Absa to fund new Shell service station in Vivo Energy deal
Vivo Energy Kenya Managing Director Peter Murungi said the partnership would support dealers and investors looking to expand their businesses under the Shell brand.
NAIROBI, Kenya, September 18 - Absa Bank Kenya and Vivo Energy Kenya have formed a partnership to offer long-term financing to Shell service station dealers and investors looking to expand their retail networks. This financing will cover advance rent payments for land and the construction of new service stations, enabling dealers to conserve working capital for their daily operations.
Peter Murungi, the Managing Director of Vivo Energy Kenya, stated that the collaboration aims to assist dealers and investors in growing 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 explained. Vivo Energy currently manages around 350 service stations in Kenya.
Renato D’Souza, Director of Business Banking at Absa Bank Kenya, revealed that the bank created the financing model following talks with Vivo Energy about the expenses associated with expanding its retail network. The funding will be granted through a tripartite agreement involving Absa, Vivo Energy, and the investor. The repayment will be determined by the margins generated from sales of petroleum products.
"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 concluded.
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