IFC, a member of the World Bank Group, today announced that it will participate up to $150 million in a $450 million trade finance facility arranged by Natixis to finance Ethiopia's import of refined petroleum products. The facility will support the supply of critical energy products in Ethiopia; powering the country's economic growth.
Under the agreement signed today, IFC, Natixis, Standard Bank and other lenders will help finance Independent Petroleum Group's import of petroleum products into Ethiopia over one year. The Group maintains a strong relationship with Ethiopia Petroleum Service Enterprise, being one of the main suppliers of petroleum products to the country for the last four years.
Independent Petroleum Group recently secured the 2014 annual tender to supply over half of Ethiopia's imports of refined petroleum products.
The second-most populous country in sub Saharan Africa; Ethiopia imports all of its petroleum products, which are critical for transportation, industrial and household uses.
"Natixis has a longstanding experience with Ethiopia for over 30 years", said Felipe Lopez Cruz, Natixis Regional Head of Global Energy and Commodities Dubai branch. "Our expertise in commodities, our presence in the Middle East, as well as the partnership with IFC and Standard Bank has allowed Natixis to finance Ethiopian oil imports successfully. We are proud
of this achievement given the strategic nature of this flow to Ethiopia and to our client, Independent Petroleum Group".
"The established facility will provide flexibility and support to the
Ethiopian Petroleum Supplier Enterprise by extending the credit period for importing petroleum products and introducing new financial institutions and banks to the country", said Abdullah Al-Khandari, the Chief Financial Officer of IPG.
Ethiopia's economy has experienced strong growth over the past decade, reaching 7% in 2013. Still, almost 30% of the country's population continues to live below the poverty line of $1.25 per day. A landlocked country; Ethiopia relies on road transport to move critical goods such as construction materials and agricultural commodities. Imports of petroleum products are thus crucial for several key sectors of the economy.
Oumar Seydi, IFC Director for East and Southern Africa said, "Ethiopia depends on imported petroleum products to meet its infrastructure, agriculture and energy needs. IFC is committed to encouraging trade that supports economic growth and job creation in Ethiopia."
IFC's strategy in Ethiopia involves working closely with the private sector to support infrastructure, agriculture and entrepreneurs.
SOURCE International Finance Corporation (IFC)