Select Committee on International Development Minutes of Evidence



APPENDIX C

EXAMPLES OF RECENT CDC INVESTMENTS AND THEIR ASSOCIATED IMPACT

AQUARIUS PLATINUM, SOUTH AFRICA

Date of first investment

 

2001

Investment amount

 

US$12 million

Type of investment

 

Expansion capital

Type of business

 

Platinum mining

Impact

Enabling development of three smaller mines that support the ANC government's "use it or lose it" policy—ie smaller projects than the major mining companies would consider

 

Two mines to involve partnership with a black empowerment group

 

Foreign exchange (US$) earnings for South Africa

 

CDC pressure succeeded in bringing about high environmental and safety practices.

Employment

 

20 and over 300 contractors


   

 

MEDIKREDIT, SOUTH AFRICA

Date of investment

 

2001

Investment amount

 

US$7 million

Type of investment

 

Management buyout/expansion capital

Type of business

 

Healthcare administration

Impact

Enabled talented local management team to take control of business from western MNCs

 

Delivering efficient and low-cost administrative support to healthcare industry by processing claims for medicines, procedures, consultations and hospitals

 

Data-mining improves understanding of local epidemiology, leading to improved disease management and clinical outcomes

 

Potential for roll-out to other African countries

Employment

 

200

 

MEDSCHEME, SOUTH AFRICA

Date of first investment

 

2001

Investment amount

 

US$7.8 million

Type of investment

 

Replacement capital

Type of business

 

Healthcare administrator

Impact

Enables companies to better manage employee health schemes

 

Provides services to large public sector clients employing lower income workers and covering families; one client accounts for 300,000 lives insured

 

Investment in consortium with a black empowerment company

 

Large local employment base

Employment

 

3,500


   

 

MSI CELLULAR, PAN AFRICA

Dates of investments

 

1998, 2000, 2001

Investment amount

 

US$64.5 million

Type of investment

 

Start-up, then follow-up investment

Type of business

 

Pan-regional cellular telephony operator

Impact

Creation of vital communication network for businesses and individuals; reliable alternative to ineffective fixed line infrastructure

 

CDC mobilised third party investors

 

Contributes to Millennium Development target of telephone lines per 1000 people

 

Supported local licence bids

Employment

 

10 (1998) to 1,224


   

 

NORTHPOLE, CHINA

Date of investment

 

2001

Investment amount

 

US$20.5 million

Type of investment

 

Replacement capital

Type of business

 

Tent/outdoor furniture manufacturer

Impact

Export business with large employment base

 

Supports sub-contractor factories in Bangladesh and Sri Lanka

 

CDC has persuaded management to implement consultative workplace structures, which allow employees a regular forum to raise any concerns

Employment

 

4,500

 

PRAXIS ACTIVE EQUITY FUND II

Date of first investment

 

2001

Investment amount

 

US$8 million

Type of investment

 

Fund start-up

Type of business

 

Healthcare fund

Impact

Invests smaller sums than CDC usually does, down to US$1.5m

 

The Fund's management team, which includes a qualified medical practitioner, have an active and proven approach to creating small, sustainable South African healthcare businesses

 

A key investment is Prime Cure Clinics, which provides affordable primary healthcare to blue collar workers in rural areas and around townships, through a network of 50 clinics

Employment

 

10


   

 

REGAL FOREST HOLDINGS, CENTRAL AMERICA

Date of first investment

 

2000

Investment amount

 

US$15.7 million

Type of investment

 

Rescue

Type of business

 

Household goods retailer

Impact

Sells household goods at affordable prices—such as fridges, washing machines, sewing machines, TVs and kettles

 

A major employer—operates 205 stores in both urban and rural areas

 



CDC rescued the business from receivership, after the region had suffered from the effects of El Nino

Reacted to the El Salvador earthquake by further reducing its prices

Employment

 

3,248

 

SONGAS, TANZANIA

Date of investment

 

2001

Investment amount

 

US$18 million

Type of investment

 

Start-up

Type of business

 

Development of inland gas pipeline to provide Tanzania with cheaper power supply

Impact

Enable replacement of expensive imported fossil fuels and add to rehabilitating of chronically erratic power supply

 

Greater development and utilisation of indigenous resource

 

CDC was lead negotiator between private investors and Government of Tanzania

 

CDC committed to completing the deal over a lengthy period of time

Employment

 

100


   

 

TSAVO POWER, KENYA

Date of first investment

 

2000

Investment amount

 

US$19 million

Type of investment

 

Start-up, alongside sponsor Wartsila

Type of business

 

Power station

Impact

Reduced Kenya's dependence on the unreliable supply of hydro-electricity

 

Added much-needed power capacity for homes and businesses, when power cuts were frequent and sometimes lengthy

 

Investors included some commercial banks for whom this was the first project of its type in East Africa

 

Single largest private sector investment in Kenya's history

Employment

 

100 during construction and 50 operational


   

 

UTI BANK, INDIA

Date of first investment

 

2001

Investment amount

 

US$33 million

Type of investment

 

Expansion capital

Type of business

 

Commercial/retail banking

Impact

Developed a strategy for retail banking operations which will deliver services to small businesses and individuals, many of whom have no ready to banking access today

 

Working alongside NGOs to offer micro-lending to poor rural communities

 

Implementing international best practice in terms of business principles/anti-money laundering

Employment

 

1,800

 

YVRAS, INTERNATIONAL

Date of first investment

 

2001

Investment amount

 

US$33 million

Type of investment

 

Expansion capital

Type of business

 

Airport operator

Impact

Providing improved facilities for import, export and tourism at airports in Chile, Dominican Republic, Jamaica and Egypt

 

Raising standard of infrastructure to international levels

 

Helped Dominican Republic complete international US$213 million bond issue, to help finance further development

Employment

 

55



   

 

 


 
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