13 Jul 16 – State-owned National Oil Corporation of Kenya’s (NOCK) USD 500m Mombasa oil storage and jetty project has been hit by financing delays and construction is unlikely to begin next year as planned, two sources close to the situation said.
Additionally, Eversheds confirmed that it has been mandated as NOCK’s legal adviser on the project. EY is the confirmed financial adviser for the project.
The project has stalled because the government of Kenya is reluctant to commit to the project’s budget, the first source said.
Very little progress has been made, and there has been no indication from NOCK when things will start moving, the second source said. The longer the delay, the more expensive the project will get, the second source added.
Financing the project will entail bringing in an additional equity partner, both sources said. The size of the stake on offer is yet to be determined, the second source added.
Mergermarket previously reported that a tender process to secure an equity partner was slated to begin in 1Q16. This process has still not begun, the sources said.
The project will reportedly comprise two terminals with a capacity of 1.5m twenty-foot equivalents (TEUs).
NOCK and the government of Kenya did not respond to requests for comment.
by Katie McQue