NCDMB maps 50m Fund for oil industry manufacturing
Commissions ultra-modern valve assembling plant
Sopuruchi Onwuka
He disclosed that the NOGAPS Manufacturing fund will soon be launched and will be managed by the Bank of Industry (BoI) to address the identified challenges.
The Nigerian Content Development and Monitoring Board (NCDMB) has declared plans for imminent launching of $50 million or N25 billion intervention fund for manufacturers of oil and gas equipment components in Nigeria.
Executive Secretary, Engr Simbi Kesiye Wabote, said the fund would specifically assist producers that would cluster at the Nigeria Oil and Gas Parks (NOGAPs) developed by the agency in Bayelsa and Cross River States for manufacturing of petroleum industry equipment and facility components.
Engr. Wabote who commissioned an ultra-modern valve assembling facility in Port Harcourt, Rivers State, said the $50 million would be drawn from the Nigerian Content Intervention (NCI) Fund to support local capacity building in equipment component manufacturing.
The valve assembly facility commissioned by Engr Wabote is established by Catobi Nigeria Enterprises Limited in Port Harcourt, Rivers State.
He explained that NCDMB secured approval to launch the $50 million fund for NOGAPS Manufacturing Product Line for equipment components used in the oil and gas industry and linkage sectors.
The Oracle Today reports that the Nigerian Oil and Gas Parks (NOGAPs) are expected to be commissioned and operational by the year to create an estimated 2000 jobs each through incubated manufacturing of equipment components utilized in the oil and gas industry.
Ener Wabote stated that “the Governing Council of the Board approved an additional $50 million product in the Nigerian Content Intervention (NCI) Fund to support in-country manufacturing of components within the industrial parks currently being developed by the Board in Bayelsa and Cross River States.”
He stated that the NCDMB rose up to the funding plate as an intervention in the reluctance of banks to extend loans to manufacturers because of the long tenure nature for such facilities.
He explained that 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 endeavor, 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 new fund would be a stand-alone product line with distinct fund allocation and special eligibility criteria and collateral structure.
It is on record that the NCDMB established the NCI Fund in 2018 with the purpose of financing projects driven by companies to increase local 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 the $10 million Manufacturing Finance; $10 million Asset Acquisition Finance; $5.0 million Contract Finance; $10 million Loan Refinance; and N20 million Community Contractor Finance.
The Board also has a $30 million Working Capital Fund for oil and gas service companies and $20 million Fund for Women in Oil and Gas Intervention Fund. Both facilities are administered by the Nigerian Export-Import (NEXIM) Bank under the agreements executed in mid-2021.
Engr stressed that the manufacturing sector remains central to the overall initiative of the federal government and NCDMB to develop the economy and create indigenous capacity in the supply chain.
He underscored the linkage between access to manufacturing finance with the viability of the NOGAPs when operational.
He also stated that the Nigerian Content Equipment Certificate (NCEC) was one of the important tools introduced by the board to encourage local manufacturing, assembly, fabrication, threading, coating, repair, maintenance, calibration, and testing of equipment.
He reiterated that the NCEC has helped drive the establishment and development of facilities and infrastructure for local manufacturing and related activities in collaboration with Original Equipment Manufacturers (OEMs), investors and technical partners.
Engr Wabote made it clear that the NCDMB has relentlessly promoted the development and growth of human capital, especially local skilled manpower, industry and technology experts.
In applauding Catobi Nigeria Enterprises Limited for contributing to the attainment of the board’s 10-year strategic roadmap, Engr Wabote noted that the upgrade of the facility would strengthen the valve assembly operations in-country, as well as groom maintenance and instrumentation services.
He disclosed that the valve assembly plant now possesses the capacity to handle shut-off and control valve testing, test pressure safety bunker operations, valve assembling, and disassembling.
“Catobi Nigeria Enterprise Ltd is a superb example of what a Nigerian oil and gas service company can grow into over a period of time in demonstration of the resilience of the Nigerian enterprise,” Engr Wabote declared.
He called on the other service companies to emulate the company and invest in manufacturing and promote development of services that would benefit the Nigerian economy.
Chairman, Catobi Nigeria Enterprise Ltd, Dr. Okey Ukaegbu expressed appreciation for the support he had received from the industry through the implementation of the Nigerian Oil and Gas Industry Content Development Act 2010. He said the company would be able to serve other sectors of the economy with the new valve assembling plant.
According to Ukaegbu, “the plant is a great opportunity to showcase a Nigeria company’s capacity and we are poised to continue to meet the industry needs and demands with timely delivery and at the right cost.”
The event was attended by some members of NCDMB’s management, representatives of the international oil companies (IOCs), representatives of service companies, PETAN executive, and other oil and gas industry stakeholders.
