The Governing Council of the Nigerian Content Development and Monitoring Board (NCDMB) has approved the expansion of the Nigerian Content Intervention Fund from $200Million to $350Million.
The enlargement of the Fund by $150Million was part of the decisions taken at the recent NCDMB Governing Council meeting, which held virtually on June 16, 2020. The meeting was chaired by Timipre Sylva, the country’s Minister of State for Petroleum Resources and Chairman of the Council.
The Council approved that $100Million from the additional funds would be deployed to boost the five existing loan products of the NCI Fund, which include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing.
The Council also approved that $20Million and $30Million respectively should be deployed to two newly developed loan product types – the Intervention Fund for Women in Oil & Gas and PETAN Products, which include Working Capital loans and Capacity Building loans for PETAN member companies.
PETAN is Petroleum Technology Association of Nigeria, a body of Nigerian owned oil service engineering contracting firms.
The NCI Fund was instituted in 2017 as a $200Million 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. The NCI Fund is 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 $10Million respectively. Beneficiaries of Contract finance Loan can access $5Million while beneficiaries of the Loan Re-financing package can access $10Million, with beneficiaries of the Community Contractor Finance Scheme limited to ₦20Million.
The maximum tenure for all loan types is 5 years and applicants cannot have two different loans running simultaneously.
At the onset of the Fund, the applicable interest rate for the various loan types was pegged at eight (8) percent, except the Community Contractor Finance Scheme, which was five (5) percent.
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 (8) to six (6) percent per annum for all four of the loan products. The Board also extended the moratorium for all loan products.