AfricInvest II is sponsored by Tuninvest, an independent North African financial services company, with offices in Tunis, Algiers and Casablanca and is owned by its employees and the leading French capital development company Siparex. The Tuninvest team consists of 18 investment professionals some of whom have worked together since 1994, making them one of the oldest private equity teams in the region. It is also one of the very few players independent of local banks. The Tuninvest team is experienced in sourcing, analyzing, executing, value-enhancing and exiting investments. The senior team is composed by Ahmed Abdelkafi, founder and Chairman of the Board, and Ziad Oueslati, Brahim El Jai and Aziz Mebarek. Hakim Khelifa is the partner responsible for AfricInvest II. Five investment officers within the team are dedicated to Sub-Saharan Africa. IFC has known the Tuninvest principals for almost 10 years. First closing investors include IFIs (e.g., FMO, Bio, Finfund, Proparco, SIFEM) and possibly Bank of Africa. Future closings are targeting EIB, CDC, AfDB, and European, North American and Middle Eastern private sector investors. A first closing is targeted for March 2008.

IFC proposes to invest the lesser of €20million in equity (about $28.8 million) or 20% of the total committed capital in AfricInvest II Fund.

25.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	25.0

* These investment figures are indicative

The Fund Manager HQ offices are located in Tunis. Additionally, the Fund is planning to open new regional offices in Lagos, Abidjan and possibly at a later stage in East Africa. In addition, the Fund Manager has built a network of Local Investment Partners with offices in Lomě, Accra and Douala. Depending on the final size of the AfricInvest II, additional offices may be opened.

- The Fund anticipates contributing to the private sector of several sub-Saharan countries by strengthening and improving the sustainability of at least 15 to 20 companies. Based on the existing pipeline, 60% of the target companies are SMEs that need substantial hand-holding and financial resources to become competitive businesses.
- The Fund is also expected to invest in high-growth mid-size companies leading to increased employment rates at a rate higher than the local average.
- The Fund will also contribute to improve corporate governance and transparency in its portfolio companies helping them to become listed companies in the local stock exchange.
- The Fund has adopted the IFC environmental performance standards and is expected to help improve the environmental management of its portfolio companies.

Through its investment in the Fund and participation in the Advisory Board, IFC will have the following roles:

- Playing a catalytic role in supporting an emerging fund manager that has been successful in North Africa and now wants to expand its operations to the Sub-Saharan region;
- Helping to adopt best-practice corporate governance and environmental and social standards at the fund and portfolio company level;
- Providing additional regional and industry experience on the Fund’s board level, and through collaboration with IFC local offices;
- Providing access to additional financing to investees through IFC co-investments; and
- Helping the fund manager to attract North American and Middle-Eastern institutional investors to reach its targeted size.
- Developing synergies with IFC local officers in Sub-Saharan Africa allowing them to provide support and intelligence to the Fund.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. During appraisal, IFC analyzed the fund’s expected portfolio and sectors of investment and determined the Applicable Performance Requirements based on an analysis of the potential social and environmental risks associated with the expected portfolio and considering IFC’s investment. The Applicable Performance Requirements are:

- The IFC FI Exclusion List
- The applicable National Social and Environmental Laws and regulations

As an existing IFC client, the Fund Manager has implemented a Social & Environmental Management System (SEMS). Considering the project will apply IFC’s new Environmental and Social Policy framework and based on the review, the project will be required to:

- Upgrade its existing SEMS to reflect IFC''s new social and environmental polices, prior to disbursement to the satisfaction of IFC;
- Identify responsible, qualified persons to manage and implement the SEMS;
- Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.