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| Summary of Project Information (SPI) |
| This Summary of Project Information 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. |
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| Project number | 24398 |
| Project name | Fundo de Educacao para o Brasil |
| Country | Brazil |
| Sector | Education Services |
| Department | Health and Education |
| Company name | Fundo de Educacao para o Brasil |
| Environmental category | B |
| Date SPI disclosed | December 21, 2005 |
| Projected board date | January 23, 2006 |
| Status | Active |
| Previous Events | Invested: June 13, 2006
Signed: May 25, 2006
Approved: May 11, 2006 |
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| Description of company and purpose of project |
The Fundo de Educação para o Brasil (the Fund or FEBR) was structured by Banco Patria, one of Brazil’s leading private equity firms, as an investment vehicle focused on the post-secondary education segment in Brazil. FEBR has one single asset, a controlling stake in Anhanguera Educacional S.A. (AES). The Fund will channel its investments in the sector through AES.
AES is a private, for profit, São Paulo based, post-secondary education company with 10 campuses and average enrollment of 16,800 students in 2005. AES focuses on offering good quality, affordable education to lower-income students in Brazil.
IFC’s investment of up to $16 million will be used to fund part of AES’ expansion strategy, centered on building new campuses in small to medium sized cities in the state of São Paulo and other regions in the Brazilian Southeast – the country’s most prosperous – over a 3 year implementation period. |
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| Project sponsor and major shareholders of project company |
| The project sponsor is the Fundo de Educação para o Brasil (the “Fund” or “FEBR”). FEBR is an investment vehicle focused on the post-secondary education segment in Brazil. FEBR was structured by Banco Pátria, one of Brazil’s leading private equity firms, to explore investment opportunities in the Brazilian post-secondary education market. Today, FEBR has among its investors highly respected operators in the Brazilian post-secondary education market and influential business leaders. FEBR owns a 69% stake in AES. |
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| Total project cost and proposed IFC investment |
| The total project cost is expected to be $71 million. IFC’s participation in financing the projects will be comprised of a $12 million loan and a $4.5 million equity investment. |
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| Location of project and description of site |
| AES’ expansion strategy will be focused on small to medium sized cities in the state of São Paulo and other regions in the Brazilian Southeast – the country’s most prosperous – over a 3 year implementation period. |
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| Project Development Impact and IFC's Role |
The project will have a strong development impact in increasing access to post-secondary education, particularly for lower-income students who have limited access to other private or public institutions in Brazil. There is still demand for places in private post secondary education institutions today, with an average of 2.5 applications per place in state institutions and around 1.5 applicants per place in private institutions.
Brazil has one of the world's largest budgets per student in public higher education institutions. In 2000, Brazil spent around $13,600 per student, second only to the USA ($19,200 per student) and by far the highest of any developing country. There are two issues worth noting:
- the system caters mainly to the elite; and
- even after such high education expenditures per student, education outcomes are highly variable.
Private institutions are starting to 'raise the bar' in terms of quality, and AES continues to be highly rated, even as it grows quickly, by the Ministry of Education. It accomplishes this with one of the most efficient delivery models in Brazil.
IFC value added to FEBR and AES include the following:
- well-positioned to bring best practices in the sector to the company;
- insert AES into a network of international higher education institutions;
- leverage sector experience to assist in evaluation of future expansion opportunities;
- provide measure of political cover and enhance sponsor group credibility vis-à-vis Ministry of Education and other government authorities;
- source of long term financing (FEBR can only take on debt from BNDES and multilateral institutions);
- enhance AES’s credibility with other higher education institutions, potentially facilitating a sale or listing of the company in the future. |
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| Environmental and social issues - Category B |
This is a Category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result which can be avoided or mitigated by adhering to generally recognized performance standards, guidelines or design criteria. The review of this project consisted of appraising technical and environmental / social information submitted by the project sponsor. Issues to be addressed include minor fire and life safety provisions for school buildings.
To view the environmental documents for this project, click here |
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| Location of environmental documents in locally affected community |
Environmental documentation will be made available at the following location:
Anhanguera Educacional S.A.
Al. Maria Tereza no. 2000
Dois Corregos, Valinhos |
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| To contact the project company, please write to: |
Alexandre Texeira de Assumpção Saigh, Director
Banco Patria
Av. Brig. Faria Lima, 2055 – 7o andar
01452 001 – São Paulo – Brazil |
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