NAIROBI, Kenya, Sept 18 – Absa Bank Kenya and Vivo Energy Kenya have partnered to provide long-term financing to Shell service station dealers and investors seeking to expand the retail network.
The financing will cover advance rent payments for land and construction of new service stations, allowing dealers to preserve working capital for day-to-day operations.
Vivo Energy Kenya Managing Director Peter Murungi said the partnership would support dealers and investors looking to expand their businesses under the Shell brand.
“As Vivo Energy, we’ve been moving forward with the growth agenda in this country and pushing the Shell brand and the Shell product,” Murungi said.
Vivo Energy operates about 350 service stations in Kenya.
Absa Bank Kenya Director of Business Banking Renato D’Souza said the bank developed the financing model after discussions with Vivo Energy on the cost of expanding its retail network.
The funding will be provided through a tripartite agreement between Absa, Vivo Energy and the investor. Repayment will be linked to margins generated from petroleum product sales.
“One of the biggest challenges for these retailers is developing the retail stations. So what we have done as Absa is to provide long-term funding,” D’Souza said.
