IFC is targeting sovereign and potentially other investors as investors in the proposed Fund.

IFC would invest up to $200 million of its own capital in the Fund. [The Fund itself would have a commitment target of $1 billion.]

200.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	200.0

* These investment figures are indicative

The Fund will invest in projects in the African and Latin American regions, with an expectation that half of the investment would be allocated to Africa.

Channeling long term investments by sovereign funds into Latin America and Sub-Saharan Africa should have stabilizing effects on financial markets in these regions. Sovereign funds are long term investors with stable funding sources that are unlikely to make sudden divestment decisions about their private equity investments. The proposed Fund will seek to address volatility of financial flows by connecting well-capitalized, long term sovereign investors with sustainable and diversified investment opportunities. The Fund will have a significant impact on IDA countries, which constitute 83% of the total number of countries in Sub-Saharan Africa and 27% of those in Latin America. Increasing capital inflows to IDA countries will help improve general economic conditions in countries where it is most needed. The Fund will allow IFC actively to intermediate the new flows of capital from sovereign funds in areas with high savings rates to zones with a capital deficiency, while helping to ensure that investments are made in a sustainable way.

IFC’s involvement in the intermediation of sovereign capital will provide sovereign funds with the opportunity of investing earlier in frontier markets. This Fund proposal will allow IFC to actively intermediate the new inflow of capital from sovereign funds to help ensure that investments are made in a sustainable way. IFC’s standards would be adopted. In addition, IFC’s local knowledge, experience in structuring equity transactions in challenging environments, good track record in equity transactions, understanding of reform efforts and their consequences, sectoral expertise and presence in the these markets, will help convince sovereign investors to adjust allocations and thus increase long-term capital in emerging markets. Ability to take larger equity stakes would allow IFC to reach out to more companies and offer them more comprehensive solutions to meet their financing needs.

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. All investments will be processed and executed by the Fund in accordance with IFC''s investment principles, including IFC''s Policy on Social & Environmental Sustainability and Performance Standards as articulated in the Fund''s Management Agreement with IFC. IFC''s S&E policy requirements will extend to any investments by the Fund and in instances, should they ever arise, where the Fund retains an investment that IFC has exited.