African Capital Alliance was founded in 1997 by six partners to promote private sector investments in Africa through the mobilization of capital and know-how to take advantage of attractive investment opportunities. Two of the founding partners (Tom Barry and Okechukwu Enelamah) had previously worked together in private equity, whilst four of the founding partners (Richard Kramer, Mohammed Hayatu-Deen, Chief Ernest Shonekan and Pascal Dozie) had worked together in the Nigerian Economic Summit Group, a Nigerian economic think-tank that is dedicated to achieving sustainable economic development in the national interest through responsible private sector initiative. African Capital Alliance has since grown to eight partners and a team of over twenty professionals operating out of Lagos, Nigeria. African Capital Alliance launched the first private equity fund in West Africa through Capital Alliance Private Equity (“CAPE I”), a $35 million fund launched in 1998 in which IFC is an investor.

The target size for the Fund is $100 million. IFC would be investing up to $10 million in the Fund.

10.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	10.0

* These investment figures are indicative

The Fund will invest in West Africa, principally in Nigeria. Up to 25% of total commitments may be invested outside of Nigeria.

Equity finance for medium-sized enterprises in Nigeria is generally restricted to internally generated cash flow and family-and-friends. This lack of equity financing results in companies being under-capitalized and therefore unable to secure debt financing in order to leverage growth opportunities. Also, bank loans, when available, are very short term. The Fund will make both debt and equity financing available to investee companies. By partnering with South African companies expanding into the Region African Capital Alliance can also provide many South African companies with the local knowledge required to be successful in a difficult operating environment, so promoting further regional integration in sub-Saharan Africa. Also, by working with the local management teams, African Capital Alliance can help to promote the adoption of international standards of management, corporate governance and environmental and social policies, and develop the entrepreneurship culture in Nigeria. IFC’s participation in CAPE II will support one of the only locally-owned and run investment companies in Africa (outside South Africa) and send a positive signal to the business community. Further to this, IFC’s participation in the Fund will ensure that the Fund and investee companies benefit from the best industry practices, environmental policies, and corporate governance. IFC is expected to have a representative on the Investment Committee and Advisory Board.

This is an FI type 2 project according to IFC’s environment and social review procedure. African Capital Alliance developed a satisfactory environmental and social management system under the first fund. The Investment Advisor will need to demonstrate that the EMS is robust enough to address the environmental and social impacts arising from investments under the new fund.
Location of environmental documents in locally affected community