… To unveil updated MoU with BoI
By Adewale Sanyaolu
The Nigerian Content Development and Monitoring Board (NCDMB) has announced fresh plans to increase the Nigerian Content Intervention Fund (NCIF) to $200 million from the the initial $100 million.
Executive Secretary of NCDMB, Simbi Wabote, stated this during a visit to the new Managing Director of the Bank of Industry (BoI), Mr. Olukayode Pitan, in Lagos.
Wabote explained that the increase in the pool of funds would ensure that more deserving companies benefit from the NCIF.
Recall that the NCDMB and BoI had in July 2016, launched the NCDMB/BoI $100 million NCIF but suffered delays as efforts were being made to fine-tune the governance process.
He explained that the new governance framework for the fund had been finalised and the updated Memorandum of Understanding (MoU) with BoI will be signed within the next few weeks to signal the take-off of the scheme.
Key features of the NCIF, according to the Executive Secretary, are that the loans will be disbursed directly by 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 would have access to the NCIF facility when it becomes operational.
He noted that whereas there were various intervention funds for other critical sectors of the economy like agriculture, aviation, and mining, among others, there was none for the oil and gas sector before now.
The NCIF replaced the original model where 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. Under the NCDF model, industry stakeholders experienced difficulty accessing funds, a development that necessitated a change of strategy by the board.
Industry stakeholders, including the Petroleum Technology Association of Nigeria (PETAN), had described the NCIF model as a great initiative that would address the paucity of fund and inability to access credit, which often beset manufacturers, service providers and other key players in the Nigerian oil and gas industry.
In his remarks, the Managing Director of BoI expressed delight at the partnership between the bank and NCDMB, nothing that BoI has presence in 21 states of the federation and is well positioned to support the board to achieve its objectives in effective loans disbursement and management of the oil and gas industry.
Pitan assured that BoI will work with NCDMB to source additional pool of funds for this vital sector of the economy.
The NCIF is sourced from the statutory NCDF, which is funded from one per cent 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.