Curro Schools

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.

Project number	26743
Company name	Curro Holdings PTY Limited
Country	South Africa
Sector	Education Services
Environmental category	C
Department	Health and Education
Status	Pending Approval

Date SPI disclosed	June 13, 2008
Projected board date	July 16, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

A phased expansion of Curro Schools operations (Curro) from a single campus to a network of K-12 day schools located around South Africa. The project includes the expansion of an existing school, construction of five new school campuses (two of which are substantially completed) and an investment in a mail based part-time distance learning program to cater for learners who have completed at least the 9th grade. The project responds to the increasing demand for quality education from South Africa’s expanding middle class, and the difficulty the public schools are facing with meeting this demand.

Curro offers a lower learner to teacher ratio, than that available in public schools as well as a more rounded education including academia, sports, culture and arts. To reach its target market Curro will establish campuses in developing sub-urban residential areas and offer quality outcome based education where the South African government is not able to establish sufficient public schools within reasonable proximity. Curro’s fees would be significantly lower than that of the typical South Africa private school and be payable in affordable monthly installments. The distance program is designed to be affordable to low income students who do not have access to formal full-time education.

Anticipated development impact of the project

Financial support to less privileged learners: Curro currently provides financial assistance bursaries to families that cannot afford its fees. Revenue linked bursaries are an integral part of their business plan; therefore the growth will lead to additional scholarships.

Donations to lower income groups: Curro supports lower income groups through donations for example computer equipment are donated to schools which cater to lower income South Africans.

Distance Learning opportunity for 10th Grade Drop-Outs:
The distance learning program is an opportunity for learners who were not able to complete their high school education to study part-time and increase their job prospects. The program’s flexibility will make it able to cater to a wide variety of people with different constraints regarding full time formal education.

Ease the burden on overstretched public schools:
The project will improve access to good quality outcome based (i.e. result oriented) education in South Africa and
relieve the burden on the already stretched public schools, contributing to better education for those who cannot
afford private schools.

IFC's expected development contribution

IFC will provide quasi-equity which is not ordinarily available. The tenor and grace period will be longer than is normally available to the education sector. Also, IFC has a holistic approach to the project rather than considering financing on a school-by-school basis and is also providing recommendations on phasing the project. Finally, IFC’s participation brings additional credibility to the group and thus makes the project more attractive to strategic equity investors.

Environmental and social issues - Category C

This is a Category C project with minimal adverse social and environmental impacts. Curro purchases property previously included in a residential housing master development plan. By the time the property is offered for sale by the developer both the parcel and the entire development have been examined in environmental and social impact studies and permits have been granted for all aspects of the development. As most concerns for the environment have already been evaluated and mitigated, this project is deemed to have minimal risk and impact. Thus, as a Category C project an Environmental and Social Review Summary (ESRS) will not be produced and no disclosure is required.

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