Company name
DIC Latin American Fund IV, L.P.
Project number
13976-01
FI-2 operations are those where the risk potential is considered medium: the FI’s current or future portfolio consists of or is expected to consist of, business activities that have potential limited adverse environmental or social risks or impacts that are few in number, generally site-specific, largely reversible, and readily addressed through mitigation measures; or includes a very limited number of business activities with potential adverse environmental or social risks or impacts that are diverse, irreversible, or unprecedented.
E&S category
FI-2
Country
Regional
Sector
Financial Institutions
Status
In implementation
Disclosed date
06/10/2022
Projected date at which a project will be put forward for the Board of Executive Directors’ approval.
Projected board date
09/20/2022
Approval date
09/20/2022
Signed date
12/20/2022
Sponsoring entity
Darby International Capital
Investment Operations Department Contact
Portfolio Management Division
Investment type
Syndicated amount
USD $ 250,000,000
Financing amount
USD $ 50,000,000
Currency
USD
Project scope and objective
The Project objective is to increase the access to Climate Finance solutions to mid-market companies in Latin America and the Caribbean ("LAC") through the provision of tailored long-term growth financing solutions for climate investments to mitigate and adapt to Climate Change impacts across the region.
The Project consists of an IDB Invest investment of up to US$50 million in the DIC Latin American Fund IV, L.P. (“LAC Green Debt Fund” or the “Fund”), the first private credit climate finance fund in LAC.
The Fund will be managed by Darby International Capital (“Darby” or the “Manager”), an independent investing firm, founded in 2020 as a result of the team spinning-off from Franking Templeton’s private debt arm, focused on private credit solutions for mid-market companies across LAC. Darby’s management team is led by Richard H. Frank Jr. and Ignacio Aicardi, both seasoned investors and former heads of Franklin Templeton private credit strategy in LAC.
With a target size of US$450 million, the Fund’s investment strategy is built around providing tailored credit solutions to around 10-12 mid-market companies (with EBITDAs of US$5 million-US$20 million), consisting mainly in senior secured loans with equity kickers (i.e., warrants, income participation, among others). The Fund will be focused on financially sound companies with natural currency hedges, proven management track records, moderate operating and financial risk profiles, and strong competitive positions within their respective sectors, but lacking adequate financing for its business model and expansion plans. The Fund will invest at least 30% of the portfolio in climate investments, with an aspirational target of 50%. The Fund will have a five-year investment period and a total life of 10 years, with the possibility of two one-year extensions.
The Fund can play a key role in developing tailored Climate Finance solutions for mid-market companies across LAC’s private credit market to support sustainable economic growth while mobilizing local and international investors’ capital towards the advancement of the Climate Finance agenda in the region.
For inquiries, comments and information requests about the project
Request informationLearn more about how we provide private-sector solutions in the region .
Contact information
For inquiries, comments and information requests about the project
Request informationAlternatively, you may also use the following contact information :
Client Contact
iaicardi@darbyinternational.com
PHONE NUMBER
202-215-7285
POST OFFICE ADDRESS
IDB Invest Contact
requestinformation@idbinvest.org
PHONE
+1(202)-566-4566
ADDRESS
1350 New York Ave NW, Washington, DC 20005
COUNTRY OFFICES
IDB Invest Country OfficesIndividuals or communities can submit complaints and concerns related to environmental, social, or corporate governance issues to the Management Grievance Mechanism by e-mailing mgm@iadb.org or by calling +1 202 312 4040.
As a last resort, affected communities have access to the IDB Invest Independent Consultation and Investigation Mechanism by writing to mecanismo@iadb.org or MICI@iadb.org or calling +1(202) 623-3952.
IDB Invest has zero tolerance to reprisal or retaliation against anybody who voices its opinion or opposition to IDB Invest-financed projects.
For inquiries, comments and information requests about the project
Request informationLearn more about how we provide private-sector solutions in the region .
Environmental and social review
IDB Invest conducts an environmental and social due diligence (ESDD) commensurate with the nature, scale, and stage of the project, and with its level of environmental and social risks and impacts. The ESDD will confirm the project E&S categorization and assess the project with respect to the client requirements in IDB Invest Environmental and Social Sustainability Policy. The results of the ESDD, including any identified gaps are described in the Environmental and Social Review Summary (ESRS) provided below. For projects approved as of 2016, any gaps with respect to IDB Invest's Environmental and Social Sustainability Policy at the time of the ESDD are addressed in the Environmental and Social Action Plan (ESAP) presented below, to comply with the date mentioned above.
DARBY LAC GREEN DEBT FUND (ESRS)
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