- The Fund may pursue investment opportunities directly by itself, or through a selected manager. Given its long-term investment horizon, the Fund may maintain the dual objective of realizing a commercial return and investing in infrastructure, which might otherwise not be financed and developed due to lack of budgetary funds.
- All of the Fund’s investment decisions shall be taken having regard to the impact of such investments on the environment, compliance with local laws, adherence to the environmental, social, health and safety guidelines. The Fund shall include in its due diligence for each investment, analysis of the social and ecological impacts to the environment. In doing this, the Fund will examine the methods and processes used by the applicant to assess and mitigate any material negative impacts. Should the analysis show any unacceptable negative impact that cannot be addressed within a reasonable time, the applicant may be deemed inappropriate for investment by the Fund.
- The Fund shall have an asset allocation policy which ensures that the Fund is not unduly exposed to any one particular infrastructure sector, project or asset manager, while taking into account its investment objective, risk tolerance and liquidity requirements.In particular, the following shall be observed:
- The Fund will avoid concentration risk, however, investments that it makes in projects should be such that it maintains some influence, if not a controlling interest in the project. The Fund shall not commit more that 10% of its total assets to any one particular project. The Fund shall also not deploy more than a specified percent determined from time to time by the Board of its total assets to any one particular asset manager.
- The Fund shall also strive to diversify its portfolio of investments in the infrastructure without deviating from the priority sectors from time to time approved by the Board. In this regard, the Fund shall not commit more than 25% of its total assets in any one particular infrastructure sector in Ghana. It is recognized that in the early years of the Fund’s operations, these ceilings might be breached as it will take time for the Fund to reach the desired level of diversification. However, it is expected that the ceilings will be fully achieved within the first five (5) years of commencement.
- Profits and proceeds from the Fund’s investments shall be reinvested into new or existing assets or projects of the Fund to generate further returns.
It is the Fund’s objective to invest in a diversified portfolio of infrastructure projects in Ghana, earn competitive returns on its investment and preserve it long-term capital. For this reason, a return target should be set to provide a real rate or return that will preserve the capital of the Fund. The Fund will therefore target a US dollar annual real return of 5%. This will be computed by subtracting U.S. inflation CPI as measured by the U.S. Bureau of Labor Statistics from the nominal dollar return. This return target will exclude Impact Projects (as defined below), uncommitted funds and unfunded commitments.
In recognition of the long-term nature of infrastructure projects, the Fund will invest for the long term, which is an investment horizon of 10 to 25 years. The Fund will generally lend where applicable with a minimum tenor of at least five years.
For Accounting and Reporting purposes, fund reports and accounts will be produced in both Ghana Cedis and U.S. dollars.
- The Board shall, in consultation with the Minister, issue an Investment Policy statement in pursuance of the object of the Fund.
- The Fund may develop, adopt and as appropriate from time to time amend, revoke or supplement appropriate codes of practice, regulations, internal guidelines or procedures consistent with this Act, and in furtherance of the object of the Fund.
- The Board shall publish the Investment Policy Statement in the Gazette and in at least one national daily newspaper.
- Where the Board amends or revokes the Investment Policy Statement or part thereof, it shall publish the amendment or revocation in the Gazette and in at least one national daily newspaper.
- Notwithstanding the general framework set out above for the IPS, the Board shall in preparing or amending the IPS be guided by the need for the IPS to be used as a tool to:
- Identify the investment objectives, risk tolerance as well as constraints of the Fund;
- Serve as the framework for management of the Fund.
- Create a set of guidelines and policies within which executive management can exercise and execute its mandate.
The Fund may invest in:
- Commercially viable infrastructure or infrastructure-related projects.
- Investments that have received (or will receive prior to disbursement) the relevant approvals, permits, licenses and concessions from the relevant government agency.
- Going concerns that require finance for upgrades, expansions or other forms of growth.
- Partnerships in infrastructure projects through strategic investment vehicles such as special purpose vehicles, joint venture or public-private partnership arrangements.