By John Ikani
The Nigerian Content Development and Monitoring Board (NCDMB), has disclosed that its $300million Nigerian Content Intervention Fund (NCIF) scheme has been so far accessed by 53 companies.
General Manager, Nigerian Content Development Fund (NCDF) and Treasury, Mr. Obinna Ofili made the disclosure at the Nigerian Content Capacity Building Workshop for Media Stakeholders on Thursday in Abuja with the theme ‘Sustaining Nigerian Content amidst Shifting Energy Landscape: The Role of the Media.’
NCIF is a partnership between the NCDMB and the Bank of Industry, to boost capacity development of Nigerian companies in the oil and gas sector.
According to Ofili, the scheme was introduced in 2017 with initial funding of $200 million but commenced fully in 2018 and increased to $300 million in 2020 (which translates to about N123 billion at N410/$1).
“The fund was being disbursed based on five Product Offerings, with each product having distinct features and single obligor limit,” Ofili said.
The products include 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 Ofili, the NCI fund further gave rise to the Working Capital & Capacity Building Fund and the Women in Oil & Gas Fund domiciled with and managed by NEXIM Bank and having seed capital of $50 million and counterpart funding of additional N50 million.
He said: “A significant number of companies have so far accessed loans under the scheme, with the present number at 53.
“There is no bad loan under the scheme presently as all the loans are performing and meeting their obligations. Three companies have so far fully liquidated their loans
“Loan disbursements presently stand at over 100% of the Fund size, as Bank of Industry is already re-lending recovered loans paid back by initial borrowers under the scheme.”
Ofili also revealed that collateral for the loan comprised bank guarantee from an acceptable commercial bank to cover the loan amount, which could also be 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.
“Applicable interest rate is 8% 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.”
He stated that the credit risk is borne 100% 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 as the loan is restricted to qualifying Oil & Gas activities while both NCDMB and BOI officials conduct routine monitoring of projects and activities financed with the loan finance.
NCDMB also seized the opportunity to task the media in helping the Board promote local content.
General Manager, Corporate Communications and Zonal Coordination NCDMB, Dr. Ginah Ginah, who made the call said growing local content would ensure job creation, economic growth and improved revenue for the government.