British International Investment

Mediterrania Capital IV (MCP IV)

MoroccoNorth AfricaConsumer - Health

Mediterrania Capital IV is a generalist fund focused on investing across the mid-cap segment in North Africa and Francophone West and Central Africa.

Our investment

Description of the investment.

We invested EUR 15 million in Mediterrania Capital Partners' fourth fund: Mediterrania Capital IV. The fund will focus on key sectors such as financial services, healthcare, FMCG, manufacturing and tertiary education. The fund is 2X qualified, based on the fund manager’s commitment to 30 per cent of investees meeting the 2X criteria at the point of investment, rising to 70 per cent by exit, and credible commitments to meet the 2X thresholds at the GP level within two years of close.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact

Access to finance for businesses and capital markets, primarily enabling business expansion and job creation through productivity gains (SDG 8).

How?

How?

Business growth and creation of employment and economic opportunities by providing capital and value add to 8-10 mid-cap companies.

Who?

Stakeholder Geography Characteristics
Variable depending on portfolio company (customers, employees, suppliers)

Primarily North Africa (50 per cent Morocco, 25 per cent Egypt), and Francophone West Africa (maximum 25 per cent)

Variable. Potential reach to some low-income customers, employees and/or suppliers in sectors such as manufacturing, financial services, healthcare. All companies will have a Gender Action Plan to strengthen 2X credentials (target of 70 per cent of investee companies being 2X-qualified at exit).

How much?

Scale Depth/Duration

We expect the fund to perform in line with our benchmarks for generalist funds in Africa in terms of revenue and job creation. As the fund continues to develop its impact framework, other measures of impact may be introduced, e.g. related to job quality, gender, climate.

  • Depth: Depth of impact will largely relate to job growth and quality, gender activities and application of a new climate policy.

  • Duration: Upon investment in a company, the fund manager immediately begins implementing an agreed ESAP, as well as identified priorities related to gender and climate. The pace of implementation will vary by portfolio company, but expected duration is long as new practices are embedded into business models.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Given the critical role DFIs are playing in both first close and fundraising in general, there is clear financial additionality.

  • Value additionality: This will likely be less material, but we will explore opportunities with a specific focus on gender.

Risk

Execution Risk

Risk related to the fund failing to achieve optimal size, leading to sub-optimal portfolio and impact. This is aligned with commercial risk, and is mitigated by backing an experienced top performer

External Risk

The fund aims to invest substantially in both Egypt and West Africa, both of which are experiencing challenging macroeconomic conditions. This risk is inherent in these markets and has to be tolerated, but is mitigated by backing an experienced regional investor.

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.

  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

The Fund is rated as a Medium-High inherent risk because the pipeline includes heavier industrial activities. As part of our investment in Fund IV, we will work with MCP to upgrade its ESMS and increase its E&S capacity.

Environmental and social risk

Medium-High

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    First published

    When the investment was first published on the website database.

    :
    March 2024
    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D6073
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    North Africa
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Consumer - Health

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Fund
    Start date :
    November 2023
    Amount :
    $15.86m
    Currency of investment :
    EUR
    Fund Manager:
    Mediterrania Capital Partners Limited
    Domicile

    The company or investment fund’s place of incorporation.

    :
    Mauritius
    2X Gender Finance

    Indicates whether the investment is ‘2X qualified’ using the 2X Challenge criteria. You can find out more here. It only applies to investments made from 2018 onwards, when the 2X Challenge was first launched.

    :
    Fully qualified

Investments made by this fund into companies:

For further information about these companies, visit https://www.mcapitalp.com/

Investment name Country Region Sector Start date Status
Laprophan Pvt.Ltd Morocco North Africa Consumer - Health February 2023 Active

Subscribe to receive our latest news and updates