bp Southern Africa (bpSA) 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.
The total value of the agreement is just over R58m, 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. bpSA and sefa will jointly approve the beneficiary businesses.
The agreement is set to run for five years, and bpSA will contribute to the fund annually to ensure its growth and future impact. Both parties have agreed that it may be renewed.
The global forecourt retail market was said to be worth $190.6 billion in 2019 with a predicted compound annual growth rate of 3.6%, higher in emerging markets, according to KPMG. It is also worth noting that in South Africa the forecourt retail business alone is worth an estimated R40bn a year, representing an opportunity for emerging dealers.
Further and according to the study conducted by SAPIA in 2019, despite being pre-Covid, the oil industry accounted for 3.2% of the country’s Gross Domestic Product and created 250 000 jobs, representing 1,5% of total employment levels in South Africa.
Interested parties are advised to apply for funding via sefa, which will be responsible for managing the loan process, and providing support and oversight to successful retailers.