Home | News | GOVT IN ‘FAKE’ E3.8BN OIL RESERVE AUSTRIA LOAN

GOVT IN ‘FAKE’ E3.8BN OIL RESERVE AUSTRIA LOAN

20/08/2023 17:32:00 Welcome Dlamini

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MBABANE – Who could be behind this?

Documents, which Minister of Finance Neal Rijkenberg describes as ‘suspicious’, purport that government signed a loan deal of US$200 million (about E3.8 billion when calculated at the latest exchange rate) with one of the largest private companies in Europe. This implied loan contract is for the construction of the Strategic Fuel Reserve Facility at Phuzumoya in the Lubombo Region. The European company cited in the documents is based in Austria and is known as Nexarka Group, which states on its webpage that it is a multi-dimensional group holding with a passion for energy logistics, crude oil and gas delivery and energy financing. The Nexarka Group says it carries out operations in four continents and invested or in the process of investing over US$10 billion (about E190 billion) in acquisitions and other capital expenditures since its inception.

converting

“We strive to make life better for our clients and people around the world by efficiently converting resources into products and services that people depend on every day,” the company’s homepage reads. In the documents, which are all for the attention of one Bruno Peter Atilison, who is referred to as the Chief Executive Officer (CEO) of Nexarka Group, the name and purported signature of Principal Secretary (PS) in the Ministry of Finance, Sizakele Dlamini, are appended. The first document is dated December 13, 2021 and is a perceived apology and response to an earlier process regarding the loan contract. “We, the Government of Swaziland, are sorry for the delay to respond as below, please accept our apology for the oversight,” reads the document, which goes on to state: “For more clarity, the Government of Swaziland has a special relationship with City bank, just like every African country with the international banks abroad to keep and maintain foreign currency and for investment purposes.”

responsible

City Bank, which has been known as Citibank for a longtime now, is the primary US banking subsidiary of financial services multinational Citigroup. The document further mentions that the Finance Ministry had been able to correct the banking detail as requested by Nexarka Group, and was looking forward to ‘concluding the transaction. “We as government are committed to sourcing the funds for the important projects for our country and would be fully responsible to repay the loan in accordance to the terms of the contract with lender. These projects will also help and uplift the socio-economical status of our citizens,” reads the document. Adding, the document states the sincere appreciation of the ministry to the Nexarka Group for ‘believing in our new nation and want to help us’. “We look forward to a positive conclusion of this process,” it concludes. The other document, which is dated March 25, 2023, purports that the loan contract has been sealed and just awaiting minor logistics.

“This letter serves as an acknowledgment and acceptance to our Two Hundred Million Dollars (US$200m) loan signed and completed contract that we received from your organisation in the week of March 16, 2022. We appreciate all the efforts and hard work that was put into making sure that the Two Hundred Million Dollars (US$200m) loan was granted to our country, the Kingdom of Swaziland,” reads the second document. It also expresses the ministry’s apology for the ‘delay which was due to banking procedures’. “But we believe that within the week the bank shall give the go ahead on the transactions as agreed on the loan contract. We appreciate your time and understanding in this regard,” the document adds.

knowledge

Minister of Finance Neal Rijkenberg said he personally did not have any knowledge of this loan contract. “I do not know about this transaction and can confirm that the government has not contracted a loan from this group. Keep in mind that the entity responsible for fuel storage is ENPC (Eswatini National Petroleum Company) and I would recommend that you check with them if they know this entity,” the minister said. After having also seen the two documents, Rijkenberg said ‘it looks suspicious’. The ENPC is a Category A public enterprise, whose mandate is to ensure fuel supply and security in the country, with the Strategic Fuel Reserve Facility being the flagship project of this government company. Nhlanhla Dlamini the ENPC CEO, when contacted about the perceived E3.8 billion loan contract with Nexarka Group, said he was also in the dark about such a deal. “I’ve never heard of such a company. It’s the first time for me, maybe you need to ask the PS of Finance,” he said. Sizakele said the documents were not known to her and they were fake. “The letterheads are not ours and this is not my signature,” she said.

