Yemisi Izuora
The Nigerian Content Development and Monitoring Board, NCDMB, has said that the N31 billion ($100 million) Nigerian Content Intervention Fund, NCI Fund would soon be disbursed to enhance indigenous firms participation in the oil sector.
The fund was established to finance manufacturing initiatives in the oil and gas industry.
According to the Nigerian Content Implementation Framework 2017, presented at the stakeholder’s forum in Lagos today by the executive secretary of the NCDMB, Simbi Wabote, the fund would be managed in collaboration with the Bank Of Industry, BoI.
The report said the NCI fund is a partnership between the Board and the BoI to leverage the managed fund experience of the bank in providing access to long term financing for Nigerian oil service providers, (NOSPs) intending to set up facilities for manufacturing goods and services in the oil and gas industry.
The Board had earlier put in place the Nigerian Content Development Fund, NcDF, which was established by section 104 of the Nigerian Oil a And Gas Industry Content Act, 2010 to fund the Implementation of the Nigerian Content development through various Projects, programs and activities to enhance the Nigerian oil and gas industry.
Wabote explained that the NCDF was informed by the need for a special fund that will help develop the local supply chain and build critical capacity in the industry.
The Board consequently developed an operating model to assist its Implementation.
Under the model, the fund was broken into two financing segments, with 70 per cent dedicated to Commercial Intervention such as financing of projects, programs and activities and equity participation by the Board, while 30 per cent was dedicated to Developmental Initiatives such as Capacity Building, starter packs for youths to kick-start projects and programs in the sector as well as administrative costs associated with implementing the scheme.
The model facilitated financing of the Nigerian Content Development Initiatives by indigenous stakeholders by commercial banking institutions with NCDF support in the form of 30 per cent partial guarantee and 50 per cent interest rebate on performing credit facilities.
However, with the introduction and Implementation of the Treasury Single Account, TSA, a review of the model became imperative which now introduced the NCI Fund which further discarded the partial guarantee and interest rebate scheme thus introducing an On-Lending, (Managed Fund) partnership with established development and financial institutions.