FG targets $1bn fund to support local oil, gas firms

The Federal Government yesterday launched a $200 million intervention fund with future plans to raise the value to $ 1 billion to help local oil and gas companies grow their capacities.

The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) signed a Memorandum of Understanding (MoU) in Abuja for the implementation of the $200 million fund which would be accessible to qualified indigenous manufacturers, service providers and other key players in the oil sector.

The fund, managed by the NCDMB, would be disbursed directly by the BOI at single digit interest rate and repaid within five years.

Called the Nigerian Content Intervention Fund (NCI Fund), it is sourced from the statutory Nigerian Content Development Fund (NCDF) which is funded from one percent that is deducted from the value of all upstream contracts.

NCDMB and BOI launched the NCI Fund in July 2016 with $100 million but it suffered delayed implementation until yesterday when officials announced the takeoff of the low-cost credit scheme.

Speaking at the launch of the fund to commence its implementation, Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, said the ultimate target was to increase the size of the fund to $1 billion.

The Managing Director of BOI, Olukayode Pitan, said the fund could be used to acquire oil assets, set up manufacturing facilities such as oil rigs and help refinance existing loans.

He said contractors in communities could access up to $20 million at 5 per cent interest rate while manufacturers and other categories of qualified players in the oil and gas sector could borrow up to $10 million for a single project at a single digit interest rate.

Executive Secretary of NCDMB, Mr. Simbi Wabote, said the launch of the fund was part of effort to address the persistent funding challenges that stifled growth of service providers and indigenous companies.