A new social project for African entrepreneurship

The I&P Développement capital increase

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IMPACT FIRST! OUR CONTRIBUTION TO THE MILLENIUM DEVELOPMENT GOALS FOR 2015, AND BEYOND!

MDG 1 Eradicating extreme poverty and hunger thanks to:

• child nutrition distribution (Nutrizaza in Madagascar),

• food aid transport (Cat Logistics in Niger).

MDGs 4,5,6 Reducing child mortality rates, Improving maternal health,

Combating HIV/AIDS, malaria, and other diseases by supporting medicine diffusion through:

• generic drug production and distribution (CAMED in Mali, Genemark in Cameroon,

Duopharm in Senegal, Saphar in Niger),

• and by improving access to ophthalmology care (Vue & Vision in Ivory Coast, Colaser in Senegal).

MDG 7 Ensuring environmental sustainability through:

• renewable energy sources (CDS in Mauritania),

• and promoting sustainable farming (Laiterie du Berger, Biotropical, Phileol).

MDG 8 Developing a global partnership for development by supporting the transfer of local

skills and the emergence of a highly qualified youth through professional training (Trainis in Mali).

Saint Louis Finance, Senegal Trainis, Mali

> Executive summary

About us

—— I&P Développement (IPDEV) is a 10-year-old social private company dedicated to promote responsible entrepreneurs in Sub-Saharan Africa. —— IPDEV has invested EUR 11 million in 34 growing African small and medium size enterprises (SMEs) and microfinance institutions (MFIs) as a minority shareholder.—— IPDEV is part of Investisseurs & Partenaires (I&P), an impact investment family managed by Jean-Michel SEVERINO, former CEO of Agence Française de Développement and former Vice-President of the World Bank. The team is based in Paris and in 5 African countries: Senegal, Ivory Coast, Ghana, Cameroon and Madagascar. IPDEV is mainly hold by private investors; its shareholders are major international corporations, public development financial institutions, family offices and individuals.

A new social project for Africa

—— IPDEV is raising an additional EUR 20 million in equity to pursue its mission and expand its reach with a comprehensive twin strategy:• Invest directly in 15 companies with high impact/innovation content, over the next decade.• Launch and support at least 10 local investment funds in Africa to reach the smallest segment of formal African businesses.

—— IPDEV is also raising EUR 7 million in grants for a technical assistance fund, which will finance start-up costs of the establishment of local funds (feasibility studies, recruitment and training, etc.), technical assistance to SMEs in portfolio, training and community management for entrepreneurs and research and impact monitoring.

Expected impacts 2013-2023

—— Over the ten coming years, the capital increase will result in the development of 100 companies including one third of start-ups and the direct creation of nearly 3 000 sustainable jobs. It will also produce a leverage effect of x18 of the equity invested in IPDEV on the funds raised by beneficiary SMEs, ie a powerful knock-on effect towards the African industrial and economic fabric.—— Extra financial impacts are about supporting the emergence of responsible businesses in the operating countries through improving:• The corporations’ formalization and strengthening their governance,• Working conditions and health coverage, imple-menting the ILO decent jobs concept into reality,• Living conditions through the support of organi-zations directly providing essential services (finan-cial services, health, water, sanitation, etc.),• Energy efficiency and stimulating the use of alternative energies, waste management, resources use and biodiversity footprint.—— Financial returns will ensure the preservation of the capital invested and reach a 3% Return on Equity in the long run for shareholders.

David Munnich, I&PRoger Njitchoua, Cameroun Breuvages

Biotropical, Cameroon Cofipêche, Ivory Coast

2 Monitoring

Strategic, Management,

social and

environmental, …

3 Technical assistance

Organization, Training, HR,

mentoring and governance,

technical, commercial

and marketing, …

1 Finance

Minority stake,

loans, …

Who are we?

> An impact investor dedicated to African entrepreneurs

A good financial track record

> Combined with powerful social impacts

—— Investisseurs & Partenaires (I&P) promotes responsible entrepreneurship in Africa by pro-viding finance and strategic guidance to Afri-can entrepreneurs, in a long term trust-based relationship. I&P relies on a proven intervention model, “The Partnership wheel” that combines a financial investment with an active participation in the company’s governance and a close strategic support of the management as well as technical assistance missions.

—— Based on a successful track record, I&P has raised the EUR 52.4 million fund I&P Afrique Entrepreneurs (IPAE). The fund will be invested in 50 SMEs and MFIs as a minority shareholder for amounts ranging from EUR 300 000 to 1.5 million.

