The council of the Nigeria Content Development and Monitoring Council (NCDMB) approved the expansion of the Nigeria Content Intervention Fund from $ 200 million to $ 350 million.
The $ 150 million increase was part of the decisions made at the recent NCDMB board meeting, held virtually on June 16, 2020. The meeting was chaired by the Minister of State for Petroleum Resources, Chief Timipre Sylva, who is the president.
The board approved that $ 100 million of the additional funds would be earmarked to boost the NCI Fund's five existing loan products, which include manufacturing, asset acquisition, contract financing, loan refinancing and community contractor financing.
Likewise, the board also approved that $ 20 million and $ 30 million, respectively, be distributed for two types of newly developed loan products – the Intervention Fund for Women in Oil and Gas and PETAN Products, which includes loans for working capital and loans for training of PETAN member companies. .
The NCI Fund was established in 2017 as a $ 200 million fund managed by the Bank of Industry (BoI), designed to facilitate the transfer to qualified stakeholders in Nigeria's oil and gas sector on five types of loan products.
The NCI Fund is a part of the Nigeria Content Development Fund (NCDF), aggregated by deducting 1% of the value of contracts executed in the sector upstream of the oil and gas industry. About 94% of NCI funds were disbursed to 27 beneficiaries in May 2020. The NCDMB received new orders from 100 companies for almost three times the size of the original fund.
The guidelines for the NCI Fund state that beneficiaries of the asset acquisition loan and asset acquisition loan can access a maximum of US $ 10 million, respectively. In addition, beneficiaries of the contract financing loan can access $ 5 million, while beneficiaries of the loan refinancing package can access $ 10 million, with beneficiaries of the Community Contractor Financing Scheme limited to N20 million.
The maximum tenure for all types of loans is five years and applicants cannot have two different loans running simultaneously. At the start of the Fund, the interest rate applicable to the various types of loans was set at eight percent, except for the Community Contractor's Financing Scheme, which was five percent.
However, in April 2020, as part of the NCDMB's response to mitigating the economic impact of the coronavirus pandemic, the Governing Council approved reducing the interest rate from eight to six percent per year for all four loan products. . The council also extended the moratorium on all loan products.