The Bank of Industry (BoI) and the Nigerian Content Development and Monitoring Board (NCDMB) have signed an amendment to the Memorandum of Understanding (MoU) on the $50 million NOGaPS Manufacturing Fund.
The NCDMB established the Fund, which has its domicile in BoI, in order to draw oil and gas equipment manufacturers to the Nigerian Oil and Gas Parks Scheme (NOGaPS) facilities it developed and increase access to affordable financing by manufacturing firms.
At the Nigerian Content Intervention Fund (NCIFund)’s 2023 second quarter Review Meeting, the updated MoU was signed on Friday in Lagos.
In his remarks, the Executive Secretary of the NCDMB, Engr SimbiKesiye Wabote, emphasized the NCIFund’s outstanding accomplishment in spurring investments and the development of capacity in the Nigerian oil and gas sector. He made a suggestion that the African Energy Bank, which was established by the African Petroleum Producers Organization (APPO) in collaboration with the African Export Bank (Afreximbank), was inspired by the Fund and serves as a model for local content practice across the African continent.
He continued by saying that nations like Angola and Namibia are actively speaking with the Board in an effort to comprehend how the NCI Fund operates and replicate it in their own countries.
In Wabote’s words “today, Angola is thinking of establishing a similar credit line for their oil and gas companies. I think the parliament recently approved some sum of money for them to manage in that respect. Namibia is planning to do the same with the potential enactment of a Local Content Act.”
Wabote further commended the Bank of Industry for the successes being recording in the management of the NCI Fund,assuring that the Board will continue to look for other opportunities to increase its partnership with BoI.
He said: “Considering the effectiveness and success recorded by BoI, NCDMB may consider inviting BoI to send a nominee that will act as independent Director to the Board of Directors of some of the companies that we have invested equity in. This willhelp them overcome some of the prevailing issues around governance, liquidity and technical optimization.”
On his part, the Managing Director of the Bank of Industry, Mr Olukayode Pitan expressed confidence in the future performance of the Board’s funds domiciled in the bank while noting thatthese quarterly review meetings will impact on sustaining the effective disbursements and recovery of these funds.
According to him, the NCI Fund is performing excellently with 194 applications equalling US$1 billion /₦80.6 billion with 69 disbursements totalling US$324 million /₦38.4 billion as at the day of reporting.
The Board established the NCI Fund in 2018 with the purpose of financing Oil and Gas companies to increase capacity and grow Nigerian Content in the Industry 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 – ₦20 million.
The US$50 million NOGaPS Fund was launched as a separate product in March 2023 to incentivize companies that will be domiciled and manufacture oil and gas equipment componentswithin the NCDMB oil and gas parks being established at different locations across the country, with the sites in Bayelsa and Cross River State open for occupation.
The Board also has a US$30 million Working Capital Fund for oil and gas service companies and US$20m Fund for Women in Oil and Gas Intervention Fund. The last two facilities are administered by the Nexim Nigerian Export-Import Bank and the agreements were signed in mid-2021.