Atyrau Oil & Gas
Chevron Direct Investment Fund Ltd.: Investments into the Future of Kazakhstan
At the beginning of the year Chevron Direct Investment Fund Ltd. (CDIF) has announced investment agreements into two Kazakhstani companies. After extensive work CDIF made direct equity investments in 2023 of up to $41MM (USD) into Top Cleaning Kazakhstan LLP (top.kz), a managed service marketplace for the business, and Orhun Med Ltd, a growing healthcare company in Kazakhstan. The companies are planning to expand their businesses using CDIF’s investments, creating jobs across Kazakhstan and bringing necessary technologies into the country. Damon Thornburg, General Manager, Finance, Chevron Eurasia Business Unit – CEO, Chevron Direct Investment Fund Ltd. gave an exclusive interview to Petroleum about the intent of CDIF, projects’ selection criteria and terms and conditions of collaboration.
– Damon, you made a decision to invest up to $41 MM into first two local companies. What is the budget of CDIF and are there any limits for investments into one company?
– CDIF was set up with $248.5 MM to be deployed into local profitable enterprises, to help them expand, improve, bring, or transfer new technologies, digitalize, develop human capital, and become more sustainable.
I would like to emphasize that CDIF does not limit the number of projects and the amount of investments into a single company but is based on applications submitted to the website www.cdif.kz.
Damon Thornburg is General Manager, Finance, of Chevron’s Eurasia Business Unit and CEO of Chevron Direct Investment Fund Ltd. He is based in Almaty, Kazakhstan, a position effective since February 2021.
Previously Damon served as the General Manager for Enterprise Finance at Chevron Downstream & Chemicals, a position based in San Ramon, California, that he assumed in 2017. While at this position, he was also a member of the Global Downstream & Chemicals Finance Leadership team.
Damon joined the company in 2001 and he held a number of positions of increasing scope and responsibility at Chevron Corporation, including Manager of Corporate Forecasts & Reporting; Country Finance Manager for Thailand, Myanmar, Cambodia, and Vietnam; Finance General Manager for Greater China based in Hong Kong; and multiple other positions based in the United States.
– Could you please elaborate on when and how the decision to establish CDIF was made?
– Main preparations were done in 2021, when Chevron had negotiations with the Ministry of Energy of the Republic of Kazakhstan, searching and hiring of Investment Advisor, developed and launched the website for receiving applications.
On October 11, 2021, the Ministry of Energy of the Republic of Kazakhstan and Chevron signed a Memorandum of Understanding (MoU) to secure the Ministry’s support of Chevron’s intent to establish Chevron Direct Investment Fund Ltd. CDIF is Chevron’s investment vehicle to support Kazakhstan’s economy by investing into commercial local enterprises.
– Who can file an application: are there any restrictions of a company’s legal structure or industry, etc.?
– Any company that meets selection criteria can submit an application. CDIF will review applications from the companies who work in Kazakhstan or have evidence that they are local in nature. CDiF is industry agnostic considering portfolio diversification.
– What are eligibility criteria? What is the selection process and how transparent is it?
– The project selection criteria include strong profitability, robust ESG characteristics, financial and non-financial risks, value creation potential and portfolio diversification.
Website provides application requirements and project eligibility criteria, as well as step-by-step instruction of how the project companies can apply for funding online and see the status of their applications. The key purpose of the website is to ensure transparent selection process and accessibility to those who are interested in applying for funding investment projects in Kazakhstan.
Before review by CDIF Investment Committee all projects shall be approved by Advisory Board which includes representatives of the Ministry of Energy and Chevron.
– Can technology start-ups apply for funding?
– CDIF will be investing into commercial local enterprises across various industries, including but not limited to manufacturing, works and services in the oil and gas industry, technology, and digital, and environmental stewardship. Existing businesses should have a track record of positive financial performance.
All projects – greenfield and expansion of existing businesses, should have forecast attractive economics and solid assumptions to back up the forecast. Although CDIF is not pure venture fund, CDIF may consider and review start-ups at the product commercialization stage, i.e. when there is a prototype with demonstrated records in the market.
– Did I get it right that CDIF will invest by contributing to equity of a local company? What happens next to CDIF share: will you sell it? If yes, whom and when: to the other party or in a market?
– Yes, you are right, CDIF makes investments by contributing to a company’s equity. In line with the life of CDIF, the intention will be to exit investments within 8-10 years following its launch.
Terms and conditions of a deal are discussed with each company separately depending on their business model: that is, duration and terms and conditions of the partnership between CDIF and an investee are based on the project specifics.
– Thank you very much for detailed answers and we wish all the success to CDIF!