The Sponsor is Business Partners International, established in 2004 as a joint venture between IFC and Business Partners Limited, a South African risk financier of SMEs. Based in Johannesburg, South Africa, Business Partners has made over 35,000 investments in SMEs in South Africa to the value of over $1.2 billion and has facilitated more than 500,000 employment opportunities.

The Fund has a target equity investment of $40 million, of which IFC expects to invest up to $8 million in equity.

8.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	8.0

* These investment figures are indicative

The Fund is established as a Limited Life Company incorporated under the Laws of Mauritius (Mauritius Companies Act 2001) and will make direct investments through its respective wholly owned subsidiaries incorporated in Malawi, Zambia, Zimbabwe and Namibia respectively.

The Fund will achieve developmental impact via: 1) Providing investment options for SMEs to diversify and boost economic and social development; 2) Encourage economic and private sector development in local communities, providing much needed equity capital for SMEs, and promoting job creation; 3) Building institutional capacity of local companies through technical assistance programs; 4) Implementing best-practice corporate governance and social and environmental standards at the Fund and Investee level.

Due to IFC's involvement, the Fund is expected to: 1) Supporting BPI set up multi-country regional funds that can attract commercial funding. The first BPI funds were country Funds that were DFI supported. The new Fund being set up is regional; 2) Benefit from IFC's stamp of approval. IFC's participation is critical and will allow the Fund to raise sufficient funds to reach first closing. IFC's continued support for BPI will provide continuity and send a positive signal to investors; 3) Benefit from IFC's support and active participation on the Fund's Advisory Committee, which will contribute to improved governance at the Fund and Investee level; 4) Benefit from IFC's support of an emerging Fund Manager expanding its reach into new geographies.

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, which include SMEs diversified across industry sectors and with transaction sizes between $50,000 and $1 million. E&S risks and impacts of SMEs typically financed by BP in other countries evolve around labor and working conditions, ensuring adequate occupational health and safety, and environmental issues such as effluents, waste and hazardous materials management. Based on the analysis of the potential social and environmental risks associated with the expected portfolio and considering IFC’s investment, the IFC Exclusion List and the National laws and regulations have been determined as the Applicable Performance requirements for this project. IFC also reviewed BPI’s existing Environmental and Social Management System (ESMS), and capacity to implement the same. It was found that while BP Southern Africa is a new Fund, existing BP Funds in which IFC has invested are in compliance with all E&S requirements, including the development and implementation of a ESMS, which will be utilized by BP Southern Africa. The quality of E&S due diligence undertaken and staff capacity of the existing BP Funds are also adequate, and the Funds are reporting regularly. As a category FI investment, and based on the review, the Fund will be required to (i) Provide a notification to IFC with regard to the adoption of the Environmental and Social Management System and the designation of the E&S Officer prior to commitment; (ii) Commit to implement the ESMS to ensure that its activities are in compliance with the Applicable Performance requirements; (iii) Provide E&S training to investment staff; and (vi) Submit a periodic report to IFC as per a format to be provided by IFC.