Nigeria’s $200 million single digit interest intervention fund is now ready to support local companies in the oil and gas industry.
The designed was designed a year ago by the Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI).
The fund, “Nigerian Content Intervention Fund (NCI Fund)’’, is designed to provide loans to Nigerian companies involved in manufacturing in the oil and gas industry.
It is also for firms that are seeking to acquire assets, especially rigs and marine vessels, Mr. Ibe Kachikwu, Minister of State for Petroleum Resources, said when the fund was in the mill.
The fund is also expected to 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.
No fewer than 11 companies have been approved to access the loan at 8% interest rates out of 45 companies that have applied.
Details of the companies approved for the funding are not made public yet.
The Executive Secretary, NCDMB, Mr. Simbi Wabote, explained that the NCI Fund is a portion of the Nigerian Content Development Fund (NCDF) drawn from one per cent 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.”
The Managing Director of BOI, Mr. Olukayode Pitan, said the NCI Fund will generate employment opportunities and create linkages with other sectors of the economy.
“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.