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Nigeria : MOU inked by NCDMB and Bol on $100m content devt fund.

A $100 million Nigerian Content Intervention Fund (NCI Fund) is secured by Nigerian Content Development Monitoring Board (NCDMB) and the Bank of Industry (Bol).

The NCI Fund is a pool offered by NCDMB to fulfil the funding requirements of manufacturers, service providers and other important players in the Nigerian oil and gas industry. Before signing event, stakeholders in the oil and gas industry had constantly questioned the modus operandi of the NCI Fund, alleging its modalities were shrouded in secrecy.

Managing Director and Chief Executive Officer (CEO) of Bol, Mr. Waheed Olagunju, stated 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 that 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, as per 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.

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 Funds 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.

He added, Funds 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.

The NCDMB boss ensured that transactions that were already carried out under the partial guarantee arrangement will not be ceased however managed to final settlement, adding that the Board will continue to work with stakeholders to build up financial products that deal with other unique financial needs of the NOSPs

He said, 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.

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Publication:Mena Report
Geographic Code:6NIGR
Date:Jul 22, 2016
Words:453
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