Library / Applicable to: MDGIF Project Promoters Equity Partners MDGIF INVESTMENT POLICY STATEMENT (MIPS) Code: MDGIF Guide 1001 - 2024
Applicable to: MDGIF Project Promoters Equity Partners MDGIF INVESTMENT POLICY STATEMENT (MIPS) Code: MDGIF Guide 1001 - 2024
Page 17 of 34
Applicable to: MDGIF Project Promoters Equity Partners MDGIF INVESTMENT POLICY STATEMENT (MIPS) Code: MDGIF Guide 1001 - 2024 Effective Date: 17th May 2024 This document is a property of the Midstream and Downstream Gas Infrastructure Fund. All rights reserved. 17 b. In line with the above, the investment horizon of the Fund is defined as medium to long- term. Specifically, the Fund shall seek to structure its investments as follows: i. Short-term investments: This will apply to the Fund’s investments of its idle funds in interest bearing accounts, treasury and other liquid instruments to optimise portfolio returns. ii. Medium-term investments: This will apply to the categories of equity investments in projects with a short gestation period and an investment structure that is suited for a quick exit by the Fund. This investment horizon is estimated at 3-7 years and the Fund will seek to exit such investments within the estimated timeline. iii. Long-term investments: This will apply to equity investments made by the Fund where participation is for over 7 years into perpetuity, subject to an exit event by the Fund regarding to its equity holding in the project or entity. This investment horizon is estimated at over 7-20 years, into perpetuity. The Fund may explore exit strategies or choose to remain a participating shareholder in this category of projects. For the avoidance of doubt, notwithstanding the long-term nature of such investments, they shall remain subject, at all times, to the MDGIF’s right and election (at its discretion) to exit at any time. 3.10.2 MDGIF Exit Strategies a. Pursuant to the Act, “The purpose of the Fund shall be to make equity investments of Government owned participating or shareholder interests in infrastructure related to midstream and downstream gas operations…” i. Accordingly, the MDGIF will invest in viable projects that align with its mandate pursuant to the Act as a minority equity investor without emphasis on potential for exits as a criteria for investment decision making. ii. However, the Fund will be guided by its classification of each potential investment proposal vis-à-vis the investment horizon provisions of this MIPS. The Fund shall design appropriate strategies in the transaction structure for each investment. b. Where it is appropriate for the Fund to consider an exit strategy, the appropriate strategy will differ for each investment and will reflect the Fund’s position as a minority equity investor. The options may include:
MDGIFPDF20242024-0517