The Fund sponsor is SEAF, a global investment management firm based in Washington, DC that provides risk capital to SMEs in emerging markets, and has been active in Eastern Europe, Latin America and Asia since 1989.

IFC’s proposed investment will be an equity commitment of 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

SEAF Caucasus Growth Fund will be incorporated in an acceptable jurisdiction, in Delaware USA or Cayman Islands based on investor preferences. The investment team is based in Tbilisi, Georgia and investments will be made in the Caucasus region, primarily in Georgia, Armenia, and Azerbaijan.

This project is in line with IFC’s overall strategy for investments in the Caucasus region. The expected development impact of the project includes: - Support of SMEs: All target portfolio companies in the fund will be SMEs. - IDA Country Focus: The three target countries of Georgia, Azerbaijan and Armenia, are IDA-blend countries. - Economic Development: Provision of long-term capital to sectors traditionally overlooked by the formal banking sector will allow companies to grow which can lead to increased output and increased employment. - Private Sector Development: Manager employs a hands-on, value-added strategy with portfolio companies, providing professional management and operations support and expertise leading to better competitiveness and sustainability in SMEs. - Support a nascent private equity industry in the Caucasus.

- Fundraising and Countercyclical Role: IFC's participation will be catalytic in mobilizing other investors. At a time when financing for SMEs in CME and CEU are at historic lows, SEAF Caucasus is a timely intervention to provide risk capital to SME's and a positive market signal. - E&S Standards and Governance Oversight: SEAF Caucasus will implement IFC's E&S policy standards. - Support for SMEs: SMEs represent the back bone of the Georgian and Armenian economies and an important source of diversification in Azerbaijan. Employment prospects for socially vulnerable parts of the population come mainly from SMEs, which suffer from a chronic shortage of capital. Currently, there is no equity fund targeted at SMEs in the Caucasus, hence IFC's investment will help fill an important market gap. - Supply growth capital and professional management to investee companies of the Fund

The project involves an IFC investment in a Private Equity Fund that will invest in small and medium-sized enterprises (SMEs) and has been classified as a Category FI project. The proposed portfolio involves investments in sectors with potential E&S impacts such as gypsum mining, slaughterhouse and meat-packing, and dairy farm in Georgia, Armenia, and Azerbaijan. The main E&S risk of this project is that the impacts of sub-projects are not adequately identified and managed. Sub-projects financed by the fund will need to comply with IFC FI Exclusion List, the applicable host country E&S laws and regulations, and the IFC Performance Standards (the Applicable Performance Requirements).
SEAF is an existing IFC client, with several active funds in various regions, and has developed a Social and Environmental Management System (SEMS). During appraisal, IFC will assess in detail the potential E&S risks associated with the fund''s expected portfolio and review the existing SEMS adequacy to manage these E&S risks.The fund manager will be required to maintain or upgrade its SEMS, prior to disbursement to the satisfaction of IFC and commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Performance Requirements; identify responsible, qualified persons to manage and implement the SEMS; and submit a periodic report to IFC. IFC will review the implementation and performance of the fund''s SEMS for the first few projects and all Category A projects, if any, prior to the fund''s investment, to ensure the fund''s SEMS is adequate to assess and manage E&S risks.