Investment strategy for a Private company seeking to invest in an EMDE country.

1. INVESTMENT STRATEGY FOR XYZ
LIMITED (PRIVATE DIRECT
INVESTOR)
Presented to: Board
of Directors
July 3, 2019

2. ABOUT XYZ LIMITED
• Renewable Energy company with a focus on constructing and
operating renewable power plants in the Middle East.
• We realized that there is abundance of sunlight in certain Sub-
Saharan African countries which can be used to generate power for
communities.
• However, there is limited local capital to set up such cost-intensive
and long term investment.

3. CURRENT INVESTMENT TRENDS, OUR
CAPABILITIES AND INVESTMENT CONVICTIONS
• There has been a global shift away from fossil fuels to renewable energy
and this has driven investment towards renewable power generation
projects.
• With our recent expansion into North Africa through entry into Public
Private Partnerships with State Governments, we have been able to
increase access to electricity in Country Y from 60% to 70%.
• In line with our stakeholders’ expectations of sustainable impact
investment with long term returns, we intend to replicate this outcome
by venturing into the West African market, having delivered sustainable
impact in the Middle East and West African (MENA) region.

4. Table of Content
• Investment Model
• Proposed country of investment
• Proposed Investment Sector and plan
• Reason for choosing model, country and sector
• Applicability of Investment to SDGs
• Expected obstacles/Proposed mitigation strategy
• Application of Impact/ESG Investment Principles to the investment.

5. Table of Content Contd.
• Expected obstacles/Proposed mitigation strategy
• Application of Impact/ESG Investment Principles to the investment.
• Anticipated outcome/Conclusion

6. INVESTMENT MODEL
• We propose a Greenfield Direct Investment model.
• We plan to incorporate a Private Limited company for the purpose of
effecting this investment.
• The intent is to set up a Public Private Partnership with the Federal
Government by which the company provides the initial set up costs
of the project with profits paid by the government over a 20 year
period.

7. PROPOSED COUNTRY OF INVESTMENT
• We intend to set up our investment in Nigeria.
• Being the most populous nation in West Africa with a population of
about 180 million people, we believe that our investment will have
the most impact here.

8. INVESTMENT SECTOR
/PLAN
• The targeted sector of our greenfield
investment is the Power Sector.
• Through our FDI, we plan to construct Solar
Power plants to generate electricity for
rural areas and areas not connected to the
national grid.

9. REASONS FOR CHOOSING MODEL, COUNTRY
AND SECTOR
• A greenfield investment model provides an opportunity for long term
returns while ensuring sustainable impact.
• Nigeria has about 20 million citizens without access to electricity. The
national grid is overloaded and does not have the capacity to
transmit all the electricity produced by power plants powered by
fossil fuels.
• A Solar power plant will not require connection to the national grid
and can provide a viable source of off-grid electricity to rural areas.
• Nigeria has an abundance of sunlight to power the solar power plant.

10. APPLICABILITY OF INVESTMENT TO
SUSTAINABLE DEVELOPMENT GOALS
• SDG 7 aims to achieve affordable and clean energy.
• Nigeria currently heavily relies on fossils fuels in its
power generation mix as most of its power generation
plants are gas fired.
• Investing in a solar powered plant ensures that the
country can access electricity that is not only clean,
but affordable in the long term as there is an
abundance of sunlight in Nigeria.

11. EXPECTED OBSTACLES/MITIGATION STRATEGY
A. i. Breach of Contract
• The company will execute a Power Purchase Agreement with the
government under which the government will guarantee to buy the
power that will be generated from the solar power plant.
• There is a risk of non fulfilment of contractual terms and obligation
by the Government
ii. Mitigation
• Obtain MIGA breach of contract cover as it provides protection
against losses arising from a government's breach or repudiation of a
contract with an investor. As a power purchase agreement in a PPP is
a contract between the government and an investor, it can be
insured.

12. EXPECTED OBSTACLES/MITIGATION STRATEGY
Contd
B. i. War or political disturbance
• As power projects such as this are often long term (at least 20 years),
in countries where democracy is still a growing concept such as
Nigeria, there is always the risk of political disturbance that can
affect investors’ ability to obtain the benefits of their investment.
ii. Mitigation
• In order to mitigate this risk, we plan to obtain MIGA’s war, terrorism
and civil disturbance as this cover provides protection against losses,
damage, or the destruction or disappearance of the project's tangible
assets caused by politically motivated acts of war or civil disturbance
in the country including a revolution, insurrection, coup d'etat,
sabotage or terrorism .

13. APPLICATION OF IMPACT/ESG INVESTMENT
PRINCIPLES TO THE INVESTMENT
• We plan to generate positive returns on our
investment, while ensuring that the investment has a
long term impact on the society and the
environment.
• 20 million Nigerians do not have access to electricity.
By investing in clean energy, we are improving the
quality of life of the individuals in the society in
which we are investing in.
• Our shareholders and stakeholders will only back
sustainable investment ideas and that is why we have
chosen this model and project.

14. ANTICIPATED OUTCOME/CONCLUSION
•Long term returns for our shareholders from the
profits obtained from the sale of power upon
completion of the project.
•Substantial reduction in the number of Nigerians
without access to electricity.
•Increased confidence from our stakeholders as the
project will reinforce our commitment to
compliance with sustainable investment principles.

15. Thank you for listening!