48106 - SPE PEF III

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Summary of Investment Information

Project Number

48106

Company Name

SPE PEF III

Date SPI Disclosed

Nov 21, 2023

Country

Africa Region

Region

Africa

Projected Board Date

Dec 22, 2023

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Jun 26, 2024

Department

Equity Portfolio Management

Industry

Funds

Previous Events

Approved : Dec 21, 2023
Signed : May 27, 2024
Invested : Jun 24, 2024

Sector

Growth Equity Fund

Project Description

IFC is considering an equity investment of up to US$30m alongside a co-investment envelope of up to US$20m into SPE PEF III, LP (SPE III, the Fund), a fund targeting US$350m (hard cap of US$400m), to pursue control-oriented growth stage investments in North Africa. Opportunistic investments in Sub Saharan Africa (SSA) will be capped at 25 percent of total commitments.

Associated Advisory Engagement

There are no advisory services associated with this engagement.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	50.0

Development Impact

The Fund is expected to increase access to private equity capital and value creation for companies in in North Africa, including to female-owned or led companies. SPE provides value creation support through institutionalization, operational streamlining, and management capacity building for the companies to support domestic and regional market expansion. The Fund will also invest in at least 25 percent female-owned or led companies. Beyond the project, the Fund’s success will demonstrate that investing in North Africa can generate commercial returns for investors with sufficient deal flow and exit potential. In turn, encouraging other fund managers to invest in or enter the PE market in target countries, particularly the small to mid-cap market segment.

IFC’s additionality is both financial and non-financial. IFC’s financial additionality will be critical for the Fund to reach its first close. Fundraising in the Africa region faces a number of challenges including: high risk perception, foreign exchange risk impacting commercial returns, and economic uncertainty. International investors have withdrawn from the broader African private equity market and even established regional fund managers find it challenging to raise funds without substantial DFI support. IFC will also provide support through a co-investment envelope that will enable the Fund to attract more follow-on equity for its investees. IFC’s continued support, along with other DFIs, will also provide comfort to new commercial investors who may consider investing at a later close.

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 targets control-oriented growth stage investments in North Africa and opportunistically in Sub Saharan Africa. SPE III is expected to make investments taking majority control or quasi-majority positions, in companies with solid historical performance, operating in growing and defensive sectors: manufacturing, production, and processing (FMCG, food, packaging, etc.), business services (logistics, B2B distribution, offshoring, NBFIs, etc.), human capital (healthcare and education). 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 main E&S risks and impacts of the Project derive from the E&S risks associated with the Fund's investment activities and its E&S capacity and systems in place to manage these risks. These risks typically include labor and working conditions, occupational health and safety, waste management, and community impacts, among others. The Fund will not invest in coal and coal-related activities, Category A and Higher Risk 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. The fund will also be restricted from funding medium and high risk FIs to prevent the double intermediation risk. IFC will opt out from K-12 education projects financed by the Fund. IFC’s applicable E&S requirements for this transaction will be to comply with the IFC Exclusion List, applicable host country laws and regulations and the IFC’s Performance Standards.

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
OMOA	Cote D'Ivoire	O-ME- Online payments, ecommerce payments
Tamweely Microfinance	Egypt, Arab Republic of	O-HA- Microfinance and Small Business - Non Commercial Banking

The Fund has a dedicated E&S team overlooking the E&S aspects of the Fund managed by a fully dedicated Senior ESG and Impact Manager. The Fund has developed and implemented a Sustainable Investment Policy as well as an ESMS generally in line with the IFC requirements. The ESMS establishes roles and responsibilities and features E&S appraisal process within the Fund’s investment process and expected outputs at each stage (i.e. transaction proposal, due diligence, transaction conditions and covenants, investment approval, and portfolio oversight and management). The ESMS includes an appendix with support material, including E&S categorization tools, E&S due diligence checklist/ questionnaire, E&S due diligence report template, and E&S monitoring report templates. The ESDD procedure is undertaken by the ESMS Officer. An external E&S consultant with experience of the IFC PS is hired for all ESDD on Category A and B+ projects. The ESMS stipulates that Category C projects require no further due diligence. Regarding monitoring and during the holding period, periodic site visits and monitoring calls are carried out by the Fund Manager E&S team with the assistance of the investment team or by an external consultant to assess ESAP implementation and to provide guidance on issues that arise post-closing. The Fund Manager is required to further enhance the ESMS and continue implementation. Enhancements to the ESMS should include adjusting the E&S process to each E&S risk category as well as clearly indicating the instances where the Fund Manager hires external expertise for ESDDs or monitoring. The revised ESMS should also refer to the E&S requirements including exclusions and restricted activities. To support the implementation of the ESMS, IFC will review the first three E&S due diligence reports prior to the Fund’s investment. Additionally, the fund is required to disclose Category B investments on a yearly basis, including their names, sectors, and locations.

Title	Description	Anticipated Completion Date
Other2 - Enhance ESMS	Enhance ESMS	12/15/2023

Contacts

For Inquiries About the Project, Contact

SPE Capital
Nabil Triki
Managing Partner, CEO
+21670018451
ntriki@spe-capital.com
Immeuble Lira, Avenue de la bourse, Les jardins du Lac 1053 Tunis, Tunisia
http://www.spe-capital.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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