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 dedicated to achieving sustainable economic development in the national interest through responsible private sector initiative. African Capital Alliance has since grown to over forty 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 $500 million and it is proposed that IFC invest up to $40 million

30.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	30.0

* 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. The Fund will be headquartered in Lagos.

The Fund is expected to deliver strong development impact by:

- Encouraging and diversifying economic development in general, and private sector development in particular, by investing in high-growth companies which is expected to lead to above-average rates of job creation;
- Providing much needed growth and expansion capital and value-enhancing advice to companies located in IDA countries throughout West Africa;
- Improving companies’ sustainable development by helping to implement best practice corporate governance and environmental and social standards;
- Development of the regional oil and gas sector coupled with strengthening indigenous firms in the sector; and
- Facilitating regional integration by helping companies expand their operations in neighboring countries.

Provide environmental and social (“E&S”) guidelines: IFC will provide guidance to CAPE III to strengthen its social and environmental risk management as it is expected to make investments in the oil and gas sector, which will be a relatively new sector for the Manager.

- Catalyst: IFC’s involvement will assist the Fund to achieve a first closing and attract additional capital.
- Structure fund and terms: IFC is taking an active role to bring the Fund’s terms to international best practices.
- Regional Expansion: IFC brings the regional expertise and presence needed to assist the Manager in their expansion outside Nigeria (up to 25% of the fund can be invested outside Nigeria).

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, and the IFC Performance Standards.

IFC also reviewed the fund’s existing Social & Environmental Management System (SEMS) and capacity to implement the same. Based on the Applicable Performance Requirements and the SEMS and capacity review, the Fund will be required to:

- Upgrade its existing SEMS, prior to commitment 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

Once in portfolio IFC will review the implementation and performance of the Fund’s SEMS for the first few projects, including any Category A projects, prior to the Fund’s investment, to ensure that the SEMS is robust.