Funding needs of manufacturers, service providers and other key players in the Nigerian Oil and Gas industry has been boosted through a $100 million Memorandum of Understanding (MoU) signed by the Bank of Industry (BoI) and the Nigerian Content Development and Monitoring Board (NCDMB).
Making this known was the, Acting Managing Director of BoI, Mr. Waheed Olagunju during the official signing ceremony in Lagos recently at the BOI headquarters.
According to him, industrialisation of the economy is crucial to BoI and NCDMB, adding that the fund would transform the nation’s economy to greater heights.
He said that there was need to add value to the country’s natural resource endowments in the oil and gas sector as practiced in other OPEC countries.
The fund, established by the Nigerian Content Act, is being pooled from one percent of contracts awarded in the upstream sector of the oil and gas industry to meet the financing needs of manufacturers, service providers and key players in the oil and gas industry.
Olagunju said that the fund was to boost capacity of workers in the sector through promotion of various skills acquisition schemes in the oil and gas value chain.
Mr. Patrick Obah, the Acting Executive Secretary, NCDMB, said that the MoU was to bridge the industrialisation gap through financing of projects of high employment value, revenue generation and economic growth.
“It took a while to be here, we are positive that the MOU will touch the lives of millions of Nigerians. Our mission is to transform the Nigerian Industrial sector, our strategy is commodity based. We are not doing much on oil and gas but we believe we are going to promote more industrial projects, we are to reduce dependency on oil and gas and we are glad this collaboration is taking place as it will promote job creation” he noted.
Obah said that the board would continue to work towards building capacity of local operators in the sector.
Mr. Balarabe Hassan, the Regional Head, South-South of BoI, said that the fund was aimed at increasing funding to indigenous participants in the oil and gas industry.
He said that some of the fund would be utilised by manufacturers in the industry for machinery and ancillary equipment, financing, marine vessels and leasing of industrial equipment.
According to him, the fund will be accessible at eight percent interest rate, tenure range of one to 10 years, moratorium period of 12 months from date of disbursement and a maximum of $10 million to obligor.
He said that BoI would be responsible for appraisals, disbursement and monitoring of the utilisation of the loan.
Chairman, Petroleum Technology Association of Nigeria (PETAN), Mr. Bank-Anthony Okorafor, urged the board to partner the BoI in raising $600 million for building the biggest shipyard in the country.
“Now that we have come to realise that the old cause is not working, we must have a deliberate policy, what the NCDMB have started is commendable but not enough, they must bring out a substantial amount like USD600m where the content will be lifted to 75 percent to build the biggest shipping yardshere” he explained.
Okorafor also cautioned BoI against bottlenecks for easy access to loans.