IFC, a member of the World Bank Group, will provide US$35mn as part of a US$200mn credit facility arranged by Societe Generale to enable Addax Energy SA to deliver critical energy imports to Mauritania, supporting jobs and economic activity in major sectors.
For the next six months, the facility will help Mauritania secure vital imports of petroleum products to keep its economy moving in the face of the challenges of the supply chain caused by the COVID-19 pandemic. A country in the Sahel region, Mauritania is heavily dependent on imported petroleum.
IFC’s investment is part of its global COVID-19 fast-track funding support package, designed to help client firms — and the thousands of smaller firms that they support — weather COVID-19-related disruptions. The funding underlines the strategy of the World Bank Group to expand support for the Sahel region, which has been severely hit by COVID-19 disruptions and faces security challenges.
Stephen Paris, Addax Energy SA chief financial officer, said, “Addax Energy S.A., has been, for more than 30 years, one of the longest-established and a reliable supplier of petroleum products and energy in Africa. We are extremely proud to have been selected for the third time in a row as the key supplier of petroleum products to Mauritania. We are also greatly appreciative of our partnering banks, and IFC’s renewed trust and support especially in these times of oil market volatility and COVID-19 pandemic challenges.”
The credit facility will finance the purchase, transportation, storage, and sales of petroleum products, ensuring a steady supply of energy for the transportation, agriculture, fisheries, mining and other critical sectors of Mauritania, helping businesses across the economy maintain operations and jobs.
Aliou Maiga, IFC director for West and Central Africa, said, “The facility is critical for Mauritania’s economy and will help mitigate some of COVID-19’s negative economic impacts by safeguarding the continuous flow of energy in the country and avoiding a major disruption in the supply chain. Supporting the private sector during these difficult times will help ensure economic stability and preserve jobs.”
The economic and social impacts of the pandemic are expected to be significant in Mauritania, with the IMF predicting that the country will fall into recession by 2020. COVID-19 contracted exports from Mauritania, endangering employment and investment. Disruptions in the supply chain are expected, making it crucial to ensure the continued supply of goods, particularly imported refined oil products, on which Mauritania depends.
The investment announced builds upon a US$255mn, two-year loan facility committed by IFC, Societe Generale and three other financial institutions in May 2018.
Source: Oil Review Africa