry - MAS Africa

Industry

Tourism, Retail and Property

Previous Events

Approved : Mar 30, 2023
Signed : Apr 18, 2023
Invested : Jul 17, 2023

Sector

Resort Hotel (Including Lodges)

Project Description

The Africa Conservation & Communities Tourism Fund, SCSp SICAV – RAIF (“ACCT” or the “Fund”) was established in 2021 as a structured debt vehicle providing loans to ecotourism businesses (safari operators, camps, lodges, hotels, etc.) in conservation areas in sub-Saharan Africa (the “Project”). ACCT is raising up to US$75m. The Fund is structured using a blended finance approach with three tranches of capital: a junior tranche, a senior tranche and a grant tranche. The ACCT Fund is a response to conservation threats resulting from the COVID-19 pandemic, with the specific aim of alleviating financial stress in the short to mid-term of well-managed conservation tourism businesses and increasing the conservation and community outcomes delivered by these businesses. As the impact of COVID-19 reduces, the ACCT Fund will also look at supporting operators who can catalyze significant financial flows to conservation activity in unutilized, or underutilized, ecologically important natural landscapes, to the benefit of the wildlife and communities who depend on them.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	14.0

Development Impact

The project will improve conservation management activities for protected areas and deliver socio-economic impacts including job preservation in the conservation tourism sector and its supply chain. IFC expects that the success of the Project could help boost investor confidence, potentially scaling the availability of finance for projects in the conservation tourism sector through attracting new funds and investors.

The proposed financing structure will help strengthen the capital structure of the Fund. Funding in the target countries is not as readily available as local banks have become more risk averse in the face of the pandemic shock. IFC funding will help improve the risk profile of the Fund and crowd in private capital needed to finance and execute the Fund’s business plan. IFC’s investment in the ACCT Fund alongside other investors is expected to send a strong signal of confidence to other private institutional investors seeking to participate in the Fund and will be crucial in assisting the Fund to achieve viable close and size of at least US$70 million.1 Investor risk perception for sub-Saharan Africa continues to remain high with the region’s largest economies recently emerging from a protracted period of slow growth and policy uncertainty. Under these conditions, IFC’s support of the ACCT Fund is expected to improve the risk perception of both international and local investors, providing them with the comfort needed to participate in the Fund and assisting the Fund Managers in attracting more institutional capital.

E&S Category Rationale / Risks and Mitigation

ACCT is raising up to US$ 75m in capital, to provide loans to ecotourism accommodation businesses (safari operators, lodges, camps, hotels etc.). ACCT's portfolio will predominantly be in conservation areas in sub-Saharan Africa. Key Environmental and Social (E&S) risks and impacts of the Project derive from the Fund's capacity to identify, assess, and manage E&S risks and impacts associated with prospective investee and portfolio companies. Typical E&S risks associated with these activities include labor and working conditions, occupational health and safety (including human/wildlife interaction), resource efficiency, waste management, and biodiversity conservation among others. The sub-projects to be supported under the Project are expected to entail medium E&S risks. The proposed investment is thus categorized as Category FI-2 according to IFC's Environmental and Social Sustainability Policy (2012).The applicable E&S requirements for the Project will be the IFC Exclusion List, host country laws and regulations, and the IFC Performance Standards. The Fund will not invest in any activities on IFC's Exclusion List, coal-related activities, and/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 addition, the Fund is largely in line with life and fire safety requirements and the requirements of IFC's PS2 on Labor and Working conditions.

ACCT is in the process of developing a refined ESMS as the Fund's primary instrument for identifying and managing E&S risks associated with their investment activities in accordance with Performance Standard 1. Development of the updated ESMS is supported by internal resources within TNC and an independent E&S consultant financed by BMZ. ACCT has developed exclusion criteria for their prospective investments that cover risks and impacts related to land, affiliations with certain industries and sectors, ecosystems, social and economic impacts. As such the Fund will not invest in any activities on the IFC Exclusion list, coal-related activities as well as higher risk business activities as defined above. Currently ACCT conducts a two-stage due-diligence process on all prospective investees, which includes a preliminary and full due diligence. ACCT has developed a comprehensive E&S due diligence checklist that includes a description of the proposed project, high level screening of E&S risks and impacts aligned with IFC Performance Standards, contextual assessment, and a gap analysis. ACCT has applied this checklist to existing investments made by the Fund to date, and it will be incorporated into the ESMS. ACCT's Conservation Advisor monitors investee's E&S performance against the requirements of the loan agreement via annual Investor E&S Reports. This includes conservation activities and benefits, employment, mitigation of human-wildlife conflict, and local procurement among others. The management of the Fund's E&S elements reside primarily with TNC, the Conservation Advisor to the Fund. TNC has a Director of Conservation Tourism, who holds overall responsibility for the function, as well as an Environmental and Social Officer who is responsible for assessing and monitoring E&S compliance of potential and actual investees of the Fund. ACCT also has a Conservation Committee that has two main roles. Firstly, to assess the potential positive conservation and community impact of a proposed ACCT investment. Secondly, to assess the implications of any non-compliance with conservation and community covenants of a loan agreement and determine the actions to be met by the investee company to come into compliance. The Fund provides training to workers relating to their specific job profile and scope, including E&S as required. The Fund Manager will be required to develop and implement an external communication mechanism. IFC will review the first three ESDDs (prior to the Fund's investment). The Fund will additionally be required to disclose externally its Category B projects on a yearly basis, including their names, sectors and locations.

Contacts

For Inquiries About the Project, Contact

Africa Conservation & Communities Tourism Fund, SCSp SICAV – RAIF
Mr. Maarten Weehuizen
Portfolio Manager – ACCT Fund
+447 4799 40197
mweehuizen@thirdway.earth
412 F, Route d’Esch, L – 1471, Luxembourg, Grand Duchy of Luxembourg
https://www.thirdway.earth/

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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:

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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
Enhancement of ESMS	02/28/2023
External communications mechanism	02/28/2023

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