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Summary of Proposed Investment
This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only.
Reg Ind, Financial Markets, CAF/CLA
Date SPI disclosed
May 9, 2008
Projected board date
January 31, 2011
Date revised SPI disclosed
December 13, 2010
Signed: June 28, 2011
Approved: June 13, 2011
The proposed Project consists of the establishment of the first leasing company in Ethiopia. The Project will include a comprehensive investment and advisory services program in a greenfield leasing company likely to be named Access Leasing S.C. (“Access Leasing” or the “Company”). This is a second disclosure of the Project and follows the first disclosure made on May 9, 2008.
The investment will consist of:
- an equity investment of up to US$1 million in the company (the “Equity Investment”). The Equity Investment will be made in Ethiopian Birr;
- a partial credit guarantee (“PCG” or the “Guarantee”) of up to US$2 million for a period of up to five years. The Guarantee will cover credit facilities to be extended to the Company by local commercial banks in Ethiopia; and
- an advisory services program to implement leasing and small and medium enterprises (“SME”) financing best-practices.
Project sponsor and major shareholders of project company
The Project Sponsor is Access Capital S.C, established on 25 May 2007. Access Capital is an innovative company helping dynamic Ethiopian businesses to access financing for productive growth while also widening the opportunities for investors to support the growth of Ethiopian businesses.
Access Capital’s founding shareholder is Mr. Ermyas Tekil Amelga, who is also a significant shareholder and CEO of the Company.
Total project cost and amount and nature of IFC's investment
The total project cost is estimated at US$5 million. IFC’s proposed investment will consist of an equity investment of up to US$1 million in the Company and a PCG of up to US$2 million.
IFC investment as approved by Board
3 million (USD)
IFC Investment (million USD)
* These investment figures are indicative
Location of project and description of site
Access Leasing will be incorporated and headquartered in Addis Ababa, Ethiopia.
Anticipated development impact of the project
By creating a new institution able to sustain leasing on commercial terms and following best practices, the Project has the potential to generate a substantial increase in the availability of long-term credit to SMEs by removing the collateral hurdle that prevent most of them from financing the acquisition of productive assets. Specifically the project is expected to:
- address the critical shortage of term funding for SMEs;
- help develop a robust leasing sector in Ethiopia through the advisory services program;
- assist SMEs in acquiring assets to expand their existing operations, and eventually in accessing credit through banks; and
- generate employment through the resultant growth of SMEs
IFC's expected development contribution
IFC’s participation in this Project is expected to add considerable value in the form of a comprehensive investment package that includes equity capital, a PCG, an advisory services program and accumulated expertise in leasing operations. The proposed investment will support the following:
- Institution Building and Development of Leasing Sector:
Provision of specialist technical input, investment in local staff capacity building and investment in financial infrastructure.
- Honest Broker:
Provision of necessary comfort in terms of balance between the Sponsor’s interests with those of a technical partner to be identified.
SME Sector Development:
Development of the emerging SME sector in Ethiopia by increasing the availability of credit to existing and new SMEs.
- Commercialization of Leasing Industry:
Demonstration effect through the endorsement of leasing as an attractive and profitable business to investors.
Environmental and social issues - Category FI
This Project involves IFC support for leasing activities and has been classified as a category FI (Financial Intermediary) project according to IFC’s Environmental and Social Review Procedure. Considering the nature of the activities supported, Access Leasing will be required to:
Develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the FI exclusion list, and ensures that the use of leased equipment complies with the applicable national laws;
Identify qualified persons to manage and implement the procedure;
Demonstrate commitment and resources to implementing the procedure;
When leasing to business activities with potentially significant environmental and social risks, inquire and review social & environmental information available in the public domain and avoid leasing to businesses that have substantial unresolved environmental and social issues. In such cases, the Company will also need to satisfy itself that the activity is being undertaken in compliance with the applicable national laws; and
Submit a periodic report to IFC as per a format to be provided by IFC.
For inquiries about the project, contact:
Mr. Ermyas Tekil Amelga
Access Capital Services S.C.
Addis Ababa, Ethiopia
Telephone: (251) 11 5505290/91
Fax: (251) 11 5526088
For inquiries and comments about IFC, contact:
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
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