The Nigerian Content Development and Monitoring Board (NCDMB) and the Bank of Industry (BOI) have modified the conditions for accessing the US$200 million Nigerian Content Intervention Fund (NCI Fund) with a view to making it easily accessible to qualified oil and gas service companies.
The decision was taken by the Board and the bank at a stakeholders meeting held in Lagos recently to address the major challenges applicants face in processing their loan applications.
Rising from the engagement, the NCDMB and BOI agreed that “Bank of Industry may consider the inclusion of Insurance Bonds as collateral for accessing the Fund, provided the bonds are issued by competent and major insurance companies qualified by the Bank.”
It was agreed by the parties also that BOI should accept other forms of collateral outside of Bank Guarantees, which are listed against each loan type and applicants that have unencumbered collateral acceptable to the BOI can access the NCI Fund loan without recourse to Bank Guarantee.
Another resolution of the board and the bank was that an applicant can access loans for two different categories or product types, subject to the applicable single obligor limit under the scheme.
The NCDMB will also consider increasing the single obligor limit for Refinancing from US$2m to between US$5m and US$10m, particularly because many companies that attended the forum have such needs.
The bank and the board agreed further that there would be no discrimination between international oil companies and national oil companies, rather the history and performance of the Nigerian oil companies will be considered by the BOI when taking a decision.
This is even as the BoI committed to standardize the conditions for obtaining Bank Guarantees from each commercial bank and this shall be issued to each applicant at the point of application to guide and speed up their pursuit of the document.
Similarly, as part of efforts to ease access to the NCI Fund, BoI would no longer insist on appointing a Director on the Board of borrowers; but would rather place an officer to monitor the project financed by the loan.
The NCI Fund is a portion of the Nigerian Content Development Fund (NCDF) set aside by the NCDMB for BOI to manage and lend directly to indigenous manufacturers, service providers and other key players in the oil and gas industry.
The types of funding covered under the NCI Fund include loans for Manufacturing, Asset acquisition, Contract Finance, Community contractor finance and Loan re-financing.
Section 104 of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act of 2010 provided that one percent of all contracts, subcontracts, projects and activities in the upstream sector of the Nigerian oil and gas industry is to be deducted and remitted to the NCDF.
