Library / MDGIF Investment Policy Statement

MDGIF Investment Policy Statement

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: