The Nigerian Content Development and Monitoring Board (NCDMB) has said it is planning to increase the funds lent to qualified oil and gas players under the Nigerian Content Intervention Fund (NCI Fund) from $100 million to $200 million.
Simbi Kesiye Wabote, the executive secretary of NCDMB, stated this in Lagos during a visit to the newly appointed managing director of the Bank of Industry (BOI), Olukayode Pitan.
The 100 percent increase of the fund, Wabote said, would ensure that more deserving companies benefit from it.
“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,” an official statement issued Monday by NCDMB quoted Wabote as saying.
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 Nigerian Content Development Fund (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 $100 million, but its takeoff 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 that 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 NCDMB.
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.
Responding, Pitan said that BOI has presence in 21 states of the federation and is well positioned to support the NCDMB to achieve its objectives in effective loan disbursement and management for the oil and gas industry.
The NCI Fund is sourced from the statutory NCDF which is funded from 1 percent that is deducted from the value of all upstream contracts.
The NCDF is underpinned by section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, which provides that the funds be used for developing capacity in the oil and gas industry.
Subsection 3 of section 104 also provides that “the fund shall be managed by the Nigerian Content Development Board and employed for projects, programmes and activities directed at increasing Nigerian Content in the oil and gas industry.”
The NCDMB set up an advisory committee in 2012 for the NCDF, with a view to deepening transparency and ensuring involvement of key stakeholders in the fund’s administration.
Representatives of the international operating companies, PETAN, Oil and Gas Trainers Association (OGTAN) and BOI make up the advisory committee.
