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| Curro NEW |
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| 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 | 29196 |
| Company name | Curro Holdings PTY Limited |
| Country |
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| Sector | Elementary and Secondary Schools |
| Environmental category | C |
| Department | Reg Manufact, Agri & Services, CAF/CLA |
| Status | Pending Disbursement |
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| Date SPI disclosed | January 6, 2010 |
| Projected board date | February 15, 2010 |
| Previous Events | Signed: March 31, 2010
Approved: March 29, 2010 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| Curro Holdings (Pty) Limited (“Curro” or the “Company”) is a K-12 education services provider which operates three schools located in the Western Cape and Gauteng provinces of South Africa. The Project includes the expansion of the existing schools and construction of five new schools. 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. |
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| Project sponsor and major shareholders of project company |
| Until June 2009, Curro was owned by eight individuals through their family trusts, with controlling interest held by Dr Christiaan van der Merwe (founder and CEO) and Adv Andries Johan le Roux (non-executive director). To support Curro’s current expansion, Paladin Capital, majority (94%) owned by PSG made an investment for a 50% stake in the Company. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated at ZAR150 million. IFC’s proposed investment is a ZAR75 million A loan. |
| Location of project and description of site |
The existing Schools are in
Durbanville (Western Cape Province) – a suburb located about 20km north of Cape Town.
Langebaan (Western Cape Province) – a growing suburb situated in a small west coast town just over 100km from Cape Town
Hazeldean (Guateng Province), a new suburb located 50km east of Pretoria.
The new schools will also be in sub-urban residential locations. |
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| Anticipated development impact of the project |
The proposed project will have a strong development impact by improving access to high-quality K-12 education for South Africans. To begin with, middle-income households will be the main beneficiaries. Curro will also extend its reach to lower-income populations by developing a model including bursaries for poor students and partnering with schools serving disenfranchised communities.
The emerging middle class in South Africa as well as previously disadvantaged groups want affordable high-quality education for their children but there are not enough public schools to meet the demand making Curro an attractive alternative. The project will also relieve the burden on the already stretched public school system.
Curro's results-oriented education will improve the quality of high school graduates in the short term and the quality of graduates that enter the job market in the long term. |
| IFC's expected development contribution |
IFC's proposed long-term corporate loan will meet Curro's cash flow needs and allow it to grow at a faster pace and undertake its expansion more strategically than if it was to rely on local financing sources. IFC also offers a longer grace period than local banks, enabling Curro to utilize more of its generated cashflows to fund CAPEX.
IFC is also providing Curro with sector-specific advice on environment and social issues, risk mitigation through phased implementation, and helping Curro to reach lower-income populations.
IFC's international brand and knowledge of the education sector are expected to enhance Curro's profile and increase the interest of strategic investors.
IFC's holistic approach increases Curro's flexibility in implementing the project and committing quickly to buying land when opportunities arise. |
| Environmental and social issues - Category C |
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.
During appraisal, the team will focus on the implementation of tasks identified in the Environmental and Social Action Plan (ESAP) developed after the previous appraisal findings. The investment should therefore comply with host country laws and regulations, applicable IFC Performance Standards and specifically applicable sections of the IFC General Environmental, Health and Safety Guidelines upon completion of agreed ESAP measures.
Based on these considerations, this is a Category C project according to IFC’s Environmental & Social Review Procedure, and 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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| For inquiries about the project, contact: |
Curro Holdings (Pty) Limited
Monaco House
14 Church Street
Durbanville 7550
South Africa
Fax: 021 975 6318
Email: Curro@new.co.za
www.curro.co.za |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
Curro Holdings (Pty) Limited
Monaco House
14 Church Street
Durbanville 7550
South Africa |
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