Headquartered in Belo Horizonte and with a focus on the medium/high income residential and commercial buildings segments and most recently on the low income housing segment through its wholly owned subsidiary Emcasa, Canopus is an integrated homebuilder involved in acquisition of land, planning, development and construction of residential and commercial buildings as well as sales. The Company enjoys of more than 40 years of expertise in the real estate industry, mainly in the Southeast region of Brazil, but has been currently expanding its footprint in other underdeveloped regions such as the Brazilian North and Northeast. The Company was created in 1971 by Mr. Adgar Mattos, a reputable and well-known entrepreneur. Since 1992, CANOPUS has been controlled by the second generation of the Mattos Family, represented by Mr. Lucas Mattos and Mr. Tulio Mattos (50% stake each).

IFC will provide an equity investment in the newly created company Canopus Holding S.A. for an amount to be determined. In addition, the ALAC Fund is also considering a similar investment in Canopus Holding S.A.

25.0 million (USD)

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

* These investment figures are indicative

Housing and commercial projects will be developed in various states of Brazil, including frontier regions such as the Brazilian North and Northeast.

The stability of the Brazilian macro economy during the last seven years coupled with the Government’s agenda to prioritize the housing sector in a countercyclical effort, have boosted the demand for lower- and middle-income housing. The proposed Project will support a reputable domestic housing company to undertake its growth plan in response to increasing demand for quality and affordable entry level lower-income houses in Brazil, thereby helping to reduce the current housing deficit in the country – particularly among lower-income families. Consumers will benefit from the expanded supply of residential units, while such housing developments will contribute to urban infrastructure development and community development around them, such as roads, electricity, hospitals, recreation areas, and so forth, thus also improving living standard of the population in the surrounding area. Finally, in addition to promote significant job creation, the Project will also enhance local supply linkages through increased demand for construction and building materials in the country. Once construction is completed, the housing units will stimulate the use of local supplies of goods and services, supporting maintenance, retailing and wholesale operations. In addition, local employment will be generated during and after construction.

IFC would support a Brazilian competitive player with over 40 years of experience on its expansion program in the affordable housing segment as well as the consolidation of its footprint in other regions of the country. The Project will also benefit from IFC’s solid global expertise in the sector in general and its focus on the Environmental and Social aspects of the sector in particular, with strong emphasis on green building best practices. IFC’s participation will potentially enable the mobilization of resources through the IFC African, Latin America and Caribbean Fund, sponsored by IFC, as well as other seasoned institutional investor. Finally, IFC will make use of its widely known corporate governance expertise to support a family-owned company to become fully professionalized with the best and most currently available corporate governance standards.

The Company’s core business activities in the construction of commercial and residential real estate take place in urban and peri-urban land. Land is acquired on a willing-buyer willing-seller basis and the Company has an informal policy not to get involved in negotiations of land with informal occupants. Project design takes account of relevant health and safety requirements including L&FS, the capacity and connections with municipal systems providing services and utilities, etc. Necessary licenses, permits and approvals are secured from relevant municipal authorities prior to the start of construction, the latter involving both Company construction workforce and contractors. A well established construction process is defined, with project construction teams involving construction managers, technical staff and trades people being supported with OHS staff, etc.

This is therefore a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. Further detail on environmental and social matters is provided in the project’s Environmental and Social Review Summary (ESRS).