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SEAF Funds Complete Exit from Peruvian Hydroelectric Power Plant Investments

13 June 2012

(SEAF) June 13, 2012 – Small Enterprise Assistance Funds (SEAF) announced that three SEAF-managed Latin American funds exited their investment in Hidroelectrica Santa Cruz S.A.C (HSC), a hydroelectric power plant operator in Peru, in February.

Fondo Transandino Peru (FTP), Fondo LATAM Peru (FLP), and LATAM Growth Fund (LGF), invested USD 10.57M total in HSC with the first disbursement being made in December 2007. These investments provided HSC with growth capital to build and operate five hydroelectric power plants in Santa Cruz, Peru. In February, SEAF sold the funds’ shares in HSC to a Brazilian firm that develops renewable energy projects in Latin America.

LGF Director Harry Schuster said the exit demonstrated a significant accomplishment. “This exit marked the first time that a private equity fund has made a strategic exit from an investment in Peru. At the same time, SEAF’s investment left HSC stronger than ever, while shoring up the area’s infrastructure, and increasing the efficiency of local business and improving their access to other markets. By targeting investment to this medium-sized enterprise, we supported the development of local, income-generating industries, and created new job opportunities for the local community.”

As a hydroelectric power plant constructor and operator, HSC directly combats global warming and climate change by providing a clean energy alternative — hydroelectric power. HSC’s power plants use a run-of-river mechanism to produce electricity without damming the river and causing a negative impact on the local ecosystem. Under the Kyoto Protocol, this type of energy generation is eligible to issue carbon credit bonds.

In addition to its environmental impact, the SEAF-fund investments in HSC also carried notable development impacts. During the construction of its rural facilities in Ancash and Junin, HSC employed local labor and provided construction training as well as attractive daily wages, significantly higher than community averages. A portion of HSC’s electricity production was channeled to the local community to provide light and power to the previously isolated population, and HSC donated cash and computers to the community to build a school as well as additional resources to renovate the village church.

Major investors in FTP include SEAF Trans-Andean Early-Stage Fund, the Belgian Investment Office (BIO), Swiss Investment Fund for Emerging Markets (SIFEM AG), and local partners AFP Prima and AFP Integra.

FLP investors include SEAF’s LGF, and local investors AFP Horizonte, AFP Integra, and Corporacion Financiera e Desarrollo S.A. (Cofide). Key investors in LGF range from the Finnish Fund for Industrial Cooperation Ltd. (Finnfund), to BIO, and SIFEM AG.

About SEAF
SEAF is an SEC registered investment adviser to international private equity funds through which it has invested growth capital and provided business support to growth-oriented small and medium-sized enterprises (SMEs) in frontier and emerging markets for over two decades. With assets under management (AUM) of USD 433M, SEAF’s funds identify and support promising entrepreneurs while seeking to provide returns to investors. SEAF manages its funds through a network of 21 offices around the world, with its headquarters in Washington, D.C.