The Bank of Industry (BoI) and Nigerian Content
Development and Monitoring Board (NCDMB) have signed a Memorandum of
Understanding (MoU) to facilitate the disbursement of $100 million to operators
in the oil and gas sector for local content development.
Under the agreement, the bank will serve as the custodian
and manager of the $100 million Nigerian Content Intervention Fund (NCI Fund)
to meet the funding needs of manufacturers, service providers and other key
players in the nation’s oil and gas industry.
Specifically, the NCI Fund will be disbursed to operators
in the sector at a single digit interest rate of eight per cent with a tenor
period of between one to ten years.
Furthermore, the Fund will attract a moratorium of 12
months and a maximum of $10 million obligor limit for operators seeking to
access the fund.
Speaking at the signing of the pact in Lagos, yesterday,
the Acting Managing Director, BoI, Waheed Olagunju expressed optimism of the
partnership having a lot of impact on the lives of many Nigerians.
According to him, the bank has been managing some funds
for several stakeholders and would ensure that the NCI fund is disbursed to the
appropriate beneficiaries so that value-addition can be promoted in the oil and
gas sector.
“We will begin to promote more industrial projects in the
oil and gas sector while ensuring that there are linkages with small and medium
enterprises. The value-chain in the oil and gas sector needs to be explored for
job creation, as this is the only way to promote an inclusive growth”, he
added.
Regional Manager, South, BoI, Balarabe Hassan while
providing an insight to the implementation of the agreement, explained that the
Nigerian Content Development Fund was established by the section 104 (1,2,3) of
the Nigerian oil and gas industry Content Development Act of 2010 but amended
in an effort to create a structured and transparent process for accessing the
fund.
The Fund was established by the Nigerian Content Act and
is pooled from one per cent of all contracts awarded in the upstream sector of
the oil and gas industry for use in developing the supply chain and building
local capacity in the industry.
Seventy per cent of the pool is to be used to provide
guarantees for single digit and longer tenure lending by banks and funding
institutions to Nigerian service companies seeking, to acquire critical assets
while thirty per cent will be applied for direct intervention by the Board in
critical infrastructure development and training programmes.
“The Fund was motivated by the desire to re-engineer the
operations of the NCDF, increase access and grow indigenous participation in
the oil and gas sector.
“Specifically, the NCI Fund will help stakeholders in the
sector procure fixed assets, working capital, leasing of industrial and
business equipment and acquisition of marine vessels. Intending beneficiaries
who have previously executed contracts in the industry must be up-to-date with
their remittances to the NCDF”, he added.
Acting Executive Secretary, NCDMB, Patrick Daziba Obah,
stated that the Fund is expected to close the financing gap presently being
experienced by stakeholders when embarking on projects.
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