Bp Southern Africa (bpSA) announced that it has entered into a co-operation agreement with the Small Enterprise Finance Agency (Sefa) aimed at providing finance to empower black-owned businesses to acquire and operate service stations and related forecourt retail businesses.
According to bpSA, the total value of the agreement is just more than R58 million, comprising of an initial R18m investment and a further R40m that Sefa will receive from the proceeds of all annual loan recoveries ceded to the bp/Sefa fund from a previous ESD Fund.
“The investment will be used by Sefa to finance 50% of the capital needed by approved businesses, to acquire and develop service station properties,” it said.
BpSA and Sefa will jointly approve the beneficiary businesses.
Bp Southern Africa CEO Taelo Mojapelo said: “As part of our transformation journey and strengthening our convenience portfolio, building strong partnerships is key in ensuring the successful delivery of our business objectives, which are underpinned by a customer-centric strategy.
“As part of our retail transformation agenda, we aim to have 70% of our service stations operated by black dealers by 2025. To put that in context, bpSA currently has over 500 branded retail stations throughout the country, a number that is set to grow in the next year.”
BpSA said the agreement was set to run for five years, and bpSA would contribute to the fund annually to ensure its growth and future impact.
Both parties have agreed that it may be renewed.
“Service station forecourts have become retail hubs that deliver a service to surrounding communities as well as motorists and present a range of opportunities to business owners. BpSA is looking to redefine convenience in key focus markets to offer customers what they need, where and when they need it,” said Mojapelo.
Sefa CEO Mxolisi Matshamba said helping black-owned businesses enter this sector was a huge opportunity to create sustainable enterprises that provide employment opportunities. Access to capital is one of the main barriers to building a thriving entrepreneurial business community, and they are proud to be working with BP to open up the energy sector to more black players.
“The fuel industry in South Africa remains one of strategic importance in ensuring sustainable economic growth. With the imminent recovery of the economy, the industry has a larger role to play.
“The strategic importance of the sector may not be fully beneficial if it is not intended to stimulate increased growth and economic transformation, and access to resources by women, youth, and persons with disabilities,” he said.
Matshamba said to this effect, the government had created enabling platforms through the introduction of legislation, policy mandates and regulations.
“Access to finance, market, lack of skills, and non-financial support have remained challenges to achieving sustainable transformation in this sector. In this regard, the Sefa-bpSA agreement is a deliberate public-private partnership in promoting and advancing transformation in this industry.”
Interested parties were advised to apply for funding via Sefa, which would be responsible for managing the loan process, and providing support and oversight to successful retailers.
Fuel Retailers Association (FRA) CEO Reggie Sibiya said yesterday, “he issue of appropriate funding for running a service station is very critical and needs a partnership. The advantage of the partnership between bpSA and the funder is that is already a support structure from the oil company as well as the funder to ensure success. bpSA provides operational management support and are also aware of funder requirements.
“The funder hopefully provides the necessary financial management tools. This partnership arrangement is in line with the transformation goals of providing support and mentoring alongside financial provision,” he said
Sibiya said FRA welcomed the initiative and wished bpSA and Sefa success.
BUSINESS REPORT