…Minister targets $1bn
The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) on Thursday in Abuja launched the 200 million dollars Nigerian Content Intervention Fund (NCI Fund).
The pool of funds will provide loans to Nigerian companies involved in manufacturing in the oil and gas industry as well as firms seeking to acquire assets, especially rigs and marine vessels. Beneficiaries will get a maximum of $10m, repayable after five years at eight percent interest rate.
The NCI Fund will also cover contract financing for Nigerian oil service providers, contract financing for oil and gas community contractors and contract and loan refinancing for service companies that already have facilities with Nigerian banks.
The Fund will be disbursed directly by the BOI, with community contractors able to access N20m which they will repay with five percent interest.
Speaking at the event, Minster of State for Petroleum Resources, Dr. Ibe Kachikwu called on financial institutions, oil companies and other stakeholders to grow the Nigerian Content Intervention Fund to $1bn.
He said, “The Fund needs to be sizeable to finance big ticket items. We will work internally, first to get BOI to contribute its counterpart funding. I also expect the oil industry to contribute. I will like to see investments drives that will bring in Foreign Direct Investments into this Fund. “
The minster also called for transparent disbursement, geographical spread and application to different segments of the industry.
He canvassed that the Fund be applied in acquiring assets and business driven by cutting edge technology and not facilities that already exist in-country.
Speaking further, the Minister canvassed for a target date when Nigeria will have 100 percent in-country capacity to fabricate every input needed in the oil and gas industry, including Floating Production Storage and Offloading vessels.
In his welcome address, the Executive Secretary NCDMB, Engr. Simbi Wabote explained that the NCI Fund is a portion of the Nigerian Content Development Fund (NCDF) drawn from one percent of all contracts awarded in the upstream sector of the industry.
He added that the Fund was the realization of NCDMB’s efforts to address persistent funding challenge that hindered capacity and growth of local service providers in oil and gas.
He stated that the Board had channeled its efforts into supporting the Federal Government’s drive to stop importation of petroleum products, adding that its strategic initiative was to achieve 100 percent local fabrication of modular refineries being promoted by the government.
He said, “We have commenced discussions with Original Equipment Manufacturers and local fabricators to make this a reality. We have set aside areas in our oil and gas park for practical training on operations, maintenance and running of modular refineries as a sustainable business model and for fabrication of the units.”
In his comments, Managing Director BOI, Mr. Olukayode Pitan said the NCI Fund will generate employment opportunities and create linkages with other sectors of the economy.
He noted that “BOI loans normally attract single digit interest, but this is single digit in dollars. It would have been difficult if the funds were not coming from NCDMB.”
He promised that the Bank will set up a team of experts who would handle loan applications professionally. “It will only take 45 days between when you apply and when we confirm whether your application will go through or not.”
The Group Executive Director, Finance and Accounts, Nigerian National Petroleum Corporation (NNPC), Mr. Abdulrazak Isiaka commended the Board for addressing the challenges that were experienced with the old model of the Fund.
He charged beneficiaries to utilize the Fund diligently, stressing that due diligence should be done before granting the loans, which must be in areas targeted for development.