African Rivers Fund IV (FMO-62844)

Regions
  • Africa
Geographic location where the impacts of the investment may be experienced.
Financial Institutions
  • Netherlands Development Finance Company (FMO)
International, regional and national development finance institutions. Many of these banks have a public interest mission, such as poverty reduction.
Project Status
Approved
Stage of the project cycle. Stages vary by development bank and can include: pending, approval, implementation, and closed or completed.
Bank Risk Rating
B
Environmental and social categorization assessed by the development bank as a measure of the planned project’s environmental and social impacts. A higher risk rating may require more due diligence to limit or avoid harm to people and the environment. For example, "A" or "B" are risk categories where "A" represents the highest amount of risk. Results will include projects that specifically recorded a rating, all other projects are marked ‘U’ for "Undisclosed."
Voting Date
Mar 8, 2024
Date when project documentation and funding is reviewed by the Board for consideration and approval. Some development banks will state a "board date" or "decision date." When funding approval is obtained, the legal documents are accepted and signed, the implementation phase begins.
Borrower
African Rivers Fund IV
A public entity (government or state-owned) provided with funds or financial support to manage and/or implement a project.
Sectors
  • Finance
  • Industry and Trade
The service or industry focus of the investment. A project can have several sectors.
Investment Type(s)
Loan
The categories of the bank investment: loan, grant, guarantee, technical assistance, advisory services, equity and fund.
Investment Amount (USD)
$ 12.50 million
Value listed on project documents at time of disclosure. If necessary, this amount is converted to USD ($) on the date of disclosure. Please review updated project documents for more information.
Primary Source

Original disclosure @ FMO website

Updated in EWS May 7, 2024

Disclosed by Bank Oct 27, 2023

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Contact the EWS Team

Project Description
If provided by the financial institution, the Early Warning System Team writes a short summary describing the purported development objective of the project and project components. Review the complete project documentation for a detailed description.

According to the Bank’s website, XSML is raising ARF IV to build on the successful strategies of ARF and ARF III. The Fund uses a mix of mezzanine and equity investments to build a diversified portfolio of SME investments. ARF IV will target a portfolio of some 40-50 investees with average target ticket sizes between USD 2-3m. The core geographical focus of the Fund will include Angola, the Democratic Republic of the Congo, Zambia and Uganda.

An investment in ARF IV strongly aligns with FMO's strategy to reduce inequalities and achieve high impact while deepening relationships with existing, strong, and experienced partners. SME financing remains very scarce in the regions where the Fund will operate, and by investing in the Fund, FMO will help empower local entrepreneurs and prove itself a valuable partner for investing in local prosperity.

Early Warning System Project Analysis
For a project with severe or irreversible impacts to local community and natural resources, the Early Warning System Team may conduct a thorough analysis regarding its potential impacts to human and environmental rights.

FMO categorises this fund investment as B+ based on the risk profile of the pipeline investees and contextual risks in some of the countries of operation. The portfolio companies are expected to focus on site specific environmental and social risk management and are unlikely to be involved in projects that significantly impact land, biodiversity, indigenous communities, or cultural heritage. Therefore, only IFC PS 1-4 are expected to be triggered. XSML has already in place an Environmental and Social Management System (ESMS) broadly in line with FMO requirements and IFC PS, through which it integrates E&S matters throughout the investment process. The Fund Manager remains committed to improving E&S performance further and adapt the ESMS and related practices accordingly.

Investment Description
Here you can find a list of individual development financial institutions that finance the project.

ARF IV will target a portfolio of some 40-50 investees with average target ticket sizes between USD 2-3m.

Total FMO financing: USD 12.50 MLN

Funding: MASSIF

Private Actors Description
A Private Actor is a non-governmental body or entity that is the borrower or client of a development project, which can include corporations, private equity and banks. This describes the private actors and their roles in relation to the project, when private actor information is disclosed or has been further researched.

XSML manages two existing private equity funds in Central Africa in which FMO previously invested, i.e. African Rivers Fund and African Rivers Fund III. These funds provide scarcely available risk capital to small and medium sized companies that operate in frontier markets such as DRC and Uganda. Currently XSML is raising its fourth fund: African Rivers Fund IV (“the Fund”).

Private Actor 1 Private Actor 1 Role Private Actor 1 Sector Relation Private Actor 2 Private Actor 2 Role Private Actor 2 Sector
- - - - XSML Capital Parent Company -

Contact Information
This section aims to support the local communities and local CSO to get to know which stakeholders are involved in a project with their roles and responsibilities. If available, there may be a complaint office for the respective bank which operates independently to receive and determine violations in policy and practice. Independent Accountability Mechanisms receive and respond to complaints. Most Independent Accountability Mechanisms offer two functions for addressing complaints: dispute resolution and compliance review.

No contacts available at the time of disclosure.

ACCESS TO INFORMATION

As part of FMO's ex-ante disclosure (disclosure of transactions before contracting), you can send requests or questions for additional information to: disclosure@fmo.nl

ACCOUNTABILITY MECHANISM OF FMO

Communities who believe they will be negatively affected by a project funded by the Dutch Development Bank (FMO) may be able to file a complaint with the Independent Complaints Mechanism, which is the joint independent accountability mechanism of the Dutch Development Bank (FMO) and the German Investment Corporation (KfW). A complaint can be filed in writing, by email, post, or online. The complaint can be filed in English or any other language of the complainant. The Independent Complaints Mechanism is comprised of a three-member Independent Expert Panel and it can provide either problem-solving, compliance review or both, in either order. Additional information about this accountability mechanism, including a guide and template for filing a complaint, can be found at: https://www.fmo.nl/independent-complaints-mechanism

How it works

How it works