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
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FI-2

Country

Regional

Sector

Financial Institutions

Status

Proposed

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
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08/23/2022

Approval date

08/02/2022

Signed date

N/A

Sponsoring entity

Darby International Capital

Team leader

Ferro De Sanctis, Carlos Numen

Investment type

Syndicated amount

N/A

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.

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Learn 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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For inquiries, comments and information requests about the project

Request information

Learn more about how we provide private-sector solutions in the region.

Contact information

For inquiries, comments and information requests about the project

Request information

Alternatively, you may also use the following contact information:

Client Contact

CONTACT NAME

Ignacio Aicardi

POSITION

Chief Investment Officer & Founder

PHONE NUMBER

202-215-7285

EMAIL

iaicardi@darbyinternational.com

IDB Invest Contact

EMAIL

requestinformation@idbinvest.org

PHONE

+1(202)-566-4566

ADDRESS

1350 New York Ave NW, Washington, DC 20005

COUNTRY OFFICES

IDB Invest Country Offices