The Fund will be managed by Pragati India Asset Management (“Investment Manager”), which was incorporated on August 10, 2011 under the laws of Mauritius as a private limited liability company with limited life. The Investment Manager will enter into an investment advisory agreement with Pragati Equity Advisors Pvt. Ltd. (“Investment Advisor” or the “Company”), a company incorporated under the Indian Companies Act, 1956.

Pragati India Fund has a target fund size of $75-100 million. IFC is proposing an equity investment of up to $20 million or 20% of the Fund’s total committed capital.

20.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

* These investment figures are indicative

The Fund is a Mauritius private limited company, and will operate primarily through one or more subsidiaries formed in the Republic of Mauritius, which will acquire, own and operate the portfolio of investments. The Investment Advisor is based in Delhi, India.

The team expects high development in the following areas: 1. Flow of private capital to LIS - Focus of the Fund's investments will be for the benefit of companies and projects in LIS 2. Support of SMEs - The target investee companies will be small to medium enterprises 3. Private sector development - The target companies will benefit from value-added practices that include increased corporate governance, environmental and social standards and transparency. 4. Accelerated growth - Providing advice and risk capital to enable faster growth in portfolio companies. 5. Job creation - Supporting high growth companies which will reach the bottom of the pyramid and create employment at a faster rate than the national average.

IFC's expected additionality: 1. Demonstration Effect - IFC's commitment will act as an endorsement to the investment thesis of investing in less developed geographies, which will be key in attracting increased private capital to these areas 2. Catalytic role - IFC's commitment would act as a stamp approval and play a catalytic role in mobilizing other sources of capital including commercial investors to Pragati Fund, contributing to a diversified fund raise 3. Unique IFC resources and experiences - IFC will help improve the fund structure and bring international best practices in corporate governance for this first time fund manager. Furthemore, through its participation in the Advisory Committee, IFC will share resources and knowledge for capacity building of the Fund. 4. Providing global expertise in the healthcare, infrastructure, manufacturing, logistics & transport sectors - IFC has a deep understanding and expertise in these target sectors. IFC will also seek to explore how Advisory Services can play a role in skills enhancement at the investee company level.

This project involves IFC investment in a private equity fund and has been classified as Category FI. The likely environmental and social (E&S) risk of this project is that the impacts of sub-projects are not always adequately identified and managed.

The Applicable Performance Requirements for the sub-projects financed by the fund includes: IFC FI Exclusion List, the applicable host country E&S laws and regulations, and the IFC Performance Standards.

As a new IFC client, the fund manager’s E&S management capacity is not fully known. IFC understands that the fund has adopted the CDC’s toolkit on ESG for Fund Managers, but the same has not come into implementation yet. As part of IFC''s investment, the fund will be required to upgrade the current E&S risk management process (EGS Toolkit) to be benchmarked to the requirements of IFC Performance Standards, including enhancing the existing environmental and social management capacity, to manage these E&S risks.

The Fund Manager will be required to: develop a Social and Environmental Management System (SEMS), prior to subscription 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 also 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.