The Nigerian Content Development and Monitoring Board (NCDMB) has unveiled plans to increase the funds lent to qualified oil and gas players under the Nigerian Content Intervention Fund (NCIF ) from $100 million to $200 million (N61.2 billion).
The Executive Secretary NCDMB, Simbi Kesiye Wabote who made this disclosure during a visit to the new Managing Director of the Bank of Industry (BOI), Olukayode Pitan, in Lagos recently, said an increase of the pool would ensure that more deserving companies benefit from the Fund at the same time.
The fund is used for the development of capacity in the Nigeria’s oil and gas industry.He disclosed that the new governance framework for the Fund had been finalized and the updated Memorandum of Understanding (MoU) with the BOI will be signed within the next few weeks to signal the take-off of the scheme.
Key features of the NCI Fund according to the Executive Secretary are that the loans will be disbursed directly by the BOI at single digit interest rate and repaid within five years.
Wabote stressed that only contributors to the NCDF, with bankable proposals in the oil and gas industry can approach BOI for the NCI Fund facility. He noted that whereas there were various intervention funds for other critical sectors of the economy like agriculture, aviation, mining and others, there was none for the oil and gas sector before now.
The NCDMB and BOI launched the NCI Fund in July 2016 with $100m but it suffered delays as efforts were being made to fine-tune the governance process. The NCI Fund replaced the original model whereby the NCDF provided partial guarantees and 50 per cent interest rebate to service companies who obtained facilities from commercial banks for asset acquisition and projects execution. Industry stakeholders experienced difficulty-accessing funds under NCDF model, necessitating a change of strategy by the Board.
Industry stakeholders, including the Petroleum Technology Association of Nigeria (PETAN) had described the NCI Fund model as a great initiative that would address the paucity of funding and inability to access credit, which often beset manufacturers, service providers and other key players in the Nigerian oil and gas industry.The Managing Director of BOI, Olukayode Pitan, expressed delight at the partnership between the Bank and NCDMB.
He said BOI has presence in 21 states of the federation and is well positioned to support the Board achieve it objectives in effective loans disbursement and management for the oil and gas industry.
Pitan assured that BOI would work with NCDMB to source additional pool of funds for this vital sector of the economy. Chairman, Petroleum Technology Association of Nigeria (PETAN) Bank-Anthony Okoroafor, said that the Nigerian Content Fund is meant to assist Nigerian companies in need and “Built in Nigeria should be the industry road mantra”.
He urged the NCDMB, International Oil Companies (IOCs) and government to commit to long term embedding Nigerian contractors in their projects before Final Investment Decisions (FIDs) are signed.
The promotion of value added local content in moderate collection and value should be placed on existing in-country capacity, not patronage. Leverage should be given to Nigerian companies and help the young companies that are coming up to grow without compromising on capacity building in-country. There should be a sense of urgency because it appears as if the local content law battle has been won but the local content implementation is far from been actualized hence “Local content is equal to self-reliance”