The Nigerian Content Oversight and Development Board (NCDMB) and the Nigerian Import-Export Bank (NEXIM) signed a memorandum of understanding in Abuja on Wednesday to administer a working capital of $ 30 million for oil and gas service companies.
The Fund was designed by the NCDMB to support the operations of local oil companies against the adverse effects of the Covid-19 pandemic, the loss of contracts due to low oil prices and to ensure that companies keep their staff in the use.
This disclosure is contained in a press release issued by the NCDMB on Wednesday, June 23, 2021 and can be viewed on its website.
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The Working Capital Scheme is one of the newly introduced products in the Nigerian Content Intervention Fund (NCI Fund) approved by the NCDMB Board of Directors under the leadership of the Minister of State for Petroleum Resources, Chief Timipre Sylva.
Target beneficiaries include members of the Petroleum Technology Association of Nigeria (PETAN) and the Oil and Gas Trainers Association of Nigeria (OGTAN) who are commercially viable with a business relationship with an international oil company or a major oil company. Nigerian.
What the NCDMB Executive Secretary says about the NCI Fund
The Executive Secretary of NCDMB, Ing. Simbi Kesiye Wabote, explained that the fund’s launch date is July 1, 2021, with NEXIM providing matching funds in the same amount in naira.
He said, “The program would cover loans for working capital support and capacity building, updating invoices and capacity building, including the acquisition of low-end equipment to meet contracts / service obligations to short term.“
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The Executive Secretary also pointed out that the maximum amount that can be borrowed by a single debtor is USD 1,000,000 or its equivalent in naira, while the loan term would be up to 12 months for working capital loans and up to ” at 3 years for capacity building. loans with a moratorium of up to 12 months.
To go further, Wabote added: “The applicable interest rate will be 5% per annum all inclusive for loans denominated in dollars and 8% all inclusive per annum for loans denominated in naira and the rate will be fixed for the duration of the loan. The maximum processing time is 21 working days from the date on which the applicant has provided all the required documents.
âAll fundraising must be done on the web and NEXIM must develop and use a dedicated portal to facilitate the process, with access granted to designated NCDMB staff for follow-up and necessary functions. “
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The boss of NCDMB in his clarification noted that the board fund arrangement with the industry bank would continue.
He said, ”Our intervention with the Bank of Industry is very fruitful. We check the process periodically and we have 98 percent compliance in terms of loan repayment from creditors.“
What the CEO of NEXIM Bank says
Speaking on the occasion, the CEO of NEXIM, Mr. Abubakar Bello, explained that the financial institution is working with NCDMB with the aim of helping local service companies to export their services outside the country. .
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He said: “As the oil and gas industry in other African countries opens up, the capacities that have been built over time in the Nigerian oil and gas sector can be exported to other African countries and even outside the country. ‘Africa.
âWe will support the development of the capacities of local service providers to be able to take them to other oil economies. Since services provide over 15% of Nigeria’s gross domestic product (GDP), we should be able to delve into other climates.“
What you should know
Transactions eligible for financial support under the NCI Fund scheme include those related to petroleum service contracts, projects or contracts that strengthen the operations and viability of eligible service providers and transactions for the provision of petroleum services. low-end assets or other equipment for the execution of a petroleum service contracts with CIOs / large NOCs.