NAIROBI, Kenya — Absa Bank Kenya and Vivo Energy Kenya have entered into a financing partnership that will provide Shell service station dealers and investors with long-term funding to expand the fuel retail network across the country.
The partnership is designed to address one of the major capital requirements facing fuel station operators: the substantial upfront costs involved in securing land and developing new service stations.
Under the arrangement, eligible Vivo Energy Kenya dealers will be able to access financing for advance rent payments to landowners and construction of additional service station sites. This is expected to allow dealers to secure strategic locations while retaining working capital for day-to-day operations and future investments.
The financing will be structured through a tripartite agreement between Absa Bank, Vivo Energy Kenya and the investor, with repayment linked to margins generated from petroleum product sales.
Absa Bank Kenya Business Banking Director Renato D’souza said the financing model was developed in response to the capital requirements associated with expanding fuel retail businesses.
The partnership comes as Vivo Energy continues to expand its Shell-branded retail footprint in Kenya. The company currently operates approximately 350 service stations across the country.
Vivo Energy Kenya Managing Director Peter Murungi said bringing Absa on board as a financial partner would give dealers and investors easier access to capital for business development and expansion as the company pursues its growth agenda.
For dealers, the financing model could ease the pressure created by large upfront lease and construction expenses, allowing more capital to remain available for fuel purchases, staffing and other operating requirements.
The companies, however, have not publicly disclosed the total value of the financing facility, the number of dealers expected to benefit or specific loan pricing and repayment periods.
The partnership is expected to support the development of additional Shell service stations while strengthening the network of independent dealers operating under the Vivo Energy Kenya network.
