HFC targets local service providers in oil and gas

HFC targets local service providers in oil and gas

HfcHFC bank and Afreximbank have come together to provide US$70million loan facility to enable service companies in the mining, oil and gas industry take on contracts from majors in the two sectors.

Service providers can apply for a share of the loan, which can be accessed as cash advances to pre-finance their contracts or as confirmation of letters of credit or the issuance of guarantees in their behalf.

Companies can apply for a minimum of US$500,000 and a maximum of US$20million, Director of Corporate Banking at HFC, Mr Osei Asafo-Adjei disclosed.

Interest on the loan is 4.5%, a rate, Asafo-Adjei said, is the lowest companies can get in Ghana.

Although foreign companies registered in Ghana will be considered for the loan, Asafo-Adjei said the facility is “largely” for Ghanaian service providers in the mining, oil and gas industries who struggle to take on contracts in those sectors.

“The idea is to provide an affordable facility to enable particularly Ghanaian service providers to deepen their operations and increase capacity. We realise that one of the major challenges for Ghanaians in these sectors, which require a lot of resources, is that they do not have adequate funding. So we have put together this structure, which is affordable because it has about the lowest interest rate in Ghana.”

Renaissance Africa Group, a financial advisory services firm, has been charged to profile applicants for the loan and help them organise their documentation. Once the application reaches HFC, the loan should be processed in not more than four weeks.

Other flexible terms of the loan, he said, include a 36-month or three-year period of tenor and the fact that need for collateral may not apply in some cases.