NCDMB’s NCIF supports local businesses with N259 bn

• Lays funding model forAfrican energy industry

Sopuruchi Onwuka

The Nigerian Content Intervention Fund (NCIF) of the Nigerian Content Development and Monitoring Board (NCDMB) has delivered commitment of $324 million or N38.4 billion to significant 69 local businesses in the country.

At the current exchange rate of about N800 for a doallar, however, the $324 million amounts to whopping N259.2 billion.

The figure which represents significant part of the $1.0 billion or N800 billion demand from 194 local companies was disclosed as the key performance of the fund which the management of the NCDMB had set aside with the Bank of Industry (BOI) and Nigerian Export Import (NEXIM) Bank to provide affordable funding for critical enterprises in the local economy.

The performance of all stands of the fund formed the key objective of the 2023 second quarter Review Meeting of the Nigerian Content Intervention Fund (NCIFund) hosted in Lagos weekend.

The meeting also became significant for the signing of the amended version of the Memorandum of Understanding (MoU) on the $50 million NOGaPS Manufacturing Fund by NCDMB and BOI. The NOGaPS Manufacturing Fund is one of the several strands of the NCIF.

Modification of the MOU comes as the NCDMB brings some of the NOGaPS projects into commissioning stages.

Executive Secretary, NCDMB, Engr Simbi Kesiye Wabote, underlined the tremendous success of the NCI Fund in catalyzing capacity development and investments in the Nigerian oil and gas industry.

He stated that the NCI Fund now serves as a model for local content practice across the African continent and inspired the creation of the African Energy Bank by the African Petroleum Producers Organization (APPO), in partnership with AFREXIM Bank.

Engr Wabote disclosed that countries like Angola and Namibia have started engaging the NCDMB to copy the NCIF model for replication in their jurisdictions.

“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,” he said.

Engr Wabote commended BOI on efficient management of the NCI Fund, assuring that the NCDMB would deepen partnership with the bank.

 “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 will help them overcome some of the prevailing issues around governance, liquidity and technical optimization,” he declared.

According to NCDMB, the NCI Fund was established in 2018 with to enable companies and investors in the Nigerian petroleum industry grow local capacity for job execution, project delivery and enhanced local content in industry operations.

The NCI Fund has five product lines managed by the Bank of Industry. They include the or N8.0 billion Manufacturing Finance; another $10 (N8.0 billion) Asset Acquisition Finance; the $5.0 million (N4.0 billion) Contract Finance; $10 million (N8.0 billion) Loan Refinance Fund; and ₦20 million Community Contractor Finance Fund.

The $50 million (N40 billion) NOGaPS Fund was launched as a separate product in March 2023 to incentivize companies that will be domiciled and manufacture oil and gas equipment components within the NCDMB oil and gas parks being established at different locations across the country. The NCDMB states that the sites in Bayelsa and Cross River State are already open for occupation.

The Board also has a $30 million (N24 billion) Working Capital Fund for oil and gas service companies and $20 million (N16 billion) Fund for Women in Oil and Gas Intervention Fund.

While the BOI manages the rest of the funds, the last two facilities are administered by the Nexim Nigerian Export-Import Bank and the agreements were signed in mid-2021.

The NCDMB and the BoI weekend signed an amendment to the  MoU on the $50 million NOGaPS Manufacturing Fund, the biggest strand of the NCIF and domiciled with BoI to attract oil and gas equipment manufacturers to the NOGaPS facilities established to enable companies invest in local manufacturing of components used by the industry.

The meeting and associated signing of the amended MoU were part of the 2023 second quarter Review Meeting of the NCIFund.

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 that these quarterly review meetings will impact on sustaining the effective disbursements and recovery of these funds.