DFC-001B - Application for Direct Equity Investment

Application for Direct Equity Investment (DFC-001B)

OMB No. 3015-0004

Expiration Date: 8-31-2022

United States International Development Finance Corporation

1100 New York Avenue, NW Washington, DC 20527-0001

An Agency of the United States Government

Responses to questions which call for estimates or projections should take the form of good faith statements made to the best of the applicant’s knowledge and belief. Statements of fact provided in this document must be accurate as of the date of submission. Anyone who knowingly makes a false statement with the intent to influence DFC’s guarantees, loans, or other investments may be criminally prosecuted.  Such false statements are also grounds for DFC to terminate a commitment or declare a contract default.  These rights are in addition to any other rights or remedies available to the United States government. Neither submission nor acceptance of this application implies that the proposed transaction is eligible for support or that support will be provided.

Information provided in this form will be deemed designated as “confidential commercial information” in accordance with Freedom of Information Act (FOIA) regulations at 22 C.F.R. Part 706, and will be treated as such to the extent permitted by applicable law.

Paperwork Reduction Act Notice: This information is required to obtain or retain benefits. Federal agencies may not collect information unless a valid OMB Control Number with an expiration date that has not expired is displayed. The public reporting burden for this collection of information is estimated to average 90 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspects of this collection of information, including suggestions for reducing this burden, to Agency Clearance Officer, Records Management, United States International Development Corporation, 1100 New York Ave., NW, Washington, DC, 20527 and to the DFC Desk Officer at the Office of Information and Regulatory Affairs, Office of Management and Budget, New Executive Office Building, Room 10202, Washington, DC 20503.

This Form and any attached supporting documentation will enable DFC personnel to make a preliminary determination of whether your proposal meets eligibility and basic underwriting requirements. Please click here to review the basic eligibility requirements. For a description of DFC’s Direct Finance origination process and answers to frequently asked questions (FAQs), please click here. For general questions or eligibility questions, please email [email protected]. If a particular question on this form is unclear, please email [email protected].

QUESTION 1: IDENTIFY THE PROPOSED INVESTEE

In each DFC-supported transaction, DFC enters into a contractual relationship with an Investee . Please list the location and contact information for that party. If that party has not yet been formed/incorporated, please list approximate information that will allow us to create a placeholder for that party in our transaction tracking systems.

Investee

Name:

Address (incl. city and country):

website (if avail):

DUNS Number:

U.S. Tax Identification Number: or N/A – Not a US Taxpayer

Is the country listed in the address of the Investee Party the location where the funds provided or guaranteed by DFC will be utilized? (Yes/No)

If “No,” please list the actual location (city, country):

QUESTION 2: IDENTIFY THE APPLICANT Representative

Please provide contact information for the individual who will be DFC’s primary point of contact regarding this application.

Name and Title of Representative:

Relationship to the Investee: (Change this to a drop-down box)

Name of Representative’s Company (if different from the Investee)

Address:

Phone Number 1 (office):

Phone Number 2 (mobile):

E-mail:

QUESTION 3: IDENTIFY tHE KEY PARTIES INVOLVED WITH THE TRANSACTION

Evaluating the business entities and/or individuals that will own, manage or make other critical contributions to the transaction being financed is an important part of DFC’s investment process.

Please attach detailed chart(s)/schematic(s) showing the structure of the proposed transaction and key relationships. These may include ownership capitalization table, organizational/ management structures, contractual relationship schematics, etc. Please click here for examples.

[Mandatory “Attach” button]

Please list and provide requested information on each of the following types of entities/individuals. If an entity/individual plays multiple roles in a transaction, only list them once and indicate their most important/primary role:

• Each business entity/individual that owns 10% or more (either directly or indirectly) of the Investee/transaction.

• Each business entity/individual that does or intends to provide credit support (e.g. a guarantor)

• Each business entity/individual that does or will have a significant managerial relationship with the Investee/transaction (e.g. executives/directors).

• Each business entity/individual that does or will have a primary contractual relationship with the Investee (e.g. construction contractor, operations and maintenance contractor, hotel management company, etc.)

Note: Certain governmental/multilateral parties that may be involved and shown in the attached charts need not be listed here. Please click here for a definition of such parties.

Name
Type of Entity	Two choices: Individual or Business Entity
Country of Citizenship (for Individuals) or Incorporation (for Business Entities)
Primary Relationship to Investee	Choices – Owner/Shareholder, Lender, Manager/Director, Contractor
Minority Owned or Led?	Y/N
Women Owned or Led?	Y/N
If yes, please provide:
% owned by women	%
# of women on Board of Directors	#
names and titles of women owners and executives:	Text box
Is this Party interested in DFC PRI?

QUESTION 4: DescriBE THE TRANSACTION

Please provide a brief description of the proposed transaction, making sure to address the following:

• What are the objectives – commercial-financial and social-developmental – of the proposed transaction?

• What factors or resources under the control of the involved parties will contribute most toward meeting those objectives and why?

• How would DFC’s participation in the transaction contribute to its success?

Please attach the following supporting documents:

Business Plan/Preliminary Information Memorandum [click here for guidance]	[Insert required button for attachment]
Financial Projections Model [click here for template and user guides]	[Insert required button for attachment]
Historical Financial Statements [click here for guidance]	[Insert required button for attachment]

QUESTION 5: transaction sources AND uses

Please provide a detailed list of the estimated sources and the uses of funding that will be used to cover them. Remember to include both hard/physical asset uses (e.g. buildings or equipment) and soft/implementation uses (e.g. legal or consultant services, fees, contingency etc.) in the use estimate. The total use amount in Column A must equal the total sources amount in Column B. For an example, please click [here].

	Column A			Column B
Uses	USD	%	Sources	USD	%
			Debt:
			DFC loan (indicate proposed term)
			Other term debt (indicate proposed term)
			Supplier financing
			Subordinated Debt:
			Third party subordinated debt
			Shareholder subordinated loans
			Equity:
			DFC Equity
			Cash
			In-kind contribution1
			Grants
			Other (please describe)
Total Uses:			Total Sources

Balance Sheet Comparison

Existing Balance Sheet	USD	%	Proposed Future Balance Sheet	USD	%
Total Assets			Total Assets
			DFC Debt
Total Debt/Liabilities			Non-DFC Debt/Liabilities
Net Worth			DFC Equity
			Non-DFC Net Worth

Would DFC equity be used to repay any existing debt? Yes/No

If yes, please describe the source and current terms of the debt that would be repaid and why the repayment is important to the overall objective of the transaction.

QUESTION 6: Management Experience and Track Record

Briefly describe relevant experience (in the sector, in the market, etc.) that the key parties (individually or as a team) may contribute towards the success of the proposed transaction.

Please attach a document compiling CVs or other documentation that demonstrates this experience: [insert required attach button]

Question 7: PROVIDE INFORMATION ON PRIVATE SECTOR SOURCES OF FINANCING

DFC does not compete with private sector providers of financing. Therefore, DFC requires that applicants: (a) evaluate the possibility of obtaining financing from private sources and (b) decide to pursue DFC financing because private financing is not available on terms sufficient to make the investment viable or because of specific benefits DFC participation will bring to the investment.

Have you evaluated the possibility of obtaining financing for this transaction from private sector sources?	Yes	No
Have you determined that private sector financing is not a viable option in this case?	Yes	No
If Yes, please list the private sector funding source(s) you have approached regarding this transaction and explain why private financing is not a viable option (i.e. country capacity limits, unworkable tenor and/or pricing).

QUESTION 8: CONSIDERATION FOR GRANT/TECHNICAL ASSISTANCE FUNDING

In situations where the investment being proposed is highly developmental and requires a grant or similar funding for feasibility studies, training or other investment development activities, DFC may be able to provide such funding. If the investment is successful to the extent that it becomes capable of repaying this funding to DFC, then it would be required to do so.

Would you like to be considered for this type of funding? Yes/No

If Yes, please provide the following:

Amount Requested: USD_________

Description of the activities on which the funds would be used and how those activities are required for the successful development of the overall investment:

QUESTION 9: HOW DID YOU LEARN ABOUT DFC?

DFC is interested in knowing what types of communications about its programs are most effective. If this is the first time you are applying for a DFC product, please select the source of your initial information about DFC:

N/A – This is not my first application to DFC

____ DFC’s website or other social media (Twitter, Facebook, etc.)

____ DFC-sponsored workshop or event (Name of event________________)

____ DFC speaker at an industry event (Name of event_________________)

____ Other US Government Agency (e.g. State/Embassy, Commerce, Treasury, TDA, DOD, USEXIM, etc.) (insert a dropdown box with choices)

____ Referred by financial or legal advisor (Name of advisor ______________)

____ Referred by portfolio facility manager (Name of facility manager___________________)

____ Past or present DFC client. (Name of client _______________________)

____ Other (describe: ______)

QUESTION 10: may we share your information with other dfis?

Yes

No

May DFC share the following information with other development finance institutions (DFIs) who may be interested in working with DFC on the in the type of project/transaction you are proposing?

• The Investee Name and Location from Question 2;

• The Representative Name, Title, and E-mail address from Question 3;

• The DFC-designated sectoral category (i.e. financial services, power generation) that corresponds with the nature of your project/transaction.

Please note that this is not a guarantee that DFC will share the information nor a guarantee that recipients of the information will provide additional support to the transaction.

SUBMISSION/SIGNATURE Page

Select DFC Origination Officer

Please select a recipient to receive your application materials. If you are already working with a DFC origination officer, please select their name from the menu below. If not, please select “Officer not assigned” and your application will be forwarded to a DFC officer who reviews incoming applications.

Officer Name: (drop-down list)

I certify that the statements and information provided herein are true to and correct to the best of my knowledge and belief.

Name:

Title/Role in Transaction:

Email Address:

[SIGN and SUBMIT BUTTON]

Note: Some of the questions in the form require the attachment of specific documents. In addition, at the bottom of every page of the electronic form, there is a link that will allow the applicant to attach additional supporting documentation as necessary. A list of the essential supporting documentation requested by DFC is as follows:

SUPPORTING DOCUMENTATION

1. Complete Business Plan/Preliminary Information Memorandum

Since DFC supports a variety of transaction structures in many different sectors/industries and countries, it is not possible to provide a standard business plan template. The following checklist details the items that applicants should consider as they prepare their business plans. Please provide as complete a business plan as possible.

Investment/Transaction Summary

• Investment/Transaction Description/Status Describe the purpose for which the DFC loan/equity/guaranty is to be used and any development activities completed to date -- investment made to date, market or feasibility studies performed, status of documentation/permits/government consents, environmental studies, past and ongoing consultations with project-affected communities (including disadvantaged and vulnerable groups), etc.

• Financial Plan and Credit Support Describe the proposed DFC and other lender debt -- loan amount, tenor, grace period -- and source, timing and amount of DFC or other equity contributions, grants or other funding; describe any proposed collateral and other credit support

Key Parties

• Owners/Shareholders, Guarantors, Management, Contractors, Regulators -- Provide detailed information on the key parties associated with the transaction, fully explain their role(s), and explain the relationships among them. If certain characteristics (e.g. a strong credit rating) or capabilities/experience (e.g. a strong track record in a given market or industry) are important to that party being considered a good candidate to fulfill their role in the transaction, please highlight that information.

Sector/Target Market/Economics

• Sector/Industry Describe the competitive environment in which the investment is being made and any recent or emerging trends that may affect its success.

• Product/Services Describe the ultimate products or services that this investment will produce, in what quantity, and whether for the local market or for export (and if for export, to which countries)

• Economic/Technical Specifications If relevant, provide economic assumptions, technical parameters, construction plans/schedule, equipment/land to be procured, off-take arrangements, etc.

• Agreements List any key contractual arrangements necessary to the success of the investment such as concession or franchise/royalty agreement(s), construction contract(s), offtake agreement(s), environmental impact studies, feasibility studies, marketing studies, technical assistance agreement(s), management services agreement(s), lease(s), etc. (and attach electronically if available)

Legal, Economic, Political Environment and Government Participation

• Licenses/Permits List all licenses, permits, consents, approvals, environmental requirements etc. required by the country/local government and the status of such documentation.

• Legal Regime List local laws, regulations or pending reforms that will impact the investment or the sector.

• Economic/Political Climate Describe relevant economic and political factors in the country/region where the investment is located.

• Government/Multilateral Participation Describe any government or multilateral involvement in the investment or the sector and any government incentives such as tax holidays.

• Litigation or Dispute Resolution Describe any litigation or community dispute or complaint resolution processes that have occurred or are occurring involving any of the key parties that could affect this investment.

Transaction Strengths/Risks and Risk Mitigation

• Strengths Describe those factors that contribute to the long-term viability of the investment/transaction.

• Risks Describe risks such as credit risks, sector/market risks and competition, operational and management risks, political/economic risks, legal/regulatory risks and environmental, social and human rights risks and what steps the Investee Party will take to mitigate such risks and provide access to accountability and remedy for negative project impacts on individuals and communities.

2. Financial Projections Model

The financial projections model should cover at least the entire proposed term of the DFC loan/guaranty or expected holding period of DFC equity. It should include detailed, financially-justifiable assumptions on all key drivers of the proposed transaction and should clearly demonstrate how funds provided or guaranteed by DFC will be repaid or recouped successfully. The model should also include financial statements (i.e., balance sheet, income statement, cash flow statement) and ratios or other financial measurements relevant to the industry/transaction type being modeled. In addition, the model should be structured in such a way as to make it simple to adjust key assumptions and thereby analyze potential financial performance under adverse conditions.

If the applicant does not already have a financial projections model that meets these criteria, DFC has provided a template (link to model template and user guides) that may assist some applicants in creating a model. Please note that this template is not designed to model financial institutions or other entities with lending or leasing portfolios.

3. Historical Financial Statements

Evaluating the financial strength of parties upon which the transaction will depend (primary investors, guarantors, key contractors or off-takers) is an important part of DFC’s evaluation. For each such party, please provide financial statements, preferably prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) or International Financial Reporting Standards (“IFRS”). Financial Statements must be prepared in English or accompanied by a certified English translation. Listed below are the types of financial statements that should be submitted for each type of entity:

For a public corporation: - 10K or equivalent (most recent 3 years)

- 10Q or equivalent (most recent quarter)

For a private corporation: - Annual Financial Statement (preferably audited; most recent 3 years)

- Quarterly Financial Statement (most recent quarter)

- Tax Return (most recent 3 years)

For a partnership: - Annual Financial Statement (preferably audited; most recent 3 years)

- General Partner information, including (i) current signed Statement of Net Worth (assets, liabilities, net worth) and (ii) ownership

For an individual: - Current Signed Personal Financial Statement (assets, liabilities, net worth) – provide link to DFC-005 (fillable PDF)

- Tax Return (most recent 3 years)

1 An in-kind contribution could be a hard asset such as a building, land or equipment. In order for DFC to credit it as an equity contribution, it must be titled to the Borrower, and DFC must receive reasonable documentation of its market value (e.g. a recent appraisal, sales invoice, etc.)