Quvat Capital Partners II Ltd.

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	26818
Company name	Quvat Capital Partners II Ltd.
Country	Indonesia
Sector	Collective Investment Vehicles
Environmental category	FI
Department	Private Equity and Investment Funds
Status	Pend FAP

Date SPI disclosed	May 9, 2008
Projected board date	June 12, 2008

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

The project is a proposed equity investment of up to $30 million in Quvat Capital Partners II Ltd., (the Fund), a 10-year closed-end private equity fund. The Fund is seeking capital commitments to make equity and equity-linked investments in Indonesia, Singapore and Malaysia, with a primary focus on Indonesia.

Anticipated development impact of the project

An IFC investment in The Fund is expected to deliver the following development impacts:

- Stimulate private sector growth – The Fund is expected to provide risk financing to fast-growing private companies across a wide variety of sectors, and help them improve competitiveness and sustainability.

- Promote the development of non-bank financial institutions – The potential success of The Fund will provide a commercial proof that private equity is viable in Indonesia, and will promote further growth of this nascent industry in the country.

- Enhance standards of corporate governance, environmental and social practices – The Fund as well as its investee companies are expected to adopt higher standards in corporate governance, environmental and social practices.

IFC's expected development contribution

IFC is expected to make the following unique development contributions:

- Help Quvat Management build a more stable and diverse investor base in Indonesia which attracts relatively little private equity.

- Share global experience and independent deal judgment in certain sectors, as well as fund management expertise with the investment manager.

- Assist Quvat Management in establishing and maintaining a Social and Environmental Management System (SEMS), and in practicing sustainable investing.

Environmental and social issues - Category FI

This project has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure.

During appraisal, IFC will analyze the Fund’s expected portfolio and sectors of investment and determine the Applicable Requirements if any, that would include a combination of:

- The IFC FI Exclusion List; and/or,
- The applicable National Social and Environmental Laws and regulations; and/or
- The IFC Performance Standards.

IFC will also review, if required, the capacity of the Fund to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC may suggest Supplemental Actions to address any gaps in the SEMS if required.

The Fund Manager will be required to:

- Develop, or upgrade, if necessary, any existing SEMS, prior to disbursement to the satisfaction of IFC,
- Identify responsible, qualified persons to manage and implement the SEMS,
- Commit to implement the SEMS to ensure that its investments/activities are in compliance with the Applicable Requirements,
- Take action to remedy any gaps in SEMS implementation on an ongoing basis, and
- Submit a periodic report to IFC as per a format to be provided by IFC.

IFC PROJECTS