Project detail - XIC Latin America Fund I, L.P.

Who is our prospective customer?

XIC Latin America Fund I (“XIC” or “the Fund”) is a pan-LAC private equity fund focused on renewable energy (mainly) and sustainable infrastructure. The Fund has a target size of $300M and is managed by Exagon Impact Capital. Potential first close investors include FMO, other Development Financial Institutions (“DFIs”), as well as commercial investors.

What is our funding objective?

The funding objective of this investment is to provide the fund manager with the mandate as well as the funds to invest capital to projects and platforms to construct and scale-up renewable energies in Latin America. FMO intends to commit USD 25 mln to the fund. The fund invests in the construction of both utility-scale as well as distributed renewable energy infrastructure, which will benefit both the general public as well as SMEs.

Why do we want to fund this investment?

This opportunity fits well with FMO’s Private Equity Energy strategy of pursuing impactful, 100% green energy fund investments and increasing the FMO Latin America & Caribbean (LAC) exposure, one of the core geographies within FMO’s investment mandate. By investing in XIC, FMO seeks to address the Energy Transition needs in the region in a sustainable and responsible manner as the Fund, through its underlying investments, would significantly contribute to the renewable energy deployment in the region. This transaction is expected to contribute to local job creation and provision of clean & affordable energy.

What is the Environmental and Social categorization rationale?

The investment scope of the Exagon private equity fund includes activities that may be E&S risk category B, B+ and category A, depending on the nature of these activities and the specific characteristics of the individual investment opportunities. Therefore, this investment opportunity has as a precaution been classified as E&S Risk Category A. Depending on the outcome of FMO’s pre-investment due diligence process and if justified by the fund’s risk appetite statements, investment criteria, and screening process, it may be adjusted to E&S risk category B+. The activities in the investment scope of the fund will typically trigger IFC Performance Standards (PS) 1 to 4. In addition, individual investment opportunities in greenfield projects may trigger PS 5, 6 and 8. Investment opportunities in projects triggering IFC PS 7, affecting indigenous peoples, will not be pursued. The fund manager has a professional, experienced team in place, which will be complemented with a full time dedicated E&S expert position. An Environmental & Social Management System is in place. Based on the pre-investment due diligence outcomes, this management system will be improved and amended where needed.