Nigeria raises NCI intervention Fund to $350 mln ~oil minister
The Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention (NCI) Fund from $200 million to $350 million.
Timipre Sylva, Minister of State for Petroleum and Chairman of the NCDMB Governing Council, announced this in a statement posted on the NCDMB’s website on Sunday.
Sylva said the enlargement of the fund by $150 million was part of the decisions taken at the meeting of the council which held virtually on June 16.
“The council approved that $100 million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund.“This include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing.
“Similarly, the council also approved that $20 million and $30 million respectively should be deployed to two newly developed loan product types.
“These are the Intervention Fund for Women in Oil and Gas and Petroleum Technology Association of Nigeria (PETAN) products, which include working capital loans and capacity building loans for PETAN member companies,’’ Sylva.
According to him, the NCI fund was instituted in 2017 as a 200 million dollars Fund managed by the Bank of Industry (BoI), engaged to facilitate on-lending to qualified stakeholders in the Nigerian oil and gas industry on five loan product types.
He said the NCI fund was a portion of the Nigerian Content Development Fund (NCDF), aggregated from the one percent deduction from the value of contracts executed in the upstream sector of the oil and gas industry.
“About 94 percent of the NCI Funds has been disbursed to 27 beneficiaries as at May 2020. NCDMB has received new applications from 100 companies for nearly triple the size of the original fund.
“Guidelines for the NCI Fund provide that beneficiaries of the manufacturing loan and asset acquisition loan can access a maximum of $10 million respectively.
“Also, beneficiaries of contract finance loan can access $5 million while beneficiaries of the loan re-financing package can access $10 million, with beneficiaries of the community contractor finance scheme limited to N20 million.’’
The minister said that the maximum tenure for all loan types was five years and applicants cannot have two different loans running simultaneously.
He said that at the onset of the fund, the applicable interest rate for the various loan types was pegged at 8 percent, except the community contractor finance scheme, which was five percent.
Sylva said, however, in April 2020, as part of NCDMB’s response to mitigate economic impact of the coronavirus pandemic, the governing council approved reduction of the interest rate from eight to six percent per annum for all four of the loan products.