The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BoI) on Tuesday signed a Memorandum of Understanding (MoU) on the utilisation of the $100 million Nigerian Content Intervention Fund (NCI Fund) to be managed by the bank.
The NCI Fund is a pool made available by the NCDMB to meet the funding needs of manufacturers, service providers and other key players in the Nigeria’s oil and gas industry.
In line with Section 104 of the Nigerian Oil and Gas Content Development (NOGICD) Act of 2010, operators in the oil and gas industry contribute one per cent of the value of every contract in the upstream sector into the Nigerian Content Development Fund (NCDF) from which the NCI Fund was created.
Speaking at the MoU signing ceremony in Lagos, the acting Executive Secretary of the NCDMB, Mr. Patrick Obah, said the $100 million 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 industry.
“The fund shall be utilised to finance existing and intending manufacturers, oil and gas service companies and original equipment manufacturers (OEM) in the Nigerian oil and gas industry,” he added.
He identified areas of utilisation of the fund to include fixed assets; working capital, leasing of industrial and business equipment and marine vessels.
According to Obah, intending features of the fund include single interest rate of eight per cent; tenor range of one to 10 years, moratorium maximum of 12 months from the date of loan disbursement and speedy processing.
“Intending beneficiaries who have previously executed contracts in the industry must be up-to-date with the remittances to the NCDF). BoI will obtain this confirmation from the NCDMB before any application can be successful,” Obah explained.
The NCDMB boss added that the BoI would serve as the custodian and manager of the fund, stressing that the fund would be accessible to eligible players at the given single interest rate.
Obah said the collaboration of his agency and the BoI was based on the bank’s expertise and specialisation as a developmental bank created to speed up the industrialisation of the Nigerian economy.
Also speaking, the acting Managing Director of BoI, Mr. Waheed Olagunju, said his bank had the capacity to successfully manage the fund.
“Our mission is to transform Nigeria’s industrial sector. We are not adding much value in the oil and gas industry as other OPEC countries. But today, we will begin to promote industrial projects in areas covered by the mandate of the NCDMB. We are glad that this collaboration is taking place,” Olagunju added.