BioVeda China Fund II, L.P.

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	26239
Company name	BioVeda China Fund II, L.P.
Country	China
Sector	Collective Investment Vehicles
Environmental category	FI
Department	Private Equity and Investment Funds
Status	Active

Date SPI disclosed	June 22, 2007
Projected board date	July 30, 2007
Previous Events	Invested: November 1, 2007 Signed: September 24, 2007 Approved: September 11, 2007

Overview

Sponsor/Cost/Location

Development Impact

Contacts

Attachments

Project description

BioVeda China Fund II, L.P. (BioVeda II or the Fund) is a venture capital fund seeking to raise $100 million for investment exclusively in the life science and healthcare industry in China. The Fund will make equity investments in 12 to 15 privately-held, later-stage companies in a range of sectors, including biotechnology and pharmaceuticals; medtech (medical devices and diagnostics) as well as healthcare (services and hospitals).

Anticipated development impact of the project

The Fund is expected to deliver strong development impact by:
- Supporting fast-growing, high-tech SMEs operating in the life sciences and healthcare industry by providing risk capital and much-needed management expertise;
- Encouraging economic development in general, and private sector development in particular, in an industry currently dominated by state-owned enterprises;
- Helping to improve people’s lives by encouraging the development of new drugs and medical devices;
- Promoting job creation in investee companies; and
- Improving companies’ corporate governance and environmental and social standards.

IFC's expected development contribution

Through its investment in the Fund and participation in the Advisory Board, IFC will have the following roles:
- Playing a catalytic role in supporting an emerging fund manager (see below);
- Structuring the terms to international standards to attract institutional investors;
- Helping to adopt best-practice corporate governance at the fund and portfolio company level; and
- Providing additional industry experience on the Fund’s board level.

Environmental and social issues - Category FI

This project has been classified as Category FI project according to IFC’s Environmental and Social Review Procedure. Considering the nature and sectors of the projects that the fund is expected to invest in, the Applicable Performance Requirements are:

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

IFC has invested in a previous fund (classified as FI-2) with the fund manager and is reviewing the performance of the same based on submitted information. As part of the appraisal for this project, IFC will also review the capacity of the fund to manage social and environmental risks and to establish and maintain a Social & Environmental Management System (SEMS). IFC will suggest supplemental actions as required to address any gaps in the SEMS. The fund manager will be required to:

- Develop a formal 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 Performance Requirements;
- Submit a periodic report to IFC as per a format to be provided by IFC.

IFC PROJECTS