—— IPDEV’s track record demonstrates that inves-ting in African SMEs generates both a remar-kable impact and financial viability. IPDEV has completed 8 exits with an average gross equity IRR of 16.5% and the portfolio has preserved the value of the capital invested. Since 2002 IPDEV has in-vested in 34 companies among which 16 start-ups with measured impacts:• 1 400 jobs created and preserved• 32 000 individuals with access to financial services and 10 000 people with access to water and electricity.• 1 500 000 euros of additional taxes annually contributing to government budgets and allowing 300 more children in school every year.

• A considerable traction on value creation in the local economic fabric through suppliers and service-providers: for example, the castor oil producing company Philéol in Madagascar sources beans from 6 000 producers.

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FOCUS ON 3 SUCCESS STORIES OF THE CURRENT PORTFOLIO

LEGENI (Niger):

I&P co-founded a private laboratory specialized in geotechnical and environmental

studies in Niger, now leader and standard-setter in the country:

50 engineer jobs created, transfer of technology and building of local capacities.

LAITERIE DU BERGER (Senegal):

I&P co-founded the only dairy company in Senegal sourcing fresh local milk:

135 jobs created, supply from 800 livestock farmers from the rural North and

distribution to low-income customers in 6 000 sales-points.

GENEMARK (Cameroon):

I&P invested in a generic drugs manufacturer and distributor in Cameroon:

production capacity tripled, development of products range and financial

sustainability achieved. After eight years of operation, Genemark offers twenty

references to a lower price by 30% to 50% drug license.

What do we do?

> Reach out to the “missing middle” in Africa

A paradox

— Despite the promising opportunities generated by the resurgence of growth in Sub-Saharan Africa, a large share of the African small and medium size companies remains neglected by the financial sector.— They are very costly to reach and face overwhelming barriers in raising funds, even though they hold considerable economic and social potential.— They represent what is called the “Missing Middle” of development finance.

A twin strategy:— Direct investments each year in 1 to 2 companies and microfinance institutions with very strong social environmental impact and innovative content. — An ambitious capacity-building initiative: the launch of 10 country-specific equity investment vehicles with local management teams and lower management costs, able to reach companies with investment needs between EUR 30 000 and 300 000. IPDEV will set up, co-finance and support these local funds which will each invest in an average of 35 small businesses over a 10-year period.

— This new strategic plan maximizes impact by ensuring that IPDEV provides finance to a very large spectrum of economic players: — micro-enterprises through investment in MFIs, — small businesses through local investment vehicles,— and medium-sized social businesses through direct investments.

This comprehensive investment proposition is unique in Africa.

Our solution Our objective

Who are our supports?

> A strong shareholders’ basis

A dedicated team

> of high level professionals

IPDEV’s is currently funded and supported by a strong basis of 21 shareholders, among which:• Essilor, a major international corporation with a strong CSR approach, that will continue supporting the firm;• 13 family offices and individuals, who will continue providing support to IPDEV;

• EIB and Proparco, which will progressively divest in the coming years, as agreed when they joined IPDEV in 2006 and reflected in the corporation’s status.

—— I&P Développement (IPDEV)’s board is chai-red by Olivier Lafourcade while the corporation is managed by Jean-Michel Severino. A dedicated team of investment professionals is committed to the implementation of the new strategic project led by David Munnich, IPDEV’s Investment manager, while the rest of the team continues to manage the current IPDEV portfolio.

Olivier LAFOURCADE joined the World Bank in 1973 and held a large variety of operational and very senior managerial positions for 30 years, in Latin America and Africa. His last position at the Bank was Director for Colombia, Mexico and Venezuela. M. Lafourcade is now an international consultant specialized on economic development issues.

David MUNNICH has been an Investment Officer with I&P since 2009. He is now in charge of IPDEV’s investment operations. He graduated from HEC Business School and worked two years in Mauritania for the Agence Française de Développement (AFD) before joining I&P.

Jean-Michel SEVERINO began his career at the French Ministry of Finance and Economy before becoming an adviser of the Minister for Development in 1988 and taking the Director’s seat for the Ministry’s Development Programs in 1994. He then joined the World Bank as Director for Central Europe and then Vice President for Asia (1996-2000). He was Director of the Agence Française de Développement (AFD) from 2001 to 2010. In 2011 he joined Investisseurs & Partenaires (I&P) as CEO.

Olivier Lafourcade Jean-Michel Severino David Munnich

WHAT ARE WE LOOKING FOR?

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In order to implement its new strategic project, IPDEV is raising:

•EUR 20 million in equity

•EUR 7 million in grants for a development fund.

Investing in SMEs is profitable but IPDEV will bear the costs of reaching this “missing middle”; hence, IPDEV plans to preserve the value of the capital invested and reach a 3% Return on Equity in the long run.

A minimum commitment of 7 years is expected from new investors, a period after which anticipated exits will be organized.

WHAT IS THE AGENDA?

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www.ietp.com

I&P - 10, rue de Sèze - 75009 Paris - France - Tél. : + 33 (0) 1 58 18 57 10 - Fax : + 33 (0) 1 58 18 57 19

> BIOTROPICAL, PIONEER AND LEADER OF ORGANIC TROPICAL FRUIT IN CAMEROON/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

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BIOTROPICALproduces, processes and exports organic tropical fruit in fresh, frozen or dried form to France and other European Union countries; Biotropical is certified by Ecocert and is the leader in organic agriculture in Cameroon.

Jean-Pierre Imélé, an agronomist with a 25-year working experience in the organic sector, created Biotropical in 1999 with the objective to structure the organic value chain in Cameroon. He approached I&P in 2007 to raise the resources necessary for the industrialization of the company.

I&P’s partnershipI&P invested EUR 145 000 in 2007 to expand the plantations and increase the processing capacity. Beyond the financial investment, I&P supported Biotropical for 5 years by bringing technical assistance in financial management, strategy and marketing. I&P also granted loans to the company to mitigate cash shortages and to invest in production capacity.

Impacts• Revenue growth of 130% between 2007 and 2011 and profitability exceeding 5%

since 2010.• 100 jobs created between 2007 and 2011, 30% of which are held by women. • 80 local producers trained by Biotropical have considerably raised and stabilized

their income by selling to Biotropical. Training expenses to the producers represent EUR 45 000 in 2011.

• Organic agriculture: preservation of soils and water supply and improvement of the working conditions of small producers.

• Organization of the organic industry in Cameroon, substitution of conventional input by organic inputs.

> IPDEV’S INTERMEDIATION STRATEGY/ / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / / /

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IPDEV’s intermediation strategy will leverage I&P’s experience in financing the missing middle to reach more SMEs and generate more developmental impact. IPDEV will create national SME investment vehicles and raise local and international funds to invest in SMEs with needs in the EUR 30 000 - 300 000 range.

A successful experience in Niger with SINERGII&P has already co-founded and supported a prototype in Niger: the investment company SINERGI, created in 2006 with a shareholding of private companies and businessmen established in Niger and an equity of EUR 760 000. SINERGI has analyzed 30 investment opportunities and invested in 10 SMEs an average amount of EUR 45 000:• UNIFAM, a producer of metallic goods. • Servicing, a reprography business. • ETC, a cereal processing SME. • Compost Niger, a producer and distributor of organic fertilizer. • Sahel-lab, a mineral sample analysis laboratory. The SMEs in portfolio have experienced rapid growth in revenue and prove to be much more dynamic than the norm in Niger. SINERGI’s team is led by M. Djibo Ibrahima and has been recruited and trained by I&P. Drawing on I&P’s methodology, SINERGI gets actively involved in the governance of its investees and supports their management.

This successful experience in the difficult context of Niger shows the extent of the need for such a vehicle as well as its economic viability. IPDEV’s new strategy will learn from SINERGI: for example, the diverse shareholding structure with heavy involvement from local businessmen and companies will be replicated. IPDEV will also raise larger funds and invest more in training the teams to enable the vehicles to reach self-sufficiency more quickly.

Ongoing projects in Burkina Faso and Ivory CoastI&P is now launching 2 similar equity vehicles in Burkina Faso and Ivory Coast.The first project was initiated in Burkina Faso in 2012 thanks to a grant from the Argidius Foundation. The SME sector in Burkina Faso is extensive and faces great obstacles in raising long-term funds.I&P is raising EUR 3 million for the vehicle and planning to invest in 50 SMEs over 10 years in the country, with a vehicle launched and the first investments disbursed in the first quarter of 2014. Expected impact over a 10-year period:• 500 jobs directly created and 4000 preserved; EUR 4 million in wages distributed.• 50 SMEs invested including 15 start ups co-founded.• EUR 2 million in taxes paid to the State.• Substitution to importations and EUR 6 million of exports.• Knock-on effect on the local economic fabric with EUR 7 million of local sourcing;

indirect job creation, strengthening of the agricultural value chain.

I&P is also working on securing start-up funds for a second project in Ivory Coast, where the preliminary work has shown enormous potential.