53 companies access Nigerian content development fund – Official

Mr Obinna Ofili, General Manager, Nigerian Content Development Fund and Treasury Management, NCDMB, disclosed this at the 2021 Capacity Building Workshop for Media Stakeholders on Thursday in Abuja.

The fund, which is being disbursed by NCDMB in  partnership with the Bank of Industry (BOI) aims at increasing the capacities and capabilities of Nigerian companies in the oil and gas industry and also to grow Nigerian content in the industry.

Ofili, in a presentation noted that NCDMB was desirous of making a difference and deployed the Nigerian Content Development Fund (NCDF)  in line with the mandate of the Nigerian Oil and Gas Industry Content Development Act (NOGICD Act) 2010.

He stated that the Managed Fund scheme was introduced in 2017 with initial funding of $200 million but commenced fully in 2018.

He said the Fund size later increased to $300 million in 2020 (which translates to N123 billion at N410/$1).

He said the fund was being disbursed based on five Product Offerings, with each product having distinct features and single obligor limit.

He listed the products as Manufacturing Financing (maximum of $10 million);  Asset Acquisition Financing (maximum of $10 million); Contract Financing (maximum of $5 million); Community Contractor Finance (maximum of N20 million) and Refinancing (maximum of $10 million).

According to him,  applicable collateral for the loan comprised Bank Guarantee from an acceptable commercial bank to cover the loan amount.

He also added that the collateral might include a combination acceptable to BOI of legal mortgage covering twice the value of the loan and in an acceptable location, Treasury Bills, Federal Government bonds, tripartite domiciliation of Contract proceeds.

He added All Assets Debenture and stocks and shares of blue-chip companies.

Speaking on requirements, he said the company must operate in the upstream and midstream sector of oil and gas industry and must have a clear history and evidence of remittance of one per cent contract as stipulated in both NOGICD Act and the NCDF framework.

“Applicable interest rate is 8 per cent all-in per annum for all products except Community Contractors, which is pegged at 5 per cent all-in per annum.

“However, NCDMB slashed the rate to 6 per cent per annum as palliative to loan beneficiaries to overcome the challenges arising from the COVID-19 pandemic and attendant economic melt-down.

“Maximum tenor of each facility is 5 years, with moratorium period of 12 months. However, NCDMB granted palliative tenor and moratorium extension of two years from April 2020 to March 2022.

“Credit risk is borne 100 per cent by BOI to ensure both prudent loan management and return of the lent funds, so that other qualifying stakeholders can benefit from financing their businesses under the Scheme.

“Loan is restricted to qualifying Oil & Gas activities while both NCDMB and BOI officials conduct routing monitoring of projects and activities financed with the loan finance.

“There is also regular annual external audit of the Fund.

“There is no bad loan under the scheme presently as all the loans are performing and meeting their obligation.Three companies have so far fully liquidated their loans,” he added.

He recalled that the success of the NCI Fund had birthed the Working Capital and Capacity Building Fund and the Women in Oil and Gas Fund.

He said both were domiciled with and managed by NEXIM Bank and having seed capital of $50 million and counterpart funding of additional $50 million in Naira.

The workshop has its theme as “Sustaining Nigerian Content amidst Shifting Energy Landscape: The Role of the Media”.