48683 - DARP SA TLG

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Summary of Investment Information

Project Number

48683

Company Name

TLG Africa Growth Impact Fund II LP

Date SPI Disclosed

Nov 30, 2023

Country

Africa Region

Region

Africa

Projected Board Date

Feb 29, 2024

Environmental Category

FI-2 - Limited

Status

Active

Last Updated Date

Oct 2, 2025

Department

Regional Industry - FIG Africa

Industry

Financial Markets

Previous Events

Approved : Apr 24, 2024
Signed : Apr 16, 2025
Invested : Sep 30, 2025

Sector

Distressed Assets SPV

Project Description

The proposed project aims to refinance viable, but financially stressed, mid-market and small and medium enterprises (MMSMEs) in sub-Saharan Africa (SSA) under IFC’s Distressed Assets Recovery Program (DARP). IFC will act as an anchor investor in an investment vehicle with a target size of US$200 million, which will support MMSMEs that have been affected by macroeconomic market dynamics and lack of flexible capital from local banks (the Project, DARP SA TLG). The transaction consists of an IFC equity investment, which is the lesser of up to US$20 million or up to 20% of the total capital committed in a USD-denominated refinancing facility (AGIF II, or the Fund). AGIF II will be managed by TLG Capital Limited (TLG), an alternative investment manager that has developed an innovative product structure to support the development of the largely unattended market in SSA.

Associated Advisory Engagement

Not applicable.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Equity	Loans to SME Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

The most significant, expected project-level outcome is to provide financially stressed, but otherwise viable, MMSMEs with flexible funding solutions to strengthen their capital structure, saving them from liquidation and/or bankruptcy and preserving jobs. Beyond the Project, IFC anticipates that the Fund will promote market competitiveness by introducing an innovative financing solution to the secondary debt market through demonstration and replication channels.

IFC’s additionality through the Project is both financial and non-financial. Financial additionality includes 1) innovative financing structure; 2) resource mobilization, given that IFC’s role as an anchor investor is expected to attract a wider range of investors. Non-financial additionality includes setting standards by supporting TLG Capital in the application of international best practices in E&S standards and risk management.

E&S Category Rationale / Risks and Mitigation

The proposed project entails an equity investment of up to US$20 million in TLG AGIF II, a Sub-Saharan Africa-focused fund that aims to refinance viable, but financially stressed, mid-market and small-and-medium enterprises. The pipeline companies of the Fund entail activities that are expected to have potential limited adverse environmental and/or social risks or impacts that are few in number, generally site-specific, largely reversible, and can be readily addressed through mitigation measures (medium risk). The Fund will not invest in any coal-related activities, upstream oil & gas, or 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. As such, the project has been categorized as FI-2 according to IFC’s Sustainability Policy. The applicable E&S requirements for the project will be the IFC Exclusion List, host country laws and regulations, and screening against the key requirements of the IFC Performance Standards. 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 capacity and systems in place to manage these risks. The typical risks of the potential investments may include labor and working conditions, occupational health and safety, and waste management, among others.

TLG Capital has developed an E&S management system (ESMS), which describes how E&S criteria are integrated into the investment cycle from screening to due diligence to monitoring to exit and the corresponding E&S activities at each stage. The scope of the ESMS covers the activities of TLG and the funds it manages through its portfolio companies. The ESMS defines the E&S governance structure, including roles and responsibilities for internal fund staff and general criteria for the use of external consultants. The Fund Manager has designated an E&S Officer, and members of the fund staff have participated in E&S training provided by external parties. As part of the project, TLG Capital will need to enhance the ESMS by: 1) establishing procedures for screening higher-risk activities, 2) developing tools and templates to support the ESMS implementation; 3) further developing E&S monitoring protocols; 4) further developing criteria for the use of E&S consultants in the E&S due diligence process; and 5) establishing an external grievance mechanism to receive, assess, and respond to inquiries from external parties. In addition, the Fund Manager will need to provide E&S risk management training to staff with responsibilities in the ESMS implementation. IFC will review the first three E&S due diligence reports before the Fund’s investment to support the implementation of the ESMS.

Title	Anticipated Completion Date
E&S risk management training	03/28/2024
Enhance E&S management system	03/28/2024

Contacts

For Inquiries About the Project, Contact

TLG Capital
Isha Doshi
Partner, CFO
+44 7961054580
isha.doshi@tlgcapital.com
Suite 1504, Hotel Rafayel, 34 Lombard Road, SW113RY
www.tlgcapital.com

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