The fund will be managed by Sphinx Capital Corp, a BVI company owned 80% by Citadel Capital, and 20% by Ms. Marianne Ghali. Ms. Ghali is the managing director for Sphinx Capital and has extensive experience in managing private equity funds for institutional investors in Egypt with an impressive performance. During her tenure, Ms. Ghali was successful in implementing several turnarounds. The fund sponsor is Citadel Capital, one of the leading private equity fund managers in Egypt with a successful track record. Citadel capital was founded in 2003 by Dr. Ahmed Heikal and Mr. Hisham El-Khazindar. Citadel Capital is a leading private equity investing company focusing on investments in selected economies and capital markets in the Arab world using buyouts and turnarounds structures.

The Fund is targeting a first closing in July 2008 with committed capital of $75 million. The proposal for IFC is to make an equity commitment of up to $20 million not to exceed 20% of total commitments in the Fund.

17.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	17.0

* These investment figures are indicative

The fund will be established in a tax efficient jurisdiction in Europe. The Fund Manager (General Partner) is registered and incorporated in the BVI. The GP shall retain Sphinx Private Equity Management a company established in Egypt, as Advisor. The management team will be based in Cairo, Egypt.

- Private sector development: The fund will provide value addition in the form of managerial and strategic support to improve portfolio companies’ competitiveness. - Implementation of best practices for corporate governance: The fund will adopt best practices in corporate governance, thus improving and transferring knowledge and skills to its investee companies. - Economic development: The fund will provide restructuring to investee companies, putting distressed assets back into operations and increasing employment. - Support for Small and Medium Enterprises (SMEs): The fund is expected to invest in distressed SMEs in Egypt, thus tapping and developing a new market.

- Catalytic Effect: The fund will capitalize on IFC’s name to attract both local and foreign investors. IFC’s name will add credibility to a new manager in a new assets class, thus giving comfort to investors. - Knowledge transfer: IFC will bring knowledge and experience in investing in distressed assets, which is a significant value addition to the fund. - Fund structuring role: IFC will work closely with the manager on structuring the fund in accordance with IFC and international best practices given IFC’s extensive expertise in this area. - Governance of the fund: IFC will be able to share its knowledge and expertise in corporate governance through participation on the Fund’s governance structure. - Environmental & social: IFC will contribute to the sustainability of economic development by incorporating environmental and social standards.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the Fund’s expected portfolio and sectors of investment and determine the Applicable Requirements if any, that would include a combination of:

- The IFC FI Exclusion List and/or,
- The applicable National Social and Environmental Laws and Regulations and/or,
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the Fund to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required.

The Fund Manager will be required to:

- Develop SEMS, 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 Requirements,
- Take action to remedy any gaps in SEMS implementation on an ongoing basis,
- Submit a periodic report to IFC according to a format to be provided by IFC.