By Adewale Sanyaolu
Nigeria’s oil and gas industry may soon enter a new phase of development as the Nigerian Content Development Monitoring Board (NCDMB) and the Bank of Industry (Bol) Tuesday, sealed a $100 million Nigerian Content Intervention Fund (NCI Fund).
The NCI Fund is a pool made available by NCDMB to meet the funding needs of manufacturers, service providers and other key players in the Nigerian oil and gas industry. Prior to yesterday’s signing event, stakeholders in the oil and gas industry had consistently queried the modus operandi of the NCI Fund, alleging its modalities were shrouded in secrecy.
But acting Managing Director and Chief Executive Officer (CEO) of Bol, Mr. Waheed Olagunju, explained at the Memorandum of Understanding (MoU) signing ceremony that the need to build in-country capacity informed the decision of Bol to partner NCDMB in the management of the fund.
Olagunju said it remained regrettable that 60 years after Nigeria discovered oil in Oloibiri, a small community in present day Bayelsa State, the country is still largely import dependent. The NCI Fund, according to him, will attract a single digit interest rate of eight percent with a tenor ranging from one to 10 years,a maximum moratorium of 12 months (from date of loan disbursement),$10 million maximum obligor limit and assurance of speedy processing.
Given further insights into the NCI Fund, Acting Executive Secretary, NCDMB, Mr. Daziba Patrick Obah, said as part of operating model for utilisation of NCDF, two Special Purpose Vehicle (SPVs) were incorporated to oversee the Fund’s administration while an NCDF Advisory Committee comprising industry representatives (IOCs, PETAN, OGTAN, BOI) was inaugurated to provide oversight and guide the Board on utilisation of the Fund.
‘‘Fund’s utilisation was anchored on the principle that the Fund should not be depleted within the short term taking into consideration the feedback from the industry, a case was made for a redesign of the operating model in favour of direct on-lending to Nigerian Oil and Gas Service Providers (NOSPs)
The NCDF model has now been reviewed and the key features of the revised operating model include:, compliance with Treasury Single Account (TSA) policy of the Federal Government, direct on-lending to beneficiaries under competitive terms while leverage on experience of Bank of Industry in development financing,’’ he said
Obah maintained that the MoU between the two agencies reflects the strong determination of BOI and NCDMB to lead the process of Nigeria’s industrialisation, by closing the gap in financing of projects that have high prospects of creating employment, retaining revenue in-country and adding value to our economy.
The NCDMB boss assure that transactions that were already consummated under the partial guarantee arrangement will not be terminated but managed to final settlement, adding that the Board will continue to work with stakeholders to develop financial products that address other unique financial requirements of the NOSPs
‘‘Nigerian content will continue to work towards building capacity of the local service providers to achieve their full potential to own assets, execute work in Nigeria, invest in new capabilities, develop technology and acquire skills,’’ he said.