IFC to finance post-secondary education to lower-income students in Brazil
Washington D.C., July 27, 2006—The International Finance Corporation, the private sector arm of the World Bank Group, will help finance the expansion of a post-secondary educational institution, Anhaguera Educacional (AES) that provides good quality, affordable education to lower-income students who live outside Brazil’s major urban centers. IFC will do this by providing a $12 million loan to Fundo de Educação para o Brasil – Fundo de Investimento em Participações (FEBR).
Atul Mehta, IFC Director for Latin America and the Caribbean, said, “For Brazil’s large and young population, providing good quality education to lower-income students is essential for ensuring sustainable growth and reducing inequality. IFC is proud to partner with AES as it continues its expansion to bring affordable education to future generations.”
Anhanguera Educacional is a for-profit, rapidly expanding education institution in Brazil, focusing on lower-income students in the smaller cities of São Paulo state. AES currently operates ten campuses in eight cities, offering undergraduate and graduate degrees to over 20,000 students.
FEBR is the first private equity fund of its kind in Brazil focusing solely on education. The fund, which is listed on the São Paulo Stock Exchange, was structured and is managed by Pátria Banco de Negócios Ltda. and its affiliated companies. Pátria is one of the most successful private equity and investment banking institutions in Brazil with over 20 years experience in the local market.
“AES combines the vision and characteristics that are associated with success as IFC has learned through its years of investing in the private post-secondary sector around the globe,” noted Guy Ellena, IFC Director for Health and Education. “Through our investment in FEBR, we aim at establishing a long-lasting partnership with Pátria and AES that will have a significant impact on Brazil’s education market. We believe that IFC’s global experience in the sector will be of value to AES and its sponsors.”
Alexandre Saigh, Managing Partner, FEBR, added, “Education is one of the most important necessities for ensuring sustainable growth and reducing poverty in future generations. AES has played a key role in providing high quality education in Sao Paulo state and FEBR is pleased to have the opportunity to assist in its further development.”
From the beginning, AES and its predecessor companies have stayed true to the vision of its founders to provide good quality, affordable education to lower-income students who live outside Brazil’s major urban centers. Since 1994, when professors Jose Luis Poli and Antonio Carbonari Netto founded their first independent campus in the city of Leme in Sao Paulo state, AES has opened ten campuses serving more than 20,000 students.
In 2005, FEBR acquired a controlling stake in AES with Professor Carbonari as AES’s CEO and Professor Poli as the academic director. AES’s business model, based on a structured curriculum, a decentralized network of campuses, and standardized delivery, allows the company to offer consistent and low-cost curriculum delivery to its students.
Pátria has been instrumental in AES’s recent expansion and in developing the company’s future growth strategy. It has also brought management experience and financial discipline to day-to-day operations. Following major regulatory reforms in the mid-1990s that provided incentives to the private sector to invest in higher education, Pátria is confident that FEBR—through its investment in AES—can benefit from significant opportunities in Brazil’s education market.
IFC in Brazil
During fiscal year 2005, Brazil received the largest amount of IFC financing, in dollar value, among Latin American countries. IFC invested $591million, including $190 million in syndications, in sectors ranging from agribusiness and transportation to manufacturing and the financial sector. IFC’s total portfolio in Brazil was $913 million at June 2005.
IFC’s strategy for Brazil focuses on enhancing clients’ prospects for competitiveness and growth, improving the country’s social equity through voluntary actions by the private sector, and continuing to promote sustainability. Since 1956, when Brazil joined IFC, the Corporation has provided $7.45 billion, including syndications, for 162 companies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit www.ifc.org.
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