Isaac Ombe, Yenagoa
Executive Secretary of the Nigerian Content Development and Monitoring Board (NCDMB), Engr. Simbi Kesiye Wabote, has given an insight into oil and gas companies that would benefit from the just launched multi-million dollar fund for oil and gas equipment manufacturing.
The NCDMB and Bank of Industry (BoI) had, last Wednesday, launched US$50 million fund for oil and gas equipment manufacturing companies.
The fund is to incentivise companies that would operate in the Nigerian Oil and Gas Parks and engage in the manufacturing of equipment components used in the oil and gas industry and linkage sectors.
In his speech at the signing ceremony, Engr. Wabote says the fund supports companies that would operate in the oil and gas parks developed by the Board in Bayelsa and Cross River states.
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According to the executive secretary, the fund will only be accessed by companies that take up spaces in the park to procure equipment or build their manufacturing shopfloor within the park.
Wabote, who pointed out that the NOGAPs Manufacturing Fund was different from the initial $300 million fund being managed by BOI with five product lines which aims at supporting Nigerian businesses that contribute their one percent to the Nigerian Content Development Fund, added that the new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
“The decision of the Board to establish the product was informed by the peculiarities of the manufacturing sector, which include infrastructure challenges, long gestation, long lead time before returns, low margins on products and high risk attached to the endeavour, in addition to the reluctance of commercial banks to lend to the sector and application of stiff collateral and eligibility criteria where loans are extended.”
Highlighting criteria for accessing the NOGAPS manufacturing funds, Wabote hinted that unlike that of Nigerian Content Intervention Funds requires companies to be contributors before they can benefit, and that the NOGAPS fund could be accessed by companies that would be domiciled and would manufacture their products within the parks.
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He said, “The Fund will provide loans to Nigerian companies that meets the criteria to operate in any of the designated NOGAPS Industrial Park for the purpose of financing manufacturing activities, purchase of fixed assets, working capitals and logistic. Beneficiaries will get a maximum single obligor of $3m and minimum of single obligor of $250,000.00 with one year moratorium repayable within five years at five percent interest per annum.”
Managing Director of Bank of Industry, Mr. Olukayode Pitan, who lauded the Board for being a partner in progress, noted that the fund will further help promote in-country manufacturing as well as creation of employment.
According to him, “the interest rate will help companies to easily access the product and payback.
“The interest rates are very good just like the initial fund which is less than ten percent and the same thing will apply to this one.
“All we are looking for are Nigerians who want to manufacture in Nigeria”, he added and charged Nigerian companies to harness the opportunity to pick up space within the park to produce locally.
