49578 - PI Fund V (Ontario), L.P.

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Summary of Investment Information

Project Number

49578

Company Name

PI Fund V (Ontario), L.P.

Date SPI Disclosed

May 13, 2024

Country

Brazil

Region

Latin America and the Caribbean

Projected Board Date

Jun 14, 2024

Environmental Category

FI-1 - Significant

Status

Active

Last Updated Date

Oct 19, 2024

Department

Regional Industry INF LAC & EUR

Industry

other

Previous Events

Approved : Jun 25, 2024
Signed : Aug 30, 2024
Invested : Oct 17, 2024

Sector

Infrastructure Fund

Project Description

The proposed project consists of an equity investment of up to $50 million in PI Fund V (Ontario), L.P. (or any parallel fund or feeder fund, together PIF V or the Fund), controlled by Patria Investments Limited (“Patria), a leading investment firm in Latin America and the Caribbean (“LAC”). PIF V will make equity investments in a diversified portfolio of infrastructure assets across LAC, aiming to address infrastructure bottlenecks, gaps, and inefficiencies to serve the growing needs of the population and businesses while bolstering a wider use of international best practices in Environmental & Social (“E&S”) standards.

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	50.0

Development Impact

Stakeholders: Increased access to private equity capital and value creation for infrastructure projects across LAC. Patria will target investments that address infrastructure bottlenecks, gaps, and inefficiencies within the LAC region. Competitiveness: Strengthening the competitiveness of the infrastructure equity market in LAC, through supporting the expansion of private equity financing. IFC's support to Patria will demonstrate the ability for infrastructure equity funds to scale up and demonstrate sustained commercial viability, attracting greater institutional investors into infrastructure equity in LAC.

Financial Own account equity: Patria recognizes IFC's role as a reference investor, catalyzing investments from a new investor base. In recent years, macro-uncertainty and high-risk perception has led to many investors leaving the LAC market, making fundraising for regional mandate funds more challenging. Attracting new institutional investors is required for Patria to reach the target size of Fund V. Resource mobilization: IFC will assist Patria in mobilizing capital from institutional investors and other Development Finance Institutions by providing Patria insight into institutional investors' requirements and helping strengthen the Fund's ESG practices. Non-Financial Knowledge, capacity building: Patria values IFC as a strategic partner and will seek IFC's feedback on sensitive and critical issues. IFC may also introduce experts, key stakeholders, IFC Industry Specialists, etc., and/or provide Advisory/Upstream services for initiatives that require regulatory considerations. Standard setting: IFC will identify gaps in the Fund's E&S standards, support the implementation plan, and work with Patria to strengthen and integrate its climate/Paris Alignment strategy.

E&S Category Rationale / Risks and Mitigation

The Project consists of a $50 million equity investment in PIF V, a vehicle sponsored by Patria and focused on long-term equity holdings in medium and large infrastructure projects in LAC. Most transactions are expected to be of medium to high E&S risks. It is expected that the Fund portfolio will include Category A sub-projects, therefore, the Project has been categorized as FI-1, according to the IFC's Sustainability Policy.

IFC will periodically disclose the names, locations, and sectors for Category A and/or other qualifying sub-projects that have been supported by this IFC investment through financial intermediaries, subject to regulatory constraints and market sensitivities. Any qualifying sub-project(s) will be disclosed during the annual reporting cycle established with the client.

The Fund's pipeline includes both brownfield and greenfield sub-projects in diversified infra sub-sectors such as renewables power generation, toll roads, waste management, data center, logistics and water and sanitation. Such infrastructure sub-projects may involve impacts on biodiversity, indigenous peoples, vulnerable communities, involuntary land acquisition and/or resettlement, community and occupational health and safety among others. The Project will not support coal related activities. As part of the Project, Patria will be required to screen and assess all sub-projects against the IFC Exclusion List, national E&S laws and IFC's Performance Standards.

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.

IFC will periodically disclose the names, locations, and sectors for Category A and/or other qualifying sub-projects that have been supported by this IFC investment through financial intermediaries, subject to regulatory constraints and market sensitivities. Any qualifying sub-project(s) will be disclosed during the annual reporting cycle established with the client.

Patria has enhanced and implemented a corporate Environmental and Social Management System (“ESMS”). The process has been led by a newly hired Senior ESG as Managing Director, who led the structuring of the ESG department consisting of four seasoned professionals and two analysts. In addition, Patria retains qualified external consultants to conduct due diligence and monitoring, especially in pipeline investments in sectors outside the E&S team expertise and high-risk projects. The ESMS entails that main findings of ESG assessments and related E&S action plans, when applicable, are included in early internal project discussions as well as in the information package received by the investment committee members to support their deliberations. Action plans and monitoring provisions are included in legal documentation. Patria remains committed to continue investing in E&S risk management in line with the IFC Performance Standards.

As part of the Project, sub-projects‘ action plans implementation will be monitored on a quarterly basis, either by a Fund’s E&S staff or external consultants, depending on sector specificities. In the case of secondary market investments, in which Patria may have limited access to sub-projects' information, Patria will be required to establish minimum conditions for assessments, including verifying publicly available information obtained from specialized market data providers and applying special filters such as excluded activities consistent with the key objectives of the Performance Standards. Secondary market transactions will be limited to 20% of the Fund portfolio and will not include higher E&S risk transactions and category A sub-projects.

For this investment, ESMS enhancements, will include the design of a categorization procedure in line with IFC’s E&S practices. In addition to the ESMS enhancement, Patria will be required to: (i) submit the first three ESDDs and all Category A projects conducted to IFC review prior to investment; (ii) provide internal training on a continuous basis; and (iii) submit to IFC periodic report. Finally, the Fund will also establish an E&S monitoring committee to oversee the ESMS implementation.

Title	Anticipated Completion Date
Upgrade Applicable Requirements	06/28/2024
Staff Training	11/29/2024

Contacts

For Inquiries About the Project, Contact

Patria Investments
Infrastructure IR Team
Infrastructure IR Team
+ 55 11 3039 9000
team.irinfra@patria.com
Av. Cidade Jardim, 803, 9o andar 01453 000, São Paulo, Brasil
www.patria.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.

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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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