The PS pointed out that she was also not mandated to sign government loan contracts as that responsibility was for the minister. “Moreover, we do not enter into loan agreements without going through Cabinet and Parliament for their involvement and approval,” she said. Sizakele expressed concern at the motive that could be behind these documents. “We need to address this and put a stop to it,” she said, and stated that she had even spoken to her counterpart in the Ministry of Natural Resources and Energy, Dorcas Dlamini, to ascertain if she knew anything about the documents, but the latter said she was also clueless about them.

financed

“I have even engaged my departments and they were also surprised that such documents existed,” she said. The PS said even the business model of the ENPC, which was presented to the ministry, states that the fuel reserve project will be self-financed and no funding would be required from government. Outgoing Lobamba Lomdzala Member of Parliament (MP) Marwick Khumalo, who is Parliament Finance Committee Chairperson, was also surprised at seeing the documents and said there was never such a process of a loan that went through Parliament.
“Also, it is surprising to scout for a loan at a time when the strategic oil reserve is getting 35 cents from every litre of fuel bought and, hence has amassed millions which they could use to solicit funds from financiers without the involvement of the government,” Khumalo said.

In the ENPC’s annual report for the period ended March 3, 2023, Board Chairperson Muziwandile Dlamini reported that an amount of E134 225 404.75 had been collected through the 35 cents per litre levy. The chairman said this was a significant increase from the previous year, as the company was still receiving subvention from government. He said the improved revenue enabled the ENPC to commence work outlined in its strategic plan. Muziwandile also reported that the ENC had initiated activities that were crucial towards the construction of the Strategic Fuel Reserve Facility, which is a key mandate of the company and one in which the company would be exerting a lot of focus on in the next five years.

initiated

When the project was initiated in 2014, it was projected to cost around E900 million, however, as reported by the Times SUNDAY on February 16, 2020, the cost has increased by 355.5 per cent to E3.2 billion. Initially, a private company styled Kantey & Templer Eswatini, was contracted by the Government of Eswatini to construct the fuel storage facility, at the cost of about E900 million. In October 2017, Kantey & Templer was ordered out of the project site and, by that time, works were already underway and government had spent around E54 million on it. Kantey & Templer was engaged in 2014 to construct the facility but its BOOT (Build Own Operate and Transfer) agreement with the Government of Eswatini, which could have facilitated access to loans, was signed on April 5, 2017. This is according to documents seen by the Times SUNDAY. Gates to the project site were locked in 2017 (October) under highly questionable circumstances, as government felt the company’s contract had lapsed.

Between March and April this year, the ENPC issued an invitation for the procurement of consultancy services for the development of an emergency petroleum product supply plan. The invitation said this would include operation modalities for the Strategic Oil Reserve Facility (RFP No.10 of 2022/2023). On the other hand, it transpired that Kantey & Templer (K&T) Swaziland (Pty) Ltd had found another partner in Portugal that had agreed to undertake the project. At the time of locking gates on the project site by the officials of the Ministry of Natural Resources and Energy in October 2017, K&T had received formal undertaking from Vitol Group, that it would finance the project. Vitol’s representatives had visited the country to meet the local company’s directors and government. K&T has reportedly not stopped working on the project behind the scenes regardless of the fact that its directors are still unable to access the project site at Phuzumoya since the gates were locked in 2017.

interest

K&T is said to have received correspondence dated February 9, 2023, from BMT Portugal LDA in which the European firm expressed an interest of entering into a joint venture with K&T. The proposed joint venture agreement which K&T sought from BMT is for the design, engineering and construction of the strategic oil reserve facility of 90 million litres storage capacity. The foreign company pledged to secure the project funding against the sovereign guarantee of about E900 million issued by the Government of the Kingdom of Eswatini. Regarding the ENPC, in its invitation for services, the depot will hold strategic fuel stocks of 40 million litres, the equivalent of 30 days of consumption.
This will be accompanied by a component of commercial stocks to allow for refreshing of product. The ENPC stated that it would increase the capacity from time-to-time, depending on demand. Despite the reduction of the fuel capacity to 40 million litres, the estimated cost for the project has increased against the sovereign guarantee issued by government (E900 million).