We have enough money to fund oil investments - Absa

A section with ATMs at an Absa bank branch. PHOTO/FILE/COURTESY

Summary

• The bank also noted it was ready to build partnerships with insurance companies to provide services that will arise in the sector given its capital intensive and risky nature. 

By MARTIN LUTHER OKETCH

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Absa has told investors in the gas and oil sector that it has resources to finance oil activities. The money, the bank said, is available and has no cap on how much one can access, noting applications will be assessed on a case-by-case basis. 

The bank also noted it was ready to build partnerships with insurance companies to provide services that will arise in the sector given its capital intensive and risky nature. 

Globally, oil experts say investing in the oil and gas carries a number of significant risks, among which include price volatility and oil spills or related accidents. 

Speaking the during the just concluded 7th Annual Oil and Gas Convention, Mr David Mparuta, the Absa head of enterprise and suppliers’ chain development, corporate and investment banking, said the bank is ready to provide financial support to investors in the oil and gas sector. 

During his presentation Mparuta said Absa had within the Group built capacity to fund oil and gas projects noting that the bank had recently funded a $12m project through a single transaction for a local contractor in the oil and gas value chain in a market he did not mention. 

“There is no cap on the financing available for Uganda – each transaction and contract will be assessed individually,” he said, noting they will seek partnerships with insurance companies to ensure that assets are fully covered in the event of loss, damage and significant downtime. 

Special purpose vehicle
The bank, he said, had created a special purpose vehicle - Enterprise & Supply Chain Development – through which local enterprises will be supported right from small purchase orders or large capital equipment. 

“We have a unique credit standard to support this business as well as dedicated resources both in Uganda and South Africa to ensure the success of this programme,” Mparuta said.  

During the same meeting, Mr Ronnie Musoke, the Insurance Consortium of Oil & Gas Uganda fund manager, said they had formed a consortium that will handle any risks that qualify for insurance services.