The Nigerian Content Development Monitoring Board (NCDMB) is to set aside $100 million for Project Finance, Asset Acquisition & Contractor Finance under its Nigerian Content Intervention Fund (NCIF).
NCDMB’s General Manager, Finance and Accounts, Obinna Ofili, who stated this, however, did not give details of how the Contractor Finance fund would be accessed because the discussions, as he put it, was still ongoing.
The Contractor Finance Fund is coming less than a year after the Board sealed a similar deal with the Bank of Industry (BoI).
The Board in July last year, signed a Memorandum of Understanding (MoU) with BoI to establish the Nigerian Content Intervention Fund.
The BoI/NCDMB initiative also carries a $100milion value, but it is specifically meant for the manufacturing of components in the oil and gas industry.
The interventions are drawn from the Nigerian Content Development Fund (NCDF), which value is put at about $600million.
On the initial $100million for manufacturing in the oil and gas, the understanding is that BoI would be responsible for its deployment to qualified contractors. NCIF provides long term facilities to contributors to NCDF at eight per cent interest rate.
“As soon as we finalize the process for the release of the initial $100 million (about N31 billion) to BoI for the pilot phase, contributors to the Fund with manufacturing proposals in the oil and gas industry, can approach BoI for the NCIF facility, which has a single obligor limit of $10 million and tenor of up to five-10 years,” the Executive Secretary of NCDMB, Simbi Wabote, said.
Ofili, who spoke on the need for upstream contractors to pay their contributions into the Fund, and areas the Board is focused on, saying the fund utilization on developmental initiatives will be deployed on areas such as manufacturing of pipe mill, Nigeria Oil and the Gas Park scheme (NOGaPs), which is ongoing at five different locations, including one at Polaku, Bayelsa State.
On human capital development, Ofili said the Board’s focus is in direct training in areas such as geosciences training,Artisan and machinist training, oil spill management & environmental remediation training.
It also encourages sensitization programmes on supplier development, and as well support the Nigerian Content Consultative Forum (NCCF) and Nigerian Content Investment Forum (NCIF).
Ofili also noted that LADOL Integration Yard Development benefitted from the intervention through the 30 per cent partial guarantee and 50 per cent interest rebate, while Stars Investment, involved in vessel construction benefitted through 25 per cent equity guarantee, and Vandrezzer, which is into contract financing got 30 per cent NCDF partial guarantee and 50 per cent interest rebate
Ofili said contractors’ currency of remittance of NCDF deduction must be the currency of the contract, adding that conversion of currency will be allowed only if the transaction (s) currency is outside of any of the four major currencies such as United States Dollar, Great Briatin Pound, Euro and Nigerian Naira) with the Board approval. Conversion will be made to US Dollars.