The Nigerian Content Development and Monitoring Board (NCDMB) has said the $50 million fund for NOGAPS manufacturing product line will only be accessed by companies that will take up spaces in the Nigerian oil and gas park to enable them procure equipment or build their manufacturing shop floor within the park.
The fund the NCDMB disclosed, is to motivate companies that would operate in the parks and engage in the manufacturing of equipment components used in the oil and gas industry and linkage sectors.
Speaking recently in Lagos during the launching and signing of the fund in partnership with the Bank of Industry, the executive secretary of NCDMB, Simbi Kesiye Wabote stated that the fund would support oil and gas companies that would operate in the oil and gas parks developed by the board in Bayelsa and Cross River states.
Wabote pointed out that the NOGAPs manufacturing fund is different from the initial $300m fund being managed by the Bank of Industry with five product lines which aims at supporting Nigerian businesses that contribute their one percent to the Nigerian Content Development Fund.
He said the new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
On criteria for accessing the NOGAPS manufacturing fund, the executive secretary hinted that unlike the Nigerian Content Intervention Fund which requires companies to be contributors before they can benefit, the NOGAPS fund can be accessed by companies that will be domiciled and will manufacture their products within the park.
According to him, the rate for accommodation is reduced, power is guaranteed and the rent will only begin to count when the company commences manufacturing.
Beneficiaries he said, will get a maximum single obligor of $3m and minimum of single obligor of $250,000 with one year moratorium repayable within five years at five percent interest per annum.”
Wabote added, ”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.
“The Fund will provide loans to Nigerian companies that meet 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.
In his remarks, the managing director, Bank of Industry, Olukayode Pitan applauded the board for being a partner in progress noting, that the fund will further help promote in-country manufacturing as well as create employment.
Pitan pointed out that the interest rate will help companies to easily access the product and payback as he charged Nigerian companies to harness the opportunity to pick up space within the park to produce locally.
“The interest rates are very good just like the initial fund which is less than 10 percent and the same thing will apply to this one. All we are looking for are Nigerians who want to manufacture in Nigeria,” he stressed.
The Nigerian Content Board established the NCI fund in 2018 with the purpose of financing oil and gas companies to increase capacity and grow Nigerian content. Presently, the NCI fund has five product lines which are being managed by the Bank of Industry. They include – manufacturing finance -$10m; asset acquisition finance -$10m; contract finance -$5m; loan refinance -$10m and community contractor finance – N20 million.
The board is said to also have a US$30 million working capital fund for oil and gas service companies and US$20m, fund for women.
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