Emmanuel Addeh in Abuja
The Nigerian Content Development and Monitoring Board (NCDMB) has slashed the interest rate on the Nigerian Content Intervention (NCI) Fund from eight to six per cent per annum for beneficiaries.
In a statement by the Executive Secretary of the NCDMB, Mr Simbi Wabote, the organisation also announced an extension of the moratorium and tenor with effect from April 01, 2020.
The release added that the move was to spur business activities, particularly in the oil and gas sector for beneficiaries of loans under the pool of funds which was launched to provide loans to Nigerian companies involved in manufacturing in the oil and gas industry as well as firms seeking to acquire assets, especially rigs and marine vessels.
It also covers contract financing for Nigerian oil service providers, contract financing for oil and gas community contractors as well as contract and loan refinancing for service companies that already have facilities with Nigerian banks.
Wabote explained that the palliatives sought to reinforce the various economic stimulus packages by the federal government to support businesses to overcome the difficulties created by the coronavirus outbreak in Nigeria.
He reaffirmed the board’s commitment to continue to provide impetus to businesses in the oil and gas industry to surmount emerging operating difficulties in line with the federal government’s policy direction.
“Under this palliative regime, all running loans with outstanding tenor within three years will be extended by six months, while all running loan facilities with a tenor above three years will get extra 12 months tenor.
“Similarly, there will be moratorium extension on all running loan facilities under manufacturing, asset acquisition and contract finance with outstanding tenor not exceeding 3 years by 6 months and by 12 months for all applicable running loan facilities, effective April 01, 2020” the NCDMB said.
It added that the five loan products under the NCI Fund are manufacturing, asset acquisition, contract finance, loan refinancing and community contractor financing, but noted that there have been no disbursements yet under community contractor financing to date.
The board also confirmed that about 91 per cent of the $200 million NCI Fund had been disbursed to 26 beneficiaries and many of the borrowers had started repaying, stressing that the current success rate of the intervention fund is above 95 percent.
Meanwhile, Wabote has asked the Nigeria LNG Ltd (NLNG) to evaluate the capabilities of the beneficiaries of Project 100 programme and engage them in the execution of its Train 7 project and other related services.
In a recent letter, he urged the Managing Director of NLNG, Mr. Tony Attah, to support the start-ups through special interventions to facilitate their incubation, maturation and growth into world class service companies.
He said the programme was introduced as part of the board’s mandate to develop the capacity of the local supply chain for effective and efficient service delivery in the oil and gas industry.
Wabote said the first phase began in January 2019 and 60 companies were selected through a transparent process conducted by KPMG, an international consultancy firm, adding that the benefits of the scheme include special interventions, access to market opportunities, access to capacity building, funding, policy prescription, research and development and business insight.
He noted that NCDMB would regularly recommend Project 100 Companies to project promoters and big EPCI companies, for them to independently assess their capabilities for the purpose of creating business opportunities.
“In this particular instance, NLNG is expected to conduct its own due diligence on the capacity of these companies and based on their proven capacities engage them for the Train 7 project.
“The involvement of Project 100 Companies in its supply chain will be a major boost in the quest to collectively support local companies to become large enterprises and deepen local content practice in Nigeria’s oil and gas industry.
“The areas of competencies of the Project 100 beneficiaries include exploration, subsurface and seismic services, fabrication and construction, FEED, detailed and other engineering services, marine services and operations and inspection, testing and certification.
“Other key areas of competencies are inspection, hook-up and commissioning, material and procurement, project management and consulting, well drilling services and petroleum technology as well as maintenance and modification” the NCDMB said.