Investec has increased its exposure at SA’s fuel retail stations to more than R4bn, with the lender saying the sector is an important driver of employment in a job-scarce economy.
The company said its R4.4bn exposure to the sector is primarily through funding provided to operators of fuel retail businesses across the country.
“These petrol stations, often independently owned, are important contributors to local economies, providing essential services and employment in both urban and rural areas,” it said.
SA’s more than 4,600 forecourts are having to contend with dwindling fuel sales, with partnerships with retail outfits key in diversifying revenue streams, according to a report by Trade Intelligence, a market intelligence and research firm in the consumer goods sector.
The report found that nearly 600 new forecourts have opened in SA since 2019, while sales have been declining in the same period, forcing players in the sector to compete for dwindling spending.
The data shows the number of fuel stations in the country grew 14.5% in the past five years as fuel sales declined more than 7% to 21.9-billion litres in the period. The study reviewed major players in the sector such as Astron Energy, Shell, TotalEnergies, Sasol, Puma, BP and Engen.
Fuel companies are ramping up their focus on forecourt retail to supplement their revenues.
British energy major Shell last year announced its intention to disinvest from its SA downstream business, which houses more than 600 of the group’s forecourts.
Investec’s UK business has hit its target of zero thermal coal exposure in its loan book two years ahead of schedule, with the group confident it will meet its SA target in the next five years. The group said in its annual report its exposure to thermal coal as a percentage of total core loans and advances was 0.05% at the end of March.
However, for its fossil fuel exposure, the company has classified its exposure to Eskom under utilities, which are typically evaluated separately because their business model is based on the generation and distribution of electricity, not on fossil fuel production.
“While Eskom uses coal in its energy mix, its classification as a state-owned utility reflects its function in providing essential services, not in extracting or selling fossil fuels. However, it should be noted that we do include Eskom when calculating our financed emissions,” it said.
“Eskom, as the country’s primary electricity provider, plays a foundational role in underwriting the nation’s energy infrastructure and enabling economic resilience. A failure of Eskom would have severe and far-reaching consequences for the country,” Investec said.
“While our strategy strongly prioritises decarbonisation, we are equally committed to a just and inclusive transition. As such, any decisions relating to Eskom are made with careful consideration of both our climate goals and the imperative to support national development.”
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