Dubai-based BB Energy has received a two-year US$400mn syndicated trade finance facility to fund the delivery and inventory of oil products to Mauritania.
This is the first syndicated trade finance facility extended to BB Energy, and follows it being awarded a two-year tender by the government of Mauritania to source and import all of the country’s oil needs between April 2012 and April 2014.
Société Générale CIB acted as sole bookrunner and security, documentation and facility agent on the facility, while the International Finance Corporation (IFC) was lead developmental financial institution (DFI) lender.
The facility was oversubscribed, with Natixis, Qatar National Bank and Rabobank joining as lead arrangers and BHF Bank and the Opec Fund for International Development (Ofid) as arrangers.
Yasmin Saadat, the IFC’s head of structured trade finance, tells GTR that the IFC invested US$127.5mn. She adds: “This deal finances a two-year facility for BB Energy, enabling it to source and import oil products for sale to Mauritania’s 11 licensed oil marketing companies, including Mauritania’s state-owned power company Somelec and mining company SNIM. Each oil marketing company will purchase oil on a 90-day payment term, backed by letters of credit; meanwhile SNIM will pay on an open-account basis.
“The deal represents an effective collaboration of private sector oil marketing companies, state-owned enterprises, the government of Mauritania, and international trading company BB Energy to efficiently serve all of the country’s energy needs. Without the IFC’s risk participation, the successful syndication and mobilisation of partners would have been challenging, which could have impacted the import of fuel and its distribution across Mauritania.
“The deal will finance up to US$1.5bn of energy commodity trade flows to Mauritania over two years, covering the country’s entire needs and protecting against the risk of disruptions in energy supply and spikes in energy prices that would negatively affect the macroeconomic stability and GDP growth of the country. It will have a positive impact in one of the world’s poorest countries, where unemployment is over 30% and one out of every two people lives in poverty. By financing the flow of energy products, the deal helps protect vulnerable segments of society and ensure that access to energy for the population will continue.”