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Standard Bank bids to fund Zambia oil purchase
Real estate news By Reuters South Africa
Wed 28 Nov 2007, 13:46 GMT
LUSAKA, November (28) - A unit of South Africa's Standard Bank has tendered to finance a $1.07 billion crude oil feedstock purchase deal for mineral-rich Zambia, a senior government official said on Wednesday. Energy and Water Development acting permanent secretary, Oscar Kalumiana, said Stanbic Bank Zambia Plc and Finance Bank Ltd., another local bank were competing for a two-year financing contract for Zambia's 1.4 million tonnes crude oil requirements.
Zambia, which has faced intermittent fuel shortages due to problems in procuring crude oil for its vast copper and cobalt mines and other sectors of the economy will announce the successful bank by mid-December, Kalumiana said. "The two banks submitted technical financial proposals through the Zambia National Tender Board (ZNTB). We are evaluating the proposals and will select one of them before mid-December," Kalumiana told journalists from state media.
Officials say the government is currently scrutinizing tender documents for five foreign oil trading firms which want to start procuring oil for the country. Kalumiana said the government had requested local banks to participate in the financing to pay for the feedstock supplied in order to access funds quicker, especially for upfront costs. "It (oil deal financing) will be a revolving facility with each shipment to last one and a half months at $67 million per oil shipment at current prices and we need eight shipments in a year. The banks have other charges and their bids will be graded depending on who has the best structure," Kalumiana added.